HomeMy WebLinkAboutGeothermal Cost Matrix Memorandum Dilley&Linnell 04-24-2009
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Scott Hattenburg, PE
Lorie Dilley, PE/CPG
Dennis Linnell, PE
David Lundin, PE
MEMORANDUM
DATE: 4/24/09
TO: Dave Lockard, AEA
FROM: Lorie Dilley, PE/CPG
RE: Geothermal Cost Matrix
This memorandum presents our assumptions in the development of the geothermal cost
matrix that is attached. The geothermal cost matrix (matrix) is based on developing a
project that is capable of supplying electric power to the community that is closes to the
source. In some cases the best use of the geothermal resource maybe for other purposes
such as space heating, greenhouses, or a resort. The matrix is in two parts. The first part
presents the underlying assumptions of temperature and depth to resource. Also on the first
part are the size of the project assumed and the number of wells based on known/assumed
flow rates. Projects were divided into use of the shallow or deep resource. This was the
basic data used in developing the costs which are presented on the second part of the
matrix. The costs were developed using Hanse 2005; DOT&PF bid sheets; and
development costs from previous projects. Production well drilling costs were based on
those provided for recent geothermal well drilling by Geothermal Resource Group, Inc.
The following presents the assumptions made for each data and cost presented in the
matrix:
DATA SHEET
1. Temperature of Shallow Resource
The temperature of the shallow resource is based on temperatures measured at springs in
the vicinity of each project. These temperatures were gathered from the literature primarily
from Kolker 2007 and Geothermal Resources of Alaska Map, DGGS. The only assumed
temperatures were for Mt Spur which was taken to be the same as Akutan.
2. Depth of Shallow Resource
Unless known it was assumed to be zero feet.
3. Temperature of Deep Resource
The temperatures of the deep resources were taken from Kolker 2007 and Geothermal
Resources of Alaska Map, DGGS where known. The following were assumed:
Elim based on Pilgrim and cooler surface waters,
Mt. Spurr, Makushin, Akutan and Port Moller were considered similar geological
provinces and therefore similar temperatures. Temperatures of 200 to 250 C were
considered reasonable for these systems.
Minto and Circle were assumed based on Chena and Manley.
April 24, 2009
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4. Depth of Deep Resource
Depth of deep resource was similar to the temperatures discussed in #3. Depths were
assumed for those where the temperatures were assumed.
5. Capacity of Resource
Where the data was known it was inputted.
6. Distance from Load
Distance from load to the source was measured from maps or taken from Kolker report. The
load was assumed to be the population center. Again the overriding assumption for the
project was for the resource to produce electricity. The load may be closer depending upon
the use of the geothermal resource.
7. Size of Project
The size of the project was based on Kolker 2007 report as well as anticipated production
from the systems and needs of the communities. For the villages, a 1 MW limit was set
even though the necessary power generation may be lower. The overall price may be
reduced due to lower power needs. The 1 MW limit was set due to future considerations
and limits on binary power generation. It should be realize that UTC generators at Chena so
far do not have a 1 MW capacity for a single turbine. The production model is 280 kW and
they are working on large capacities.
8. Road Miles Needed
Base on distance to load and nearest road. For instance Pilgrim was set at 7 miles since
that is the distance to the highway. In some cases roads may exist but not be wide enough
or structurally stable enough to handle the loads from drill rigs and equipment needed for
construction.
9. # of Wells for Shallow/Deep (6 columns)
This set of columns was developed to estimate the number of wells needed for production of
the number of megawatts. Using the formula from Hanse 2005 that MW/well = F/50 – 3.5
the number of wells needed was estimated, where MW is megawatts and F is the resource
temperature in degrees Fahrenheit. The formula only works for temperatures above 175 F.
For those areas with lower temperatures and shallow resource the MW/well was set at 0.1
unless known otherwise from production data. The blanks represent that the size of project
is large and the preferred use of the resource is from the deeper system.
10. Success Rate
The success rate for a well to actually produce varies from 60 to 80 percent. The number of
wells needed was increased for the deeper wells based on a 40 percent failure rate.
COSTS
For the second part where costs were developed the following were the costs used. Many
of the costs were escalated from Hanse 2005 and Augustin 2006.
