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1、The Future of Geothermal EnergyThe IEA examines the full spectrum of energy issues including oil,gas and coal supply and demand,renewable energy technologies,electricity markets,energy efficiency,access to energy,demand side management and much more.Through its work,the IEA advocates policies that w

2、ill enhance the reliability,affordability and sustainability of energy in its 32 Member countries,13 Association countries and beyond.This publication and any map included herein are without prejudice to the status of or sovereignty over any territory,to the delimitation of international frontiers a

3、nd boundaries and to the name of any territory,city or area.Source:IEA.International Energy Agency Website:www.iea.orgIEA Member countries:AustraliaAustriaBelgiumCanadaCzech Republic DenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLatviaLithuania Luxembourg Mexico NetherlandsNew

4、 Zealand NorwayPolandPortugalSlovak Republic SpainSweden Switzerland Republic of Trkiye United Kingdom United StatesThe European Commission also participates in the work of the IEAIEA Association countries:Argentina BrazilChinaEgyptIndia Indonesia Kenya Morocco Senegal Singapore South Africa Thailan

5、d UkraineINTERNATIONAL ENERGYAGENCY The Future of Geothermal Energy Abstract PAGE|3 I EA.CC BY 4.0.Abstract This special report focuses on geothermal,a promising and versatile renewable energy resource with vast untapped potential for electricity generation,heating and cooling.Geothermal has been a

6、part of energy systems for more than 100 years,but it has played a limited role on a global scale.Now,the geothermal industry is at a critical juncture.New technologies are enabling access to previously untapped resources,while cost reductions and innovative financing models are paving the way for i

7、ncreasing geothermals role in energy systems around the world.Additionally,techniques developed by the oil and gas industry including a strong understanding of the subsurface,drilling and completing wells,predicting fluid flows and managing large-scale projects can rapidly drive down costs and help

8、tap geothermal resources deeper in the ground.However,to successfully scale up geothermal energy,a number of challenges need to be addressed,including project development risks,permitting and licensing processes,environmental concerns and social acceptance.This report quantifies the technical and ma

9、rket potential of next-generation geothermal and suggests measures that could help reduce risks,accelerate innovation and increase the bankability of conventional and next-generation projects,allowing for wider geothermal uptake.The Future of Geothermal Energy Acknowledgments PAGE|4 I EA.CC BY 4.0.A

10、cknowledgements,contributors and credits This study was prepared by the IEAs Directorate of Energy Markets and Security and Directorate of Sustainability,Technology and Outlooks.It was designed and directed by Heymi Bahar,Senior Renewable Energy Analyst and Brent Wanner,Head of Power Sector Unit.Chr

11、istophe McGlade,Head of Energy Supply Unit coordinated the analysis on the role of the oil and gas sector.The report benefited from analysis,drafting and input from multiple colleagues.The lead authors of the report were Vasilios Anatolitis,Piotr Bojek,Franois Briens,Eric Buisson,Trevor Criswell,Jul

12、ie Dallard,Eric Fabozzi,Martin Kueppers,Martina Lyons,Laura Mari Martinez,Brieuc Nerincx,Jonatan Olsen,Nikolaos Papastefanakis,Max Schoenfisch,Rebecca Schultz,Jemima Storey,Courtney Turich,Deniz Ugur and Peter Zeniewski.Valuable comments,feedback and guidance were provided by other senior management

13、 and numerous other colleagues within the IEA,in particular Keisuke Sadamori,Tim Gould,Laura Cozzi and Paolo Frankl.Other IEA colleagues who have made important contributions to this work include:Yasmine Arsalane,Chiara Delmastro,Syrine El Abed,Ilkka Hannulla,Jeanne-Marie Hays,Rafael Martinez Gordon

14、,Ryszard Pospiech,Rebecca Ruff,Thomas Spencer and Natalie StClair.Timely data from the IEA Energy Data Centre were fundamental to the report,with particular assistance provided Luca Lorenzoni,Nicola Draghi and Taylor Morrison.Many experts from outside of the IEA provided valuable input,commented and

15、 reviewed this report.In particular,this analysis greatly benefited from extensive collaboration with Project InnerSpaceTM,who conducted the modelling and assessment of the geothermal technical potential,building upon the GeoMapTM tool.Ryan Au,Helen Doran,Stephen Lee,Veit Matt,Dani Merino-Garcia,Dre

