Optimal Management of Geothermal Heat Extraction

Abstract:

Geothermal energy technologies use the constant heat flux from the subsurface in order to produce heat or electricity for societal use. As such, a geothermal energy system is not inherently variable, like systems based on wind and solar resources, and an operator can conceivably control the rate at which heat is extracted and used directly, or converted into a commodity that is used. Although geothermal heat is a renewable resource, this heat can be depleted over time if the rate of heat extraction exceeds the natural rate of renewal (Rybach, 2003). For heat extraction used for commodities that are sold on the market, sustainability entails balancing the rate at which the reservoir renews with the rate at which heat is extracted and converted into profit, on a net present value basis.

We present a model that couples natural resource economic approaches for managing renewable resources with simulations of geothermal reservoir performance in order to develop an optimal heat mining strategy that balances economic gain with the performance and renewability of the reservoir. Similar optimal control approaches have been extensively studied for renewable natural resource management of fisheries and forests (Bonfil, 2005; Gordon, 1954; Weitzman, 2003). Those models determine an optimal path of extraction of fish or timber, by balancing the regeneration of stocks of fish or timber that are not harvested with the profit from the sale of the fish or timber that is harvested. Our model balances the regeneration of reservoir temperature with the net proceeds from extracting heat and converting it to electricity that is sold to consumers. We used the Non-isothermal Unconfined-confined Flow and Transport (NUFT) model (Hao, Sun, & Nitao, 2011) to simulate the performance of a sedimentary geothermal reservoir under a variety of geologic and operational situations. The results of NUFT are incorporated into the natural resource economics model to determine production strategies that maximize net present value given the performance of the geothermal resource.