1. Roads & Access
Roads were assumed to be 24 feet wide, 3 feet thick and the length presented in part 1 to
develop the cubic yards (cyd) of gravel required. A range of price was applied to the cyd’s
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needed. Unit price ranged from about $30/cyd to $250/cyd depending on location and were
based on DOT&PF bid sheets the community or region that the resource is near.
2. Prospecting
Assumed that prospecting is the work – geological, geophysical, geochemical, and land
issues, that would need to occur prior to drilling a well. Since most of the sites have little
information beyond some cursory work that has been conducted I set the amount between
$100,000 and $500,000 for most of the projects. Geophysical work alone could be
$200,000 to $500,000 depending upon the size of the area and technique used. There are
a few that are higher amounts reflecting a more significant resource and/or lack of
knowledge about the resource. This did not include any drilling costs.
3. Exploration Drilling
Augustin 2006 proposed a range of average costs for drilling based on data from oil and well
drilling in 2003. The numbers range from $225,000 for a 1,500 feet deep well to $2 M for a
10,000 feet deep well. These numbers were multiplied by 3 to 4 for the inflation that has
occurred in drilling since 2003. So that a well approximately 1,500 to 2,000 feet deep would
cost about $800,000 and a 10,000 foot deep well would be about $6 to $8 M. Wells drilled
to 2,000 feet for a project in New Mexico in 2007 cost about $300,000 to $500,000 per well
and mob/demob was a major issue. For exploration drilling the costs are cheaper than for
confirmation drilling. Exploration drilling can use a slim hole rig as oppose to a oil well rig. It
was assumed 2 to 5 wells per site to depths mentioned in part 1. The 2 to 5 wells could be
considered part of the additional wells for the success rate in the last column of part 1.
4. Well Testing
Assumed well testing would include some downhole geophysics and flow tests which I
assumed could run between $100,000 to $1 M depending upon the depth and level of
knowledge of the resource. For deeper, higher temperature, less know sites, the well
testing was higher.
5. Drilling Wells
Costs for drilling full-size production wells are generally at least twice that for drilling a
similar depth exploration (slim-hole/temperature gradient) well. Costs come from lower-48
costs provided by Geothermal Resource Group, Inc for various depth wells, and currently
average almost one million dollars per 1000 feet, although variability is high and depends on
geology, location, and other factors. The number of wells was taken as the # of wells
considering the success rate. If the resource has been well characterized by preliminary
work, this success rate may be somewhat higher and the costs for drilling somewhat lower.
There may be some redundancy with the exploration drilling but at this level that redundancy
is unknown. Costs may also vary based on the current uncertainty about the depth and
temperature used to estimate the number of wells. The range given is one to two times the
cost for equivalent wells in the lower 48 states.
6. Site Development
Assumed that approximately 50,000 to 300,000 square foot pad will be needed for sites and
assuming 5 foot section and the cost of gravel the site development costs were prepared.
For some areas that appeared to have some infrastructure already such as Chena and
Circle the number was less than for those areas like Elim which would have to develop the
entire site from the beginning.
April 24, 2009
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7. Physical Plant
Binary Plants can range from about $1,600 to $2,400 per kW in the lower US. UTC System
was about $1,300 per kW and steam plants are about $1,500 per kW. These costs were
based on Hanse 2005, Chena Costs, and DOE costs. The Snake River Power Plant in
Nome (diesel generation) was approximately $30 M for the entire plant and site
development. The factors were increased for remote locations and about 1.5 to 3 Alaskan
factor applied. Recent trends for steel costs were explored to see if further modification of
these costs was warranted. Steel costs are lower now by about a factor of 2 from their peak
in summer 2008. However, since our cost data does not come from this time period, it
appears the current cost of steel will not greatly impact our estimates.
8. Docks/Airports
Makushin and Spurr may need docks and/or airports. Numbers based on construction
experience in Alaska.
9. Gathering System
Gathering systems are the piping for the project. For larger projects and power plants sited
further away from the resource the price would be higher. Topography, well productivity, and
brine status (how reactive the brine) all play into the gathering system costs. Hanse 2005
suggested a $250 to $400 per kW price for gathering systems
10. Transmission Lines
AVEC data suggests low end costs for transmission lines in Alaska to be in the range of
$200,000 per mile. The number of miles needed was taken from the distance to the load or
intertie. The base rate per mile was increased by factors of 1.5 to 2 each for difficult terrain,
remoteness of location and/or distances of less than 10 miles.
