About geothermal energy in detail

Earth that will help us ...

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About the utilization of geothermal energy

The purpose of conventional geothermal projects is to utilize the heat exploited from the thermal water reservoirs located in the deeper layers of the Earth via heat exchangers located on the surface. The heat thereby extracted can be utilized as the main supply of heat for existing district heating systems, replacing the natural gas based furnace, in spas or for other direct heating uses (such as among others in greenhouses, for agricultural dryers, for the heating of the ponds in fisheries).

Hungary´s geological characteristics are excellent for the implementation of the above forms of geothermal heat utilization, especially considering that we have significant thermal water reservoirs due to the geological development of the region. Conventional geothermal heat supply projects (such as district heating) are typically provided with thermal water by wells located at depths of approx. 1,000-2,500 m. In our country at these depths thermal water supplies, which can ensure the required quantity and temperature of water supply for the project concerned can be located.

An additional goal can be primarily at the so-called high enthalpy regions to build power plants producing electricity with enhanced efficiency geothermal systems (EGS) and the utilization of the heat produced in a connected or cascade system. In Hungary in addition to the heat utilization of conventional direct water sources, there is hope for the development of such systems due to the so-called hot spots and with the assistance of artificial systems established at the base.

Generally it can be stated that during a geothermal project development it can take 3-5 years to start production from the initial idea. During the study phase lasting from one to three years the business and geological data shall be reviewed, in addition, it is also required to be granted the right to research. At the location selected 2D/3D, MT and additional geological measurements shall be carried out. Thereafter, the drilling of the first well, the testing thereof and the drilling of the second well shall take place. During the field development a lengthy well testing takes place, which specifies the characteristics of the power plant, following which the works pertaining to the surface structures may commence. In this phase it is quintessential to enter into long-term market agreements, in the US it is typical that electricity service providers contract for existing geothermal capacities for the next 20-25 years with a premium of 20-30 % over current market prices.

Production can last at least 35 years but generally longer. In Italy a power plant has been in operation from the early 1900s. It is also important to note that during production the management of business risks and environmental issues cannot be avoided.

A distinctive characteristic of geothermal projects is the high initial capital requirement, since following the research, licensing and feasibility study, the drillings and the establishment of the system take place then. Implementation can only be divided into phases to a limited extent.

The investment return of these high initial cost and risk involving projects generally exceeds 10 years. Due to the high capital and technology demand, these are not highly feasible developments for small and medium sized businesses, and/or funding of some form is required for the implementation of the project.

To prevent the geological risk, the diligent execution of the study program is of high significance but in several countries projects are funded in part at the state level as well. In Germany the state carried out the seismic mapping of the country, thus this information is available for the project owners. In Norway in the case of the offshore hydrocarbon research the state reimburses 70 % of the costs if a drilling is unsuccessful, thereby motivating investors to initiate new projects. If a company accurately diversifies its portfolio, it can reduce its heat and electricity market, political and other risks. By optimizing its maintenance work processes it can concurrently reduce its operation costs as well.

In relation to the utilization of geothermal energy for electricity production, it can also be stated that the countries attempting to achieve sustainability, among them ours cannot afford to not utilize such a renewable energy source, which can be so widely used and is so environmentally friendly, with the most realistic and practical methods.