Data-centres Offer a Potential Role for Geothermal Energy Investment
Centre for Energy Technology (CET) researchers* are the first to report a comprehensive analysis of the potential for data-centres to offer a low cost pathway to market for geothermal resources situated away from close access to electricity transmission lines. The work also has implications for captive industrial or residential districts.
While energy from hot rock (HR) geothermal resources could contribute significantly to the supply of large-scale renewable electricity worldwide, investment in these resources has been limited by uncertainty about reservoir permeability and induced seismicity from hydraulic fracturing for engineered geothermal systems (EGS).
Concern over induced seismicity suggests large scale generating facilities are likely to be sited far from urban markets. The profitable delivery of electricity to a grid is expected to require plants of 500-1000 MWe (Mega watts) while EGS is yet to be reliably demonstrated even at scales of a few MW.
One alternative to the long-distance transmission of electricity is to use existing pipelines to transport methane produced by the methanation of hydrogen from electrolysis. However the technical challenges of a project of this magnitude - involving 50 MWe of geothermal EGS capacity - would require a significant public subsidy.
Another option is to use existing geothermal energy to meet the combined heat and power requirements of established district communities such as small towns or stranded industries. This approach, where induced seismicity is not an issue, can offer an attractive revenue stream by returning the retail price of electricity however, a drawback is sensitivity of revenue to local climate and the limited number of suitable sites.
The final option for connecting a remote geothermal site to market is to bring customers, like data-centres and telephone exchanges, to the geothermal site. Owing to their stable demand for electricity and refrigeration, these types of facilities offer the potential to mitigate some of the disadvantages of other options. Data-centres offer greater flexibility in geothermal site selection given their modularity, the ubiquity of optical fibre networks and their low cost of extension (see Figure). However to induce data-centres to co-locate with a geothermal facility, it is necessary to offer energy prices no higher than in urban areas.
Caption: Coincidence of high-grade geothermal resources Treservoir>200°C at ~6.5 km in US, ~5 km in Australia) with the respective broadband/fibre optic network.
The researchers made a comparison of energy delivery outcomes for both EGS and hot sedimentary aquifer (HSA) reservoirs to identify the minimum conditions that could make the concept attractive. For a high temperature EGS, a single and dual pressure binary organic Rankine cycle (EGS-ORC, EGS-2 x ORC), a single stage flash (EGS-flash) and a hybrid flash-binary system (EGS-hybrid) were studied.
The HSA system investigated the direct use of the geo-fluid in an absorption chiller for refrigeration and the use of coincidental natural gas resources to deliver electricity via an internal combustion engine. The technical performances of these systems were assessed for a range of well-head pressure (EGS only) and geo-fluid rate scenarios. The economic performance of the combined set of investments in optical fibre and energy infrastructure was examined by estimating the internal rate of return.
The proposed concept was estimated to have an annual capital requirement one-thirtieth of that required for the establishment of 200 MWe of capacity to deliver to electricity to the grid, or one-tenth of that required for 22 MWe of capacity.
Although all scenarios were found to yield positive expected rates of return, only the direct use of the geo-fluid from a hot sedimentary aquifer (HSA-DU) was estimated to exceed a 24% hurdle rate
In the most favourable circumstances it offered 38% through the use of: four well doublets; a fibre optic link costing $A5 million; calculation of the Australian retail electricity price; a data-centre power usage effectiveness ratio of 1:2; and the natural gas being available with no additional cost of infrastructure.
The EGS-hybrid system was estimated to yield up to 19% in the same conditions however this is well below the returns required for commercial viability. The EGS-flash, ORC and 2 x ORC scenarios were estimated to be progressively less attractive. Crediting the HSA-DU, EGS-hybrid and ORC systems for their carbon abatement potential at a rate of $A23 per ton CO2-e improves their E(IRR) by only one percentage point.
E(IRR) denotes the expected internal rate of return. It represents the average of the internal rates of return predicted for a number of sensitivity scenarios. These scenarios correspond to a range of expected power output of the geothermal system which in turn are based on a range of geo-fluid production conditions with varying temperatures and pressures.
The Figure here, represents the feasible economic return while accounting for the economic and technical uncertainty associated with the investment being reviewed. This includes the cost of the fibre optic infrastructure and the technical uncertainty associated with the rate of energy production from the geothermal resource.
The authors concluded that no other modular source of load offering either as great a flexibility in geographical site selection or with so high a ratio of thermal to electrical energy consumption characteristics has been identified for geothermal resources by a publicly reported study. They suggest a firm conclusion about the concept's viability would require an assessment of site-specific conditions. However they conclude the proposed concept offers the geothermal industry a distinctive opportunity to establish a ‘green niche' around the growing market for data-centres to reduce financiers' perceived risks about the technology and thereby the size of any public subsidy.
The authors acknowledge the generous financial support of the Ricoh Clean Energy Scholarship. Author Ashok Kaniyal acknowledges assistance from D Tempesti from the University of Florence for comments on an early draft.
• Edited and summarised version of Kaniyal A. A., Nathan G. J., Pincus J. J., 2012, ‘The potential role of data-centres in enabling investment in geothermal energy', Applied Energy, 98 pp458-466. © 2012 Elsevier Ltd, all rights reserved.
