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Investigating the Economic Effects and the Roadmap of Developing Geothermal Systems to Generate Electricity

Document Type : Research Note

Authors

Faculty of Engineering, University of Mohaghegh Ardabili, P. O. Box: 56199-13131, Ardabil, Ardabil, Iran

Abstract

Geothermal energy is a non-carbon renewable source from the earth's internal energy. This energy is considered reliable today and has a high potential to reduce the threat of climate change. The main factor that any investor wants to invest in any natural energy source is the resulting economy. In the case of geothermal energy, factors that increase the risk of investing in this sector include higher investment costs, longer payback times than other renewable power plants, and the uncertainty of the size and quality of the resources before the completion of the well drilling operation. The average payback time in geothermal energy systems is 5.7 years, longer than wind and solar energy. According to these factors, the risk of investing in geothermal technology increases. On the other hand, due to its independence from oil and gas, it increases a country's energy security, helps to create direct, indirect, and induced employment, and affects other economic sectors. Also, unlike renewable wind and solar energies, it is not dependent on climate change; therefore, it has higher reliability than other renewable energies. Also, by combining this energy with other renewable energies, its performance can be optimized. For example, in an optimal geothermal-solar hybrid power plant, solar energy provides 48 % of the total energy. In this case, the Levelized Cost of Energy (LCOE) is reduced from 225 $ per MWh (only with geothermal source) to 165 $ per MWh. In this study, while studying the economic effects of geothermal systems, an attempt has been made to address the challenges in this field and present the policies implemented in some countries. It is implied that by providing incentive policies and an appropriate roadmap, it is possible to help attract investment in the operation of geothermal systems.

Keywords

Main Subjects

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Journal of Renewable Energy and Environment
Volume 9, Issue 3
September 2022
Pages 52-64
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History
  • Receive Date: 01 December 2021
  • Revise Date: 03 January 2022
  • Accept Date: 11 January 2022
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