11. Support Facilities
An additional $500,000 to $4M was used applied to include the other facilities such as
utilities, landfills, living quarters, shops, shelters, storage, etc that may be needed at a
geothermal site. Some areas that are developed such as Chena, Circle, Manley, Sitka, etc
would not need a lot of support facilities, other areas further away from villages and
population centers would need more.
Phased development of a resource may occur that will allow for some of the capital costs to
be delayed. In other cases such as for the road construction, other agencies may assist
with the development costs. Transmission line costs were not included in the capital cost
and may add substantial costs to a project depending upon the length of the transmission
lines. The costs presented are order of magnitude costs and may be less or more
depending upon the exact nature of the project, the number of wells needed, and the
characteristics of the resource.
REFERENCES
Augustine Chad, JW Tester, B Anderson, S Petty, and B Livesay. (2006) A Comparison of
Geothermal With Oil and Gas Well Drilling Costs. Proceedings of 31st Workshop on
Geothermal Reservoir Engineering, Stanford University, Stanford, California, Jan 30 – Feb
1, 2006.
April 24, 2009
Page 5 of 5
Hanse, Cedric Nathanael. (2005) Factors Affecting Costs of Geothermal Power
Development. Geothermal Energy Association.
Kolker, Amanda (2007). Alaska Geothermal Development: A Plan, Alaska Energy Authority
____________ (1983) Geothermal Resources of Alaska. MP08-SH01, Division of
Geological and Geophysical Surveys, Alaska Department of Natural Resources.
DATA COMPONENTS SHALLOWDEEPProject o fre s o u rc e - T e m p e ra tu re s h a llo w Cresourdepth o f s h a llo w c e
o
re s o u rc e - T e m p e ra tu re f d e e p Cresoudepth o f d e e p
rc e
R flo w
C a p a c ity o f e s o u rc e o r in te rtiD is ta n c e F ro m L o a d o r e (M i)P
S iz e o f ro je c t n e eRoad m ile s d e d
L
o th e rs )T ra n s m is s io n in e (b y FAssum e d T - °F /5MW /w e ll = 0 -3 .5
w e lls # p ro d u c tio n n e e d e d
A s s u m e d T - F
°F /5MW /w e ll = 0 -3 .5
w e lls # p ro d u c tio n n e e d e d
4 0 % s u c c e s s rPilgrim90160150 5000450 lpm6052601940.4133022.542a 4Elim41010050002182105.8 2120.7424Manley6001302500375+gpm01001400.1102661.8213Chena7175014525000/335033 2932.3624Copper River/Klawasi2001506500201052068 3022.5446Susitna Basin?123350021022 253.41.56879Mt. Spur2502000351001335 4826.141623Naknek2001000022522 3924.3468Makushin196200025020007-12 MW/well1030512 4857*57Akutan99025025005555210.20.774826.1413Sitka/Goddard50014050001451414 2842.1835Bell Island720135500030gpm3533 275235Minto6201452500480 lpm1511515143.60.1102932.3613Circle58014525001540 lpm0100136.40.1102932.3613Adak66019070001051010 3743.9824Port Moller7102005000300 lpm1011010159.80.1103924.3413Shallow temperatures are from literature measured at springs. Deep temperatures from geothermometry or estimated based on same geological provence.Size of project is set at 1 MW if village has less than that in operating capacity.Number of shallow wells needed based on estimate - formula only works for temperatures above 175 F. Assumed 0.1 MW per well.*from low end of Makushin well flow tests.
