Geothermal energy is clean energy. It has the potential to satisfy the energy requirements of a few countries. It doesn’t emit greenhouse gases.
It is freely available in nature because it is the heat that is found inside the Earth. This heat is produced for a longer duration, and unlike non-renewable resources, it doesn’t start diminishing very easily/quickly.
But, the harnessing of geothermal energy has a cost. A widespread method of extracting and generating geothermal energy is through geothermal power plants.
The other way to use it is through the use of underground pipes. This process is primarily used in households. The cost of investment in this scenario includes the cost of the pump, the cost of the equipment used, and the cost of drilling.
The cost of developing and building a geothermal power plant is usually very high. Installing a geothermal pump in your house can range somewhere from $10,000 to $30,000.
But don’t you worry, because now the federal government helps you by offering geothermal energy tax credits.
Today, in this article, we will briefly explain this in brief and let you know more about all the facts and figures revolving around geothermal energy.
What Are the Factors Affecting The Cost of Geothermal Energy?
The factors affecting the cost of geothermal energy are divided into three parts:
• The economy of scale: Economy of scale allows unit capital cost. It is usually in U.S. dollars, and unit O&M costs reduce as installed capacity increases.
As per the data put forth by Entingh and McVeigh in 2003, the unit capital cost is suspected of changing as per the project criteria and the project size. It can go from $1600 per kW to $2500/kW.
• Well productivity: The well productivity features have an adverse effect on the geothermal cost in these ways:
- If the well is more productive, fewer wells are required to supply, decreasing the overall power cost.
- With time, a high decline in the well productivity will require more drillings and hence increase the power cost.
• Development and operational factors: There are a few factors related to development and operation that highly impact the power cost too. The developer of a project has the permit to see the size of the power plant.
In contrast, the project operator can either decrease the generation bypassing the time, or generate more they can drill more and can also run the plant more than its life mentioned. And these are the two factors that can highly impact the geothermal power cost.
The other factors that can affect the cost are the site location, site development and construction for power plants, hiring of skilled workers, the price that the environment has to bear, cost of operation, cost of maintenance, and transferring these workers to the site location.
If you’re a residential person, the only costs you will bear are labor and fitting of pipes in the underground. But, not to forget that, these costs can be recovered very soon in a time span of a few years.
Cost Comparison of Geothermal Energy With Other Sources of Energy
Experts have claimed that geothermal energy is more efficient and cost-effective than fossil fuels. As the energy is extracted right beside the power plant, it saves a significant deal on the processing and other miscellaneous costs compared to different fuel variants. It also can decrease our foreign oil dependence.
Te Puia geyser in Rotorua, New Zealand
Fact: Geothermal plants are known to be highly reliable and efficient than coal and other nuclear plants. This is because they run continuously for 24 hours and 365 days a year.
The geothermal energy/electricity generated through steam or other hot water reservoirs is the cheapest of all the renewable sources of electricity.
But, with the passing years, geothermal energy may be most likely be restricted or limited to a few regions worldwide (only to those areas that have favorable reservoirs). And this excludes most parts of the continental land of the planet Earth.
This would happen in the current years due to the lack of technology for running artificial geothermal energy reservoirs in regions where there are no natural reservoirs.
Meanwhile, technologies are readily available for the generation of wind and solar electricity. This generation of solar and wind electricity can be a serious competition for geothermal energy.
Hence, now is the time to proactively fund the development of geothermal technology at a larger scale than earlier. This needs to be done to make geothermal energy or electricity readily available everywhere.
Is Geothermal Energy Expensive?
Not to sugarcoat, but the installation of a geothermal system will cost you a lot. It is pretty expensive. It will cost you somewhere around $10,000 to $30,000 to install this system. The installation cost depends on the plot size, soil condition, site accessibility, the drilling required, and the system configuration.
The starting value of generating geothermal energy is high. Wells usually cost around $1 to $4 to dig. But, having a geothermal energy pump at home can reduce the energy bills almost by 30 %. It will also pay for itself within the next five to ten years.
Fitting a geothermal power plant for a two thousand square feet home usually costs $20,000. Fitting it in a new building usually costs less. The geothermal system usually costs 40 % more than an HVAC system.
If you are thinking of recouping this cost from energy savings, it can take you four years to even fifteen years as per the cost of fitting and utility rates.
Across the globe, people utilize around 7,000 megawatts of geothermal energy. Out of 7000 megawatts, 2700 megawatts are generated in the U.S. Advanced techniques are being developed, opening the doors for deep digging and making geothermal energy available to many more people and places.
For now, a geothermal system is the most viable option of all. People from anywhere and everywhere across the globe can use it as the temperature near the Earth’s surface remains the same, always.
How Can Geothermal Energy be Used in Homes?
