EG and G Idaho is performing geothermal market penetration analyses, and investigating infrastructure requirements. This paper provides a brief summary of some of the analyses being conducted to serve as a guide in the preparation of comprehensive plans for the accelerated commercialization of geothermal energy

Hanny, J.A.

Lunis, B.C.

UNT Digital Library

,I L *. *" DIRECT APPLICATIONS OF GEOTHERMAL ENERGY MARKET PENETRATION ANALYSES AND INFRASTRUCTURE REQUIREMENTS Ben C .  Lunis and Joseph A.  Hanny EG&G Idaho, Inc. Idaho Falls,  Idaho 83401 ABSTRACT EG&G Idaho, under contract w i t h  the Idaho Opera- tions Office of the Department of Energy, i s  performing geothermal market penetration analyses, and investigating infrastructure requirements. This paper provides a brief sumary of some of the analyses being conducted to  serve as a guide in the preparation of comprehensive plans for  the accelerated commercialization of geothermal energy. INTRODUCTION Market penetration analyses have been performed for  ten states:  Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, the Dakotas, Utah, and Wyoming. The s ize  of current and potential future markets for  these s ta tes  has been assessed for d i rec t  heat applications using a basis of colocation of geo- thermal resources w i t h  potential users. minimal in these s ta tes .  A very large increase in ac t iv i ty  i s  needed, along w i t h  improvements in exploration and conf i rmati on techno1 ogies. Financial incentives ; simp1 i f ied  leasing, s i t ing ,  permitting, and licensing practices; development of appropriate codes and standards; and promo- tional ac t iv i t i e s  are a l l  needed for  the early comnercialization of geothermal energy. cialization of geothermal energy i s  j u s t  beginning t o  emerge. Certain assumptions were made, and a preliminary e f fo r t  i s  underway to describe the scope of the infrastructure, i n  dollars and man- power, needed through the year 1987 for the early commercialization of t h i s  energy source on a national basis. Exploration and development ac t iv i t i e s  are The infrastructure to e f fec t  early comner- AREA DIRECT HEAT APPLICATIONS Each of the ten s ta tes  have been analyzed for potential uses of geothermal energy for  d i rec t  applications. Resource areas (identified by the U.S. Geological SurveyC11, and through work per- formed by the Ear th  Science Laboratory of the University of Utah) have been evaluated for  poten- NOTICE ma report was prepared as an account of work sponsored by the United Stater Government. Neither the United Stater nor the United States Department of Enera., nor m y  of Ihelr employees, nor any of their contractors, subcontractors, or theu employees, makes any warranty, express or imphed, or assumes any legal liability or responsibility for the accuracy. completeness or usefulness of any mfarmatlon, apparatus, product or procen discloud, or represents that Its upc would not infringe privately owned nghls. t i a l  matching w i t h  users. Industrial processes, that  could use geothermal energy i n  the temperature ranges possibly available i n  the area, have been identified from l i s t ings  in s t a t e  manufacturing directories,  and energy use projections, us ing  data developed by the Intertechnology Corporation[21 in 1977, were made. Some of the best matched in- dustries considered are dehydrated and frozen fruits and vegetables, concrete blocks, poultry dressing, meat packing, prepared foods, plastic materials, and the dairy industry. The most promising counties in the ten s ta tes  (191 o u t  of 399) have been evaluated for  residential ,  commer- c i a l ,  and industrial energy use and resource colocation. Starting w i t h  th i s  basic information, market growth and capture assumptions were made to estimate potential geothermal use. These assump- t ions  are l i s ted  below: 0 0 0 0 0 0 0 0 0 0 Apply national industrial growth rates by Standard Industrial Classification Codes. Assume 3% annual increase per capita con- sump t i on. Assume 5% annual new industry spin off for 1985 and beyond. Assume 4% per year regional population growth.  Apply factors for  potential new resource discoveries by the year 2020 and beyond. Apply factors for  new industries relocating t o  the region. ' Assume a r e t ro f i t  of the baseline market of 1% per year for  1980 and beyond, t o  a 25% maximum. Assume a lineal increase in the percent capture of the new growth market from 1980 to 1985. Assume 80% of new industrial growth will be captured i n  1985 and beyond. Assume 40% o f  relocated industry will be captured in 1990 and beyond. r DISCLAIMER  This report was prepared as an account of work sponsored by an agency of the United States Government.  Neither the United States Government nor any agency Thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights.  Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof.  The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof. DISCLAIMER  Portions of this document may be illegible in electronic image products.  Images are produced from the best available original document.  O Assume 75% of new r e s i d e n t i a l  and commercial growth w i l l  be captured i n  1985 and beyond. These analyses of present and fu ture markets present an a t t r a c t i v e  p r o f i l e .  f indingsC31 of t h i s  e f f o r t  are l i s t e d  below. O A l l  ten s tates have p o t e n t i a l l y  economical The summary o f  the geothermal resources w i t h  temperatures su i ted  t o  many process app l i ca t i ons  and t o  space condi t ion ing.  