Costs in $Millions
Exploration & Confirmation Production and Transmission
Project Roads & AccessPr
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Cost
sPilgrim - Shallow 0.8 - 1.4 0
0 0.6 4 - 8 1 - 3 15 - 20
1 - 2 15 0.5 - 1.5 38 - 52
Pilgrim - Deep 0.8 - 1.4 0.6 1.5 - 3 0.2 18 -36 1 - 3 23 -30 1 - 2 15 0.5 - 1.5 62 - 93
Elim - deep 3 - 6 0.1 -0.5 2 -8 0.1 - 0.5 18 - 36 2 - 5 2 - 4 1 - 2.5 2 - 4 0.5 -1.5 31 - 68
Manley - Shallow 0.1 -0.5 1 - 3 0.1 - 0.5 3 - 7 1 -3 2 - 4 0.5 - 1 0.5 -1 8 - 20
Manley - Deep 0.1 -0.5 1 - 4 0.1 - 0.5 6 -12 1-3 2 - 4 0.5 - 1 0.5 - 1 11 - 26
Chena 0.1 - 0.7 1 - 4 0.1 - 0.5 8 - 16 0.2 - 0.5 23 -30 1 - 2 6 - 10 0.5 -1 40 -65
Copper River/Klawasi 1 - 3 0.7 -1.5 4 - 10 0.1 -0.7 36 - 72 2 - 5 30 -50 2.5 -4 4 - 6 0.5 - 1.5 81 - 154
Susitna Basin?0.8 - 1.1 0.7 - 1.5 4 - 12 0.1 -0.7 38 - 76 0.5 - 4 30 -50 2.5 -4 0.5 -1.5 0.5 - 1.5 78- 152
Mt. Spur 8 - 100 0.5 - 1 5 - 15 0.1 - 1 35 - 70 1 - 6 100 -150 15 - 40 25 - 40 14 - 28 1 - 4 204 - 455
Naknek 2 - 5 0.5 - 1 4 -20 0.5 - 2 72 - 144 0.5 - 4 40 -60 6 -10 0.4 - 1 1 - 3 127 - 178
Makushin 18 - 35?0.5 - 1 2 - 7 0.1 - 1 11 - 22 0.5 -4 30 - 50 25 - 100 7.5 - 12 4 - 8 1 -4 100 - 244
Akutan - Shallow 18 - 35?0.3 -0.7 1.5 - 3.5 0.1- 0.5 3 - 6 1 - 3 12 -17 1 - 2 2 - 4 0.5 -1 39 - 73
Akutan - Deep 18 - 35?0.3 -0.7 1 - 4 0.1- 0.5 6 - 12 1 - 3 7 - 12 1 - 2 2 - 4 0.5 -1 37 - 74
Sitka/Goddard 8 - 10 0.3 -0.7 2 - 7 0.1 -1 23 - 46 1 - 3 *15 - 25 1 - 2 3 - 6 0.5 -1 54 - 102
Bell Island 2 - 5 0.1 -0.5 2 - 7 0.1 -1 23 - 46 1 - 3 *15 -25 1 - 2 1 - 3 0.5 -1 46 - 94
Minto - Shallow 6 - 8 0.1 -0.5 1 - 3 0.1 - 0.5 3 - 7 1 -3 2 - 4 0.5 - 1 3 - 6 0.5 -1 17 - 34
Minto - Deep 6 - 8 0.1 -0.5 1 - 4 0.1 - 0.5 6 - 12 1-3 2 - 4 0.5 - 1 3 - 6 0.5 -1 20 - 40
Circle - Shallow 0.1 -0.5 1 - 3 0.1 - 0.5 3 - 7 0.2 - 0.5 2 - 4 0.5 - 1 0.5 -1 7 - 18
Circle - Deep 0.1 -0.5 1 - 4 0.1 - 0.5 6 - 12 0.2 - 0.5 2 - 4 0.5 - 1 0.5 -1 10 - 24
Adak 30 - 40?0.5 - 1 2 - 7 0.1 -1 25 - 50 1 - 3 23 - 30 1 - 2 4 - 8 0.5 -1 87 - 143
Port Moller - Shallow 30 - 40?0.1 -0.5 3 - 6 0.1 - 0.5 4 - 8 1 - 3 2 - 4 0.5 - 1 4 - 8 0.5 -1 45 - 72
Port Moller - Deep 30 - 40?0.1 -0.5 2 - 8 0.1 - 0.5 13 - 26 1 - 3 2 - 4 0.5 - 1 4 - 8 0.5 -1 53 - 92
UTC Power Plant assumes that 1 MW is available
Flash Power Plant
Binary Power Plant *23 - 50 May not be hot enough for Binary System
?: Costs assumed based on Adak gravel prices