16、w Nelson and Claudia Olivares provided major contributions.Additional valuable input was provided by:El Salvador(General Directorate of Energy,Hydrocarbons and Mines),European Commission(Directorate General for Energy;Directorate General for Research and Innovation),Greece(Ministry of Environment an

17、d Energy),Hungary(Authority for the Supervision of Regulated Activities),Japan(Ministry of Economy,Trade and Industry,Japan Organization for Metals and Energy Security),South Korea(Korean Institute of Geoscience and Mineral Resources(KIGAM),Poland The Future of Geothermal Energy Acknowledgments PAGE

18、|5 I EA.CC BY 4.0.(Ministry of Climate),the Philippines(Department of Energy),Switzerland(Swiss Federal Office of Energy),Slovakia(Ministry of Investments,Regional Development and Informatization),United Kingdom(British Geological Survey)and United States(Department of Energy;Lawrence Berkeley Natio

19、nal Laboratory).Baseload Capital,Breakthrough Energy,Cascade Institute,China Petrochemical Corporation(Sinopec),CHUBU Electric Power,Clean Air Task Force,C Thermal,DynaSTEER,Eavor,lectricit de Strasbourg Gothermie(ES),EnBW,Enel,Ennatuurlijk Aardwarmte,Ensenada Center for Scientific Research and High

20、er Education of Baja California,Equinor,Euroheat and Power,European Geothermal Energy Council,Fervo,GA Drilling,Geotermica,Geothermal Wells,Halliburton,HEET,IFP Energies Nouvelles(IFPEN),Institute of Geological and Nuclear Sciences Limited of New Zealand(GNS Science),International Association of Dri

21、lling Contractors,I-Pulse,Netherlands Enterprise Agency(RVO),Netherlands Organisation for Applied Scientific Research(TNO),ORMAT Technologies,OMV,Project InnterSpace,Repsol,Shell,SLB,Star Energy Group,Steam SRL,TerraThermo,Turboden,Quaise Energy,UnderGround Ventures,Viridien,Vulcan,Zorlu.The authors

22、 would also like to thank Kristine Douaud for skilfully editing the manuscript and the IEA Communication and Digital Office,in particular Poeli Bojorquez,Gaelle Bruneau,Astrid Dumond,Merve Erdil,Liv Gaunt,Grace Gordon,Oliver Joy,Isabelle Nonain-Semelin,Clara Vallois,Lucile Wall and Wonjik Yang for t

23、heir assistance.The study benefitted from the outcomes of the discussions at the IEA Workshop The Future of Geothermal held in October 2024.The Future of Geothermal Energy Table of contents PAGE|6 I EA.CC BY 4.0.Table of contents Executive summary.7 Policy recommendations.11 Introduction.12 Chapter

24、1:Conventional geothermal.16 Total final consumption.16 Policy.21 Costs,investment and jobs.24 Outlook.30 Chapter 2:Geothermal innovation and technical potential for next generation technologies.36 Recent technological innovation.36 Technical potential.42 Key technical challenges.52 Investment in ne

25、xt-generation geothermal innovation.56 Chapter 3:The oil and gas industry and geothermal.60 Introduction.60 Role of oil and gas industry to date.60 Overlapping competencies in the oil and gas and geothermal industries.62 Leveraging oil and gas industry expertise to reduce geothermal costs.66 Skill d

26、evelopment and implications for workers.70 Oil and gas and geothermal project financing.73 Chapter 4:Next-generation geothermal market potential.75 Overview.75 Next-generation geothermal for electricity.77 Next-generation geothermal for heat.90 Geothermal energy storage.99 Flexibility in power syste

27、ms.103 Geothermal brine and the extraction of critical materials.106 Chapter 5:Policy.113 Designing an enabling ecosystem.113 Financial support.117 Research and innovation.124 Jobs and skills.125 The Future of Geothermal Energy Executive summary PAGE|7 I EA.CC BY 4.0.Executive summary Technology bre

28、akthroughs are unlocking huge potential for geothermal energy Advances in technology are opening new horizons for geothermal,promising to make it an attractive option for countries and companies all around the world.These techniques include horizontal drilling and hydraulic fracturing honed through