Few recent studies show that geothermal energy is cheaper than various other sources of energy. And hence, people have started using it for household activities. Most households use it for heating and cooling purposes only.
These power plants pump boiling water right from the Earth’s surface and can be utilized to operate turbines or can be used to heat a volatile liquid like isobutene. And this isobutene then turns the turbine.
Houses can have both solar systems to get the supply of heat and energy while also having a geothermal heating system.
Geothermal Energy Vs. The Coal Price
When you bring together direct subsidies and R&D for geothermal energy, geothermal energy becomes one of the bright options. The most recent reports show that geothermal energy cost is 3.6 cents per kWh, whereas coal is 5.5 cents per kWh.
The geological survey center of the U.S. shows that almost 70 % of geothermal resources in the United States are hidden. One cannot find it right on the Earth’s surface, and the U.S. doesn’t have the advanced technology to opt for blind drilling options.
In geophysical science, geothermal technology has not advanced yet as much as the oil industry was in the early 1920s. And hence, people prefer to choose coal over geothermal energy.
The coal power plant allows the option to spread the construction for a longer time than geothermal plants. Geothermal plants are known to last less than half of a coal-fired power plant.
How Much Does Geothermal Energy Cost Per Kilowatt-hour (kWh)
Binary power plants are the most used geothermal power plant in use today. The fluid that is in use in the binary plant is isobutene or isopentane. This power plant is in a closed-loop.
The geothermal fluid passes through the well; it heats the liquid and goes down the well. And hence there is no such emission done by the power plant into the atmosphere.
Currently, the U.S. Department is working towards achieving less cost of power production per kilowatt-hour. 15,000 MW of production is estimated by the next decade.
As per the other renewable energy resources, the geothermal plants cost more for the construction and maintenance of the plant instead of operations of the power plant. The investment in the plant is in three phases:
- Exploring and drilling
- Constructing power plants
- Discounting further re-drilling cost.
The capital cost related to the geothermal power plant is around $2500 per kWh.
To offset the cost of developing the geothermal power plant, financing options like tax incentives are often used. These incentives include sales tax incentives, property tax incentives as well as tax credits.
These incentives motivate to development of geothermal electricity. These can be used for small and large projects as they depend on a particular total cost percentage or the value of the equipment used.
Loans are a standard financing method used for financing geothermal projects. The loan programs are usually used for the particular technology. But, it is observed that direct loans are more apt for heating and cooling projects of geothermal energy.
Geothermal power plants are highly capital-intensive. But, they are very cheap to run. The cost of planting ranges to 0.03 dollars per kWh and operates at 90% capacity. But above 90%, the maintenance cost decreases slowly.
Is It Possible to Deplete Geothermal Reservoirs?
In early 1913, 1958, and 1960, the sustainability factor of geothermal energy was demonstrated. This experiment was carried out in the Lardarello, Wairakei, and The Geysers field in Italy, New Zealand, and California City.
At a few plants, a decline in pressure and production was noticed. Operators were reinjecting water to keep a favorable reservoir pressure. And it was proved in this particular experiment that geothermal reservoirs have prolonged life and will not deplete any sooner.
What’s The Cost To Develop a Geothermal Power Plant?
The cost of developing or installing a geothermal plant heavily depends upon the expenses of installing it rather than the fuel needed to run it. The process starts with drilling the well and the construction of a pipeline.
It is then followed by an analysis of drilling information. The next step is the design of the plant. The construction of the power plant is completed with the final field development process.
The installation cost of the power plant ranges to $2500 per kW installed in the United States. It would go up to $3000 to $5000 per kW for a 1 MWe power plant—the cost of maintenance and operating range to $0.03 per kWh. Many geothermal plants can produce up to 90% power most of the time. But if you try to run it at 87%, that would definitely increase the maintenance cost.
High-priced electricity most of the time justifies running the plant at 98%, as the higher maintenance cost is recovered eventually.
All in all, it can be said that geothermal energy is pretty expensive, but with the advancement in technology, the price can also go down in the future. If you’re setting up a power plant in a land of more than 2000 square feet area, then it will obviously cost you a lot.
But, if you’re looking to install a power plant (geothermal) in your residential house, then it won’t cost you more than $2500 in the United States. Geothermal power plants are found in the U.S. in seven to eight states. More than half of the United States is moving towards adapting geothermal power for electricity, heating, and cooling purposes.
The high price of the geothermal power plant installation is recovered in a very few years in the future. Hence, we would say that it might be expensive to install a geothermal power plant, but with time you will recover more than the worth of the money paid in installation.
It’s great to see that more and more civilians are moving towards adopting renewable sources of energy. It will have a highly positive impact on the Earth and your life in the coming years. We are proud that you are now a part of Livelywatt’s green family. Go ahead and encourage more people to be a part of this bandwagon. Let’s build a green Earth together.