Techno Economic Assessment
Content
Centre for Energy Technology
Ricoh Clean Energy Scholarship
Techno-economic assessment of novel engineering systems for stranded geothermal energy resources.
Ashok A. Kaniyal Prof. Graham ‘Gus’ J. Nathan Prof. Jonathan J. Pincus
Delivering innovative technologies for a clean energy future
School of Mechanical Engineering
Life Impact | The University of Adelaide
Centre for Energy Technology
Australia’s Energy Network
Electricity transmission network
Geothermal resources in Cooper Basin
Geothermal resources in Cooper Basin
Slide 1
Oil and Natural Gas Pipeline Life Impact | The University of Adelaide network (Geoscience Australia, 2009)
Centre for Energy Technology
The Geothermal-Data Centre Concept
• Geothermal data fibre link – Capital: $60 m + $15 m (Op ex).
National Broadband Network (NBN)
(NBN Co., 2010)
Geothermal-data fibre link Proposed NBN Co Fibre optic links Fibre optic node
Geothermal-data fibre link ~ $60m
DBCDE, 2010.
Slide 2
Life Impact | The University of Adelaide
Centre for Energy Technology
Presentation outline • Gap in literature; • Techno-economic analysis framework;
• Analysis of Geothermal-data centre concept – early results;
• Future work; • Conclusions.
Slide 3
Life Impact | The University of Adelaide
Centre for Energy Technology
Gap in literature
• Economic assessment of geothermal direct heat and EGS CHP applications. • Address limitations of other novel geothermal engineering systems,
– Dickinson et al. (2010) and Atrens et al. (2009).
• Geothermal-data centre ‘micro-grid’ follows complementary network infrastructure investment.
– c.f. Siddiqui and Maribu (2009), Fleten (2007).
• Application of dynamic capital investment decision methods,
– Not considered in this context.
Slide 4
Life Impact | The University of Adelaide
Centre for Energy Technology
Aims
• Technical feasibility of direct heat and CHP enhanced geothermal system applications, • Economic viability of fibre optic network and geothermal plant under data centre client servicing scenarios: – Net present value - Deterministic static analysis, – NPV approach + dynamic demand and geothermal plant cost uncertainty.
• Social welfare analysis – a case for public involvement in project.
• Application of techno-economic framework to other eng systems.
Slide 5 Life Impact | The University of Adelaide
Centre for Energy Technology
Framework for techno-economic analysis
1. Develop a concept for an engineering system.
Increasing detail 2. Steady state thermodynamic analysis of plant concept. 3. Static NPV analysis of investment. 4. Dynamic analysis of investment in geothermal and network resource faculties. 5. Social benefit analysis of investment in plant and network resource.
Slide 6
Life Impact | The University of Adelaide
Centre for Energy Technology
Standardised data centre unit
• Modular data centre of total capacity 350 kWe (Barroso, 2007):
– IT load = 270 kWe – Cooling load = 200 kWr
Cooling load ~200 kWr
Data Centre Co.
hv Geothermal-data fibre link (1000-1500 km)
NBN market
IT electrical load ~270 kWe
Slide 7
Life Impact | The University of Adelaide
Centre for Energy Technology
EGS CHP – Organic Rankine cycle steady state analysis
Injection well Production well Temperature [K]
Geo-fluid: water
6
Geothermal water: Tin = 508 K, TH = 490 K, ΔT = 5 K, = 50 kg/s.