29、oil and gas developments in North America.If geothermal can follow in the footsteps of innovation success stories such as solar PV,wind,EVs and batteries,it can become a cornerstone of tomorrows electricity and heat systems as a dispatchable and clean source of energy.For the moment,geothermal meets

30、 less than 1%of global energy demand and its use is concentrated in a few countries with easily accessible and high-quality resources,including the United States,Iceland,Indonesia,Trkiye,Kenya and Italy.With continued technology improvements and reductions in project costs,geothermal could meet up t

31、o 15%of global electricity demand growth to 2050.This would mean the cost-effective deployment of as much as 800 GW of geothermal power capacity worldwide,producing almost 6 000 terawatt-hours per year,equivalent to the current electricity demand today of the United States and India combined.Geother

32、mal is a versatile,clean and secure energy source Geothermal can provide around-the-clock electricity generation,heat production and storage.As the energy source is continuous,geothermal power plants can operate at their maximum capacity throughout the day and year.On average,global geothermal capac

33、ity had a utilisation rate over 75%in 2023,compared with less than 30%for wind power and less than 15%for solar PV.In addition,geothermal power plants can operate flexibly in ways that contribute to the stability of electricity grids,ensuring demand can be met at all times and supporting the integra

34、tion of variable renewables such as solar PV and wind.The potential for geothermal is now truly global The full technical potential of next-generation geothermal systems to generate electricity is second only to solar PV among renewable technologies and sufficient to meet global electricity demand 1

35、40-times over.This is a key finding of first-of-a-kind analysis of geothermal potential conducted for this report in The Future of Geothermal Energy Executive summary PAGE|8 I EA.CC BY 4.0.collaboration with Project InnerSpace.Geothermal energy potential increases as developers access higher heat re

36、sources at greater depths.New drilling technologies exploring resources at depths beyond 3 km open potential for geothermal in nearly all countries in the world.Using thermal resources at depths below 8km can deliver almost 600 TW of geothermal capacity with an operating lifespan of 25 years.Geother

37、mal can also provide a continuous source of low-and medium-temperature heat for use in buildings,industry and district heating.Global geothermal potential from sedimentary aquifers at depths up to 3 km and temperatures greater than 90C is estimated around 320 TW.This is consistent with the requireme

38、nts of existing fossil fuel-fired district heating networks,which could be decarbonised by switching to geothermal heat.For lower temperature requirements,the potential for geothermal increases about tenfold.The technical potential of geothermal would be more than enough to meet all electricity and

39、heat demand in Africa,China,Europe,Southeast Asia and the United States.Geothermal holds particular promise in markets with rapidly rising electricity demand by complementing output from other low-emissions technologies such as renewables and nuclear power while also bolstering energy security.Inves

40、tment in geothermal is growing Governments,oil and gas companies and utilities are among those looking for investment opportunities in geothermal.If deep cost reductions for next-generation geothermal can be delivered,total investment in geothermal could reach USD 1 trillion cumulatively by 2035 and

41、 USD 2.5 trillion by 2050.At its peak,geothermal investment could reach USD 140 billion per year,which is higher than current investment in onshore wind power globally.As a dispatchable source of clean power,geothermal is also attracting interest from stakeholders beyond the energy industry,includin

42、g technology companies looking to meet the fast-growing demand for electricity in data centres.The market potential for next-generation geothermal is spread around the world Cost-competitive geothermal would offer a much-needed source of dispatchable low-emissions electricity to markets around the w

43、orld.Rising awareness of the potential for geothermal comes at a time when global electricity demand growth is set to accelerate due to both conventional uses,such as cooling,and newer ones,such as electric vehicles and data centres.The availability of geothermal would be particularly valuable to bo

44、lster electricity security in regions looking to transition away from coal-fired power,such as China,India and Southeast Asia,or to complement large amounts of solar PV and wind The Future of Geothermal Energy Executive summary PAGE|9 I EA.CC BY 4.0.in regions such as Europe and the United States.Ch

45、ina,the United States and India have the largest market potential for next-generation geothermal electricity,together accounting for three-quarters of the global total.The oil and gas industry can play a key role in boosting the cost-effectiveness of geothermal Up to 80%of the investment required in

46、 a geothermal project involves capacity and skills that are common in the oil and gas industry.The industry has transferable skills,data,technologies and supply chains that make it central to the prospects for next-generation geothermal.Diversifying into geothermal energy could be of great benefit t

47、o the oil and gas industry,providing opportunities to develop new business lines in the fast-growing clean energy economy,as well as a hedge against commercial risks arising from projected future declines in oil and gas demand.Technologies and resources are available but cost reductions are crucial

48、Policy and innovation support,together with the expertise of the oil and gas sector,can help to bring down costs for new next-generation geothermal projects to levels that make it one of the cheapest dispatchable sources of low-emissions electricity.Costs for next-generation geothermal are relativel

49、y high today compared with other low-emissions technologies.But engagement from policymakers and the oil and gas industry can lead to a significant fall in geothermal costs as new projects are commissioned,as has been proven possible by the rapid cost reductions for solar PV,batteries and EVs over t

50、he past decade.We estimate that,with the right support,costs for next-generation geothermal could fall by 80%by 2035.At that point,new projects could deliver electricity for around USD 50 per megawatt-hour,which would make geothermal one of the cheapest dispatchable sources of low-emissions electric

51、ity,on a par or below hydro,nuclear and bioenergy.At this cost level,next-generation geothermal would also be highly competitive with solar PV and wind paired with battery storage.Challenges related to permitting and environmental impacts need to be addressed Permitting and administrative red tape m

52、ean that it can take up to a decade to commission a new geothermal project:a renewed effort to simplify project development while maintaining high environmental standards will be essential.Governments could simplify permitting processes by consolidating and accelerating administrative steps involved

53、.Governments could also consider dedicated geothermal permitting regimes separate from minerals mining.Policies The Future of Geothermal Energy Executive summary PAGE|10 I EA.CC BY 4.0.and regulations enforcing robust environmental standards are critical for the responsible development of geothermal

54、 projects.Delivering widespread and competitive geothermal will require specialised labour The geothermal industry provides around 145 000 jobs today and geothermal employment could rise more than sixfold to 1 million by the end of this decade,but there is a risk of a skills shortfall.Many people wo

55、rking in geothermal today came from the oil and gas sector,and future geothermal developments will hinge on having a skilled,appropriately sized workforce.Enrolments in degree programmes traditionally associated with the fossil fuel industry have fallen in many advanced economies in recent years and

56、 this could have knock-on implications for geothermal developments.Further support for university degrees,apprenticeships,training programmes,and regional and international centres of excellence is needed.Government support is needed to encourage investment and help reduce costs of next generation g

57、eothermal Policy support is lagging:more than 100 countries have policies in place for solar PV and/or onshore wind,but less than 30 have implemented policies for geothermal.If geothermal is to realise its potential,governments need to move it up the national clean energy policy agenda with specific

58、 goals and roadmaps and recognise its unique features as a source of firm,dispatchable low-emissions electricity and heat.Along with support for innovation and technology development,governments could design policies that de-risk project development.These could include policies focusing on risk miti

59、gation measures at the early project development phase and on contracts ensuring long-term revenue certainty.The Future of Geothermal Policy recommendations PAGE|11 IEA.CC BY 4.0.Policy recommendations Move geothermal up the energy policy agenda by making geothermal energy more prominent in national

60、 energy planning;developing dedicated goals and technology roadmaps;and recognising the unique features of geothermal as a source of firm,dispatchable low-emissions electricity and heat.Design risk mitigation schemes for early-stage project development,including in collaboration with regional,nation

61、al and international finance institutions.Introduce policies ensuring long-term revenue certainty and fair remuneration through long-term contracts and support schemes that properly compensate for contributions to system adequacy and flexibility.Simplify and streamline permitting for geothermal ener

62、gy by consolidating and accelerating administrative steps involved.Consider dedicated geothermal permitting regimes separate from minerals mining.Design policies and regulations enforcing robust environmental and social safeguards by actively engaging communities.Support geothermal heat applications

63、 for residential,commercial and industry use by investing in heat demand mapping,energy system planning,district network infrastructures and by financing at national,regional and city levels.Improve data quality and create open data repositories to facilitate geothermal resource assessments for inve

64、stors.Expand geothermal-specific research and innovation programmes including demonstration and testing of emerging technologies.Increase policy focus on expanding geothermal skillsets to meet growing demand for workforce by increasing the number of geothermal-specific academic programmes and traini

65、ngs in partnership with academia and industry.Promote international collaboration to develop technical standards for geothermal to address environmental concerns and enable scalability for achieving economies of scale.The Future of Geothermal Introduction PAGE|12 IEA.CC BY 4.0.Introduction This spec