O Most i n d u s t r i a l  and populat ion concentrat ions are co l  ocated w i t h  geothermal resources. O The geothermal water q u a l i t y  i s  o f t e n  pota- b le ,  b u t  a wide range o f  scale and corros ion problems may be encountered. The major d i r e c t  heat markets are c u r r e n t l y  r e s i d e n t i a l  and commercial space condi t ion-  ing, and i n d u s t r i a l  process heat appl ica- t i ons .  The i n d u s t r i a l  market sector  has the greater  p o t e n t i a l  f o r  near term penetrat ion. O O The current  hydrothermal market p o t e n t i a l  f o r  d i r e c t  appl icat ions w i t h i n  these s tates i s  about 0.4 quads. The market p o t e n t i a l  and the poss ib le  capture of t h a t  market f o r  d i r e c t  heat use i s  shown i n  Figure 1.. Current technologies are adequate f o r  i n i -  t i a t i n g  commercial use of geothermal energy i n  the area, b u t  new technologies are needed fo r  f u l l  market penetrat ions. A rese rvo i r  conf i rmat ion program i s  required. Transportat ion 'costs may be a s i g n f i c a n t  economic fac to r .  A major b a r r i e r  t o  the d i r e c t  heat market penetrat ion i s  the lack o f  an i n f r a s t r u c t u r e  t o  develop geothermal energy appl icat ions.  A discussion on t h i s  fo l lows.  O ' ' Residentlallcommercial geothermal use Industrial geothermal use sportation and energy I potential hydrothermal use ustriallresidentiallcommerclal) conversion losses Year INEL A.12 952 Figure 1. Energy consumption and p ro jec t i ons  f o r  the Rocky Mountain ten s t a t e  areaC4]. A . . .  . NATIONAL INFRASTRUCTURE REQUIREMENTS Comnercial izat ion o f  geothermal energy requi res the development o f  an extensive new indus t r y  cons is t i ng  o f  an i n f r a s t r u c t u r e  o f  devel- opers, f i nanc ie rs ,  designers, bu i lders,  and oper- a tors .  An analys is  has been made o f  the c a p i t a l  and manpower needed through 1987, t o  place 5000 MW of d i r e c t  appl icat ions development on l i ne .  The number and sizes o f  p ro jec ts  have been estimated, success r a t i o s  assumed, p r o j e c t  types i d e n t i f i e d ,  and average development costs assigned t o  obta in  an overview o f  cost  and manpower needs. i s  a b r i e f  discussion o f  t h i s  a c t i v i t y .  Average costs per  kW and development times were assumed f o r  three generic systems: heating, i n d u s t r i a l  parks, and s i n g l e  indust ry ,  and are shown i n  Table I. Following d i s t r i c t  TABLE I ASSUMED PROJECT COST AND TIME VALUES I tern Average Average Development Time (years) Resource Development 1 t o  2 D i s t r i c t  Heating 3Cal 700 I n d u s t r i a l  Parks ,Gal 500 3[a l  300 Single Indus t r y  > 25 MWt  2Cal 300 Single Indus t r y  5 t o  25 M W t  [a] A f t e r  the f i r s t  w e l l  i s  proven. The systems are s ized from 100 M W t  t o  5 M W t  o r  less. Depending on the t ime requi red f o r  resource development, design, and construction, these were evaluated t o  determine the year i n  which they are most l i k e l y  t o  be operational. Average costs f o r  each system have been applied, and labo r  and ma te r ia l  costs were apportioned. S t a r t i n g  i n  1980, i t  i s  expected t h a t  expenditures i n  the order o f  $85 m i l l i o n  w i l l  grow t o  $775 m i l l i o n  i n  1987 and continue t o  increase the rea f te r .  Converting these amounts t o  equiva lent  manpower needs shows t h a t  design, const ruct ion,  admin is t ra t ion,  and other  support personnel w i l l  grow i n  number t o  equal over 11,120 man-years i n  1987, as shown i n  F igure 2. These evaluations considered only  the cost o f  the geothermal systems needed t o  operate p lants .  To ob ta in  an i n d i c a t i o n  o f  the nat ional  expenditure t h a t  w i l l  be requ i red  f o r  geothermal systems, p lus  the p lan ts  i n  which the systems operate, an average value o f  $2,000 per kW can be applied. On t h i s  basis, i t  i s  expected t h a t  i ndus t r y  w i l l  have invested over $20 b i l l i o n  through the year 1987. 70 000 plus plant costs- manpower plus plant costs - 60 000 120 000 /- -+, -- - - 80 a i  a2 83 a4 a5 a6 a7 1NEL.A-12 953 Fiscal year Figure 2 .  Projected nat ional  expenditures and manpower needs through FY 1987 f o r  f a c i  1 i ty development. ACKNOWLEDGMENTS We thank EG&G Idaho, Inc., and the Ear th Science Laboratory of the Un ive rs i t y  o f  Utah personnel f o r  t h e i r  assistance and cooperation REFERENCES Uni ted States Department of the I n t e r i o r ,  Geological Survey, Assessment o f  Geothermal Resources o f  the Uni ted States - 1978, Geological Survey C i r c u l a r  790 (and 726). EG&G Idaho and Un ive rs i t y  of Utah Research I n s t i t u t e  Ear th Science Laboratory, D r a f t  Department o f  Energy, D i v i s i o n  o f  Geothermal Energy and the Idaho Operations O f f i ce ;  EG&G Idaho, and the Un ive rs i t y  of Utah Research I n s t i t u t e  Earth Science Laboratory, Regional Hydrothermal Commercialization Plan, I J u l y  14, 1978). 

Direct applications of geothermal energy market penetration analyses and infrastructure requirements

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Direct applications of geothermal energy market penetration analyses and infrastructure requirements

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