Radial turbine
490 320 5 5s
6
1 2
Pre-heater
Evaporator
1
4
3 2s
Geo-fluid
5
Generator Wnet = 1.2 MWe
Feed pump
4 3
Entropy (s) [kJ/kg-K]
Absorption refrigeration cycle (not shown) 2 NH3-H20
Ext. heat exchanger Absorption cycle: generator
Φ ≈ 68% (Tc = 562 K, Tin = 375 K, TH = 320 K)
DiPippo (2005) Heberle and Bruggemann (2010) Liu , Chien and Wang (2004)
Refrigeration load
Slide 8
Life Impact | The University of Adelaide
Centre for Energy Technology
Energy consumption pattern
Natural gas electricity generation ≈ 2.55 MWe
Organic Rankine Cycle 1.2 MWe
Geothermal Local CHP Direct heat cooling Absorption chiller cooling 14x Modular data centres
Total IT electrical Load 3.75 MWe
hv
NBN market
Geothermal-data fibre link (1500 km)
3.6 MWth (input) > 2.8MWr (average required output) Absorption chiller plant: COP = 1.0
Broad X Absorption Chiller Design Manual (2008)
Slide 9 Life Impact | The University of Adelaide
Centre for Energy Technology
EGS wells and ORC plant costing
Cost component First injection + production well pair ORC plant
+ natural gas storage tank + construction + contingency.
A$ M $30.5 M $3.82 M
Additional production wells
Ulrich (1984) Vasudevan and Agrawal (2000)
$10.2 M
Slide 10
Life Impact | The University of Adelaide
Centre for Energy Technology
ORC plant economies of scale
$18
Cost of plant and installation (A$ M)
Grass roots capital (Full Plant) ($AUD) Plant size incrementation cost comparison (4 plant units)
$16 $14 $12 $10 $8
4 x 1 plant unit (PU) $15.87 m 3 PU + 1 PU = $12.51m 2 PU x 2 = $11.69m 4 PU $10.93 m
$6
$4 $2 $0 1 2 3 4 5
Geothermal ORC plant units (corresp. no. of production wells)
Slide 11
Life Impact | The University of Adelaide
Centre for Energy Technology
Local CHP – Net Present Value scenarios
NPV scenario iteration Mk 1 Description
- Increasing rate of data centre commitment,
- Early investment = no construction lag.
Mk 2
- Increasing rate of data centre commitment, - Economies of scale investment in plant.
Rt = Annual revenue received per data centre, Ct = Capital and ongoing operating expenditure. i = Cost of capital = 6%
Slide 12
Life Impact | The University of Adelaide
Centre for Energy Technology
Local CHP – Net Present Value scenarios
0 $1 2 3 4 5 15% 10% 5% 0% -5% -10%
NPV and Total expenditure (A$ M)
-$20 -$40 -$60 -$80 -$100
-$120
-$140 -$160
-15%
-20%
Number of capacity increments (production wells + ORC plant) 1 Total expenditure Mk 2
Total expenditure Mk 2 3
-25%
Slide 13
NPV/Total expenditure Mk 1 2
Life Impact | The University NPV/Total expenditure Mk 2 3 of Adelaide
NPV/Total expenditure
Centre for Energy Technology
Fibre optic network investment
Cumulative NPV of investment in Geothermal-Data Fibre link
$100
Cumulative net present value (A$ M)
28% subscription
$80 $60
40% subscription 50% subscription 60% subscription Barroso (2007)
$40
$20 $0 -$20 -$40 -$60
Years
5 10 15 20 25 30 35 40 45
-$80 Slide 14
Life Impact | The University of Adelaide
Centre for Energy Technology
Dynamic investment decision
• Real options approach. • An optimal path for capacity investments given uncertain:
– Data centre demand for remote co-location and competition b/w sites,
• Method: Aguerrevere (2003);
– Influence of learning on cost of establishing geothermal wells and plant,
• Method: Bolton and Faure-Grimaud (2009).
• Social welfare analysis under uncertain demand – public subsidy?
– Method: Danau (2010).
Slide 15
Life Impact | The University of Adelaide
Centre for Energy Technology
Future work
• Another application: Wind CHP – a techno-economic analysis? • H2-fuel cells CHP for NEM feed-in and adsorption desalination. • Common use plant c.f. fibre optic network investment.
Slide 16
Life Impact | The University of Adelaide
Centre for Energy Technology
Conclusions
• Enhanced geothermal system CHP application technically feasible. • Geothermal-data centre concept is economically viable. • Techno-economic framework applicable to other unique engineering systems and geographies.
Slide 17
Life Impact | The University of Adelaide
Ricoh Clean Energy Scholarship
Techno-economic assessment of novel engineering systems for stranded geothermal energy resources.
Ashok A. Kaniyal Prof. Graham ‘Gus’ J. Nathan Prof. Jonathan J. Pincus
Delivering innovative technologies for a clean energy future
School of Mechanical Engineering
Life Impact | The University of Adelaide
Centre for Energy Technology
Australia’s Energy Network
Electricity transmission network
Geothermal resources in Cooper Basin
Geothermal resources in Cooper Basin
Slide 1
Oil and Natural Gas Pipeline Life Impact | The University of Adelaide network (Geoscience Australia, 2009)
Centre for Energy Technology
The Geothermal-Data Centre Concept
• Geothermal data fibre link – Capital: $60 m + $15 m (Op ex).
National Broadband Network (NBN)
(NBN Co., 2010)
Geothermal-data fibre link Proposed NBN Co Fibre optic links Fibre optic node
Geothermal-data fibre link ~ $60m
DBCDE, 2010.
Slide 2
Life Impact | The University of Adelaide
Centre for Energy Technology
Presentation outline • Gap in literature; • Techno-economic analysis framework;
• Analysis of Geothermal-data centre concept – early results;
• Future work; • Conclusions.
Slide 3
Life Impact | The University of Adelaide
Centre for Energy Technology
Gap in literature
• Economic assessment of geothermal direct heat and EGS CHP applications. • Address limitations of other novel geothermal engineering systems,
– Dickinson et al. (2010) and Atrens et al. (2009).
• Geothermal-data centre ‘micro-grid’ follows complementary network infrastructure investment.
– c.f. Siddiqui and Maribu (2009), Fleten (2007).
• Application of dynamic capital investment decision methods,
– Not considered in this context.
Slide 4
Life Impact | The University of Adelaide
Centre for Energy Technology
Aims
• Technical feasibility of direct heat and CHP enhanced geothermal system applications, • Economic viability of fibre optic network and geothermal plant under data centre client servicing scenarios: – Net present value - Deterministic static analysis, – NPV approach + dynamic demand and geothermal plant cost uncertainty.
• Social welfare analysis – a case for public involvement in project.
• Application of techno-economic framework to other eng systems.
Slide 5 Life Impact | The University of Adelaide
Centre for Energy Technology
Framework for techno-economic analysis
1. Develop a concept for an engineering system.
Increasing detail 2. Steady state thermodynamic analysis of plant concept. 3. Static NPV analysis of investment. 4. Dynamic analysis of investment in geothermal and network resource faculties. 5. Social benefit analysis of investment in plant and network resource.
Slide 6
Life Impact | The University of Adelaide
Centre for Energy Technology
Standardised data centre unit
• Modular data centre of total capacity 350 kWe (Barroso, 2007):
– IT load = 270 kWe – Cooling load = 200 kWr
Cooling load ~200 kWr
Data Centre Co.
hv Geothermal-data fibre link (1000-1500 km)
NBN market
IT electrical load ~270 kWe
Slide 7
Life Impact | The University of Adelaide
Centre for Energy Technology
EGS CHP – Organic Rankine cycle steady state analysis
Injection well Production well Temperature [K]
Geo-fluid: water
6
Geothermal water: Tin = 508 K, TH = 490 K, ΔT = 5 K, = 50 kg/s.
Radial turbine
490 320 5 5s
6
1 2
Pre-heater
Evaporator
1
4
3 2s
Geo-fluid
5
Generator Wnet = 1.2 MWe
Feed pump
4 3
Entropy (s) [kJ/kg-K]
Absorption refrigeration cycle (not shown) 2 NH3-H20
Ext. heat exchanger Absorption cycle: generator
Φ ≈ 68% (Tc = 562 K, Tin = 375 K, TH = 320 K)
DiPippo (2005) Heberle and Bruggemann (2010) Liu , Chien and Wang (2004)
Refrigeration load
Slide 8
Life Impact | The University of Adelaide
Centre for Energy Technology
Energy consumption pattern
Natural gas electricity generation ≈ 2.55 MWe
Organic Rankine Cycle 1.2 MWe
Geothermal Local CHP Direct heat cooling Absorption chiller cooling 14x Modular data centres
Total IT electrical Load 3.75 MWe
hv
NBN market
Geothermal-data fibre link (1500 km)
3.6 MWth (input) > 2.8MWr (average required output) Absorption chiller plant: COP = 1.0
Broad X Absorption Chiller Design Manual (2008)
Slide 9 Life Impact | The University of Adelaide
Centre for Energy Technology
EGS wells and ORC plant costing
Cost component First injection + production well pair ORC plant
+ natural gas storage tank + construction + contingency.
A$ M $30.5 M $3.82 M
Additional production wells
Ulrich (1984) Vasudevan and Agrawal (2000)
$10.2 M
Slide 10
Life Impact | The University of Adelaide
Centre for Energy Technology
ORC plant economies of scale
$18
Cost of plant and installation (A$ M)
Grass roots capital (Full Plant) ($AUD) Plant size incrementation cost comparison (4 plant units)
$16 $14 $12 $10 $8
4 x 1 plant unit (PU) $15.87 m 3 PU + 1 PU = $12.51m 2 PU x 2 = $11.69m 4 PU $10.93 m
$6
$4 $2 $0 1 2 3 4 5
Geothermal ORC plant units (corresp. no. of production wells)
Slide 11
Life Impact | The University of Adelaide
Centre for Energy Technology
Local CHP – Net Present Value scenarios
NPV scenario iteration Mk 1 Description
- Increasing rate of data centre commitment,
- Early investment = no construction lag.
Mk 2
- Increasing rate of data centre commitment, - Economies of scale investment in plant.
Rt = Annual revenue received per data centre, Ct = Capital and ongoing operating expenditure. i = Cost of capital = 6%
Slide 12
Life Impact | The University of Adelaide
Centre for Energy Technology
Local CHP – Net Present Value scenarios
0 $1 2 3 4 5 15% 10% 5% 0% -5% -10%
NPV and Total expenditure (A$ M)
-$20 -$40 -$60 -$80 -$100
-$120
-$140 -$160
-15%
-20%
Number of capacity increments (production wells + ORC plant) 1 Total expenditure Mk 2
Total expenditure Mk 2 3
-25%
Slide 13
NPV/Total expenditure Mk 1 2
Life Impact | The University NPV/Total expenditure Mk 2 3 of Adelaide
NPV/Total expenditure
Centre for Energy Technology
Fibre optic network investment
Cumulative NPV of investment in Geothermal-Data Fibre link
$100
Cumulative net present value (A$ M)
28% subscription
$80 $60
40% subscription 50% subscription 60% subscription Barroso (2007)
$40
$20 $0 -$20 -$40 -$60
Years
5 10 15 20 25 30 35 40 45
-$80 Slide 14
Life Impact | The University of Adelaide
Centre for Energy Technology
Dynamic investment decision
• Real options approach. • An optimal path for capacity investments given uncertain:
– Data centre demand for remote co-location and competition b/w sites,
• Method: Aguerrevere (2003);
– Influence of learning on cost of establishing geothermal wells and plant,
• Method: Bolton and Faure-Grimaud (2009).
• Social welfare analysis under uncertain demand – public subsidy?
– Method: Danau (2010).
Slide 15
Life Impact | The University of Adelaide
Centre for Energy Technology
Future work
• Another application: Wind CHP – a techno-economic analysis? • H2-fuel cells CHP for NEM feed-in and adsorption desalination. • Common use plant c.f. fibre optic network investment.
Slide 16
Life Impact | The University of Adelaide
Centre for Energy Technology
Conclusions
• Enhanced geothermal system CHP application technically feasible. • Geothermal-data centre concept is economically viable. • Techno-economic framework applicable to other unique engineering systems and geographies.
Slide 17
Life Impact | The University of Adelaide