66、ial report focuses on geothermal energy,a promising and versatile renewable energy resource with vast untapped potential for electricity generation,heating and cooling.Geothermal energy is the thermal(heat)energy derived from the Earths subsurface.Part of this energy is residual heat generated durin

67、g the planets formation(i.e.from planetary accretion and the decay of short-lived radioactive isotopes)more than 4 billion years ago.The rest originates mostly from the continuous and spontaneous radioactive decay of naturally occurring isotopes(e.g.uranium 238 and 235,thorium 232 and potassium 40)w

68、ithin the Earths core and mantle,which maintains the core temperature at around 5 000C.This heat from the core and mantle is transferred to the Earths surface through conduction(heat passing through materials)as well as convection and advection mechanisms(heat being transported by a moving fluid e.g

69、.magma),resulting in a continuous heat flow of about 45 TW across the surface of the globe.Another portion of the Earths thermal energy comes from solar radiation at the surface and from ambient heat absorbed and accumulated over millennia,which influences the temperature of soil,bedrock and water a

70、t shallow depths everywhere on Earth.The temperature difference between the Earths core and surface induces a temperature gradient in the crust:on average,the temperature increases 25-30C per kilometre of depth.However,geothermal heatflows and temperature gradients are unevenly distributed and are s

71、trongly linked to tectonic conditions,including volcanic activity at spreading centres,rift zones,subduction zones and hot spots,as well as crustal extension(with thinner crust).These circumstances can lead to regionally elevated temperatures in the crust,and temperatures can also be higher in areas

72、 with extensive sediment-covered granitic intrusions,due to heat produced from radioactive decay.Geothermal energy systems harness this heat from the subsurface and transport it to the surface,where it can be used for heating and cooling,electricity generation and energy storage.Geothermal heat can

73、be carried to the surface by fluids naturally occurring in the subsurface in specific geological settings such as aquifers,where water trapped in porous or fractured rock beneath a layer of relatively impermeable caprock forms a reservoir and is heated by the surrounding rock.Temperature,fluid and T

74、he Future of Geothermal Introduction PAGE|13 IEA.CC BY 4.0.rock permeability conditions define hydrothermal resources.The systems used to exploit these hydrothermal reservoirs are what this report refers to as conventional geothermal technologies.Efforts to overcome dependency on location-specific h

75、ydrothermal resources have led to the development of new approaches that harvest heat at greater depths by circulating a fluid from the surface through engineered systems,either through fractured rock or in closed-loops circuits,sometimes in areas that have no preexisting hydrothermal reservoir.Thes

76、e approaches,also termed reservoir-independent,are more recent and generally less mature.This report therefore refers to them as next-generation geothermal technologies.Overall,they include enhanced geothermal systems(EGSs)and closed-loop geothermal systems(CLGSs),with the latter sometimes also refe

77、rred to as advanced geothermal systems(AGSs).In addition,low-temperature heat can be transferred from and to the near-surface(100m of depth)using ground-source heat pumps also called geothermal heat pumps to supply a variety of applications with low-and medium-temperature heat(generally below 200C)o

78、r cooling.Temperature requirements for possible geothermal energy applications IEA.CC BY 4.0.Sources:IEA analysis based on data from Arpagaus,C.et al.(2018),High Temperature Heat Pumps;US DOE(2019),GeoVision.Unlike for other renewable energy sources such as wind,solar and hydro,geothermal energy pro

79、duction does not depend on climatic conditions or seasonality.It can be used in direct applications(for space and water heating and cooling,or for industrial processes)or for electricity generation,with different 0 50 100 150 200 250 300 350 400Binary plantsFlash and dry steam plantsGeothermal heat

80、pumpsAquacultureGreenhouse heatingDistrict heatingTextile processingFood and beverage processingPaper processingWood processingMetal surface treatmentPowerHeatTemperature requirement(C)The Future of Geothermal Introduction PAGE|14 IEA.CC BY 4.0.technologies(e.g.binary,flash and dry steam plants1)dep

81、ending on the geothermal resource conditions(temperature,pressure of the reservoir)and properties(e.g.reservoir geology,permeability/porosity,heat transfer conditions);the chemical properties of the fluid;and whether the fluid is in vapor or liquid phase in the system.However,several challenges must

82、 be addressed to successfully scale up geothermal energy development.This report presents these obstacles and highlights policy strategies,measures and actions that stakeholders could take to help spur geothermal deployment and realise its potential contribution to low-carbon energy systems in upcom

83、ing decades.The first chapter of this report summarises the state of conventional geothermal energy development worldwide,its current role in final energy consumption for heating and cooling as well as electricity generation,and the policy and market environment.It also presents untapped potential a

84、nd provides the IEAs conventional geothermal outlook for power generation and heat.The second chapter introduces recent technology innovations in geothermal energy systems what this report refers to as next-generation geothermal and explores how these innovations could technically unlock substantial

85、 energy resources.It describes an assessment of this new technical potential for power and heat applications and discusses remaining technical challenges and ongoing research to overcome them.In the third chapter,we highlight how the oil and gas sector could contribute to low-carbon energy transitio

86、ns by leveraging its extensive resources and its long-term expertise and knowhow to support and accelerate geothermal development,while diversifying its activity.This chapter discusses competencies and overlaps between the oil and gas and geothermal industries,assesses the potential cost reductions

87、achievable through expertise and technology transfers,and explores the implications in terms of skill development and worker opportunities.Next,the fourth chapter delves into the cost competitiveness of next-generation technologies,explores their future market potential and provides a global and reg

88、ional outlook for power and direct-use applications,including industrial heat and district heating.It also discusses how geothermal energy storage could 1 Geothermal power plants use heat from the geothermal fluid to power a turbine that turns a generator to produce electricity.The heat-depleted geo

89、thermal fluid is then reinjected into the reservoir,where it collects heat again.Binary-cycle power plants circulate the geothermal fluid through a heat exchanger to heat and vaporise a second fluid that flows through the turbine to produce electricity(generally using a closed-loop Rankine cycle).Fl

90、ash steam power plants process the geothermal fluid to separate steam from water,before flowing the steam through the turbine to generate electricity.Dry steam power plants inject geothermal steam that is above the saturation point of water directly into the turbine to generate electricity,without n

91、eeding to separate water from steam.Binary plants can operate with fluids at lower temperatures than flash and dry steam plants(from 95C versus more than 180C),but they also have lower conversion efficiencies and generally higher investment costs.The Future of Geothermal Introduction PAGE|15 IEA.CC

92、BY 4.0.enhance power system flexibility and describes possible geothermal system opportunities for(and contributions to)lithium production.Finally,the fifth chapter discuss challenges to faster geothermal energy development and provides policy examples,suggestions and recommendations.The Future of G

93、eothermal Energy Chapter 1 PAGE|16 IEA.CC BY 4.0.Chapter 1:Conventional geothermal Total geothermal energy use Geothermal energy is directly used to heat and cool buildings(space and water),including through district heating networks,as well as for electricity generation.Geothermal technologies also

94、 have considerable energy storage potential.In 2023,geothermal energy use reached 5 exajoule(EJ),accounting for almost 0.8%of global energy demand.Among clean energy sources,modern bioenergy makes up almost 7%of global energy demand,while the shares of others such as hydropower,nuclear,wind and sola

95、r range from 1%to 3%each.Today,geothermal remains the second least-used clean energy source after ocean energy.Shares of clean energy technologies in total energy demand,2023 IEA.CC BY 4.0.Notes:Values exclude geothermal heat harnessed by ground-source heat pumps,which is not included in official IE

96、A statistics.However,estimates of geothermal heat from ground-source heat pumps derived from modelling are included in the heat discussion below,as well as in the outlook section.“Modern bioenergy”includes all bioenergy in the form of liquids(ethanol,biodiesel and biojet fuel),gases(biogas and biome

97、thane)and solids,excluding the traditional use of solid bioenergy such as a three-stone fire or basic improved cook stoves(ISO tier 375C)impermeable crystalline basement formations,which could boost energy flows significantly.EGS approaches have been explored since the 1970s,with the first pilot pro

98、ject drilled at Fenton Hill in the United States in 1974.Since then,over 30 experimental EGS projects have been operated with varying levels of success,including in Australia,Finland,France,Germany,Japan,the United Kingdom,Switzerland and South Korea.Notable recent EGS breakthroughs include the use

99、of horizontal wells(versus deviated wells in earlier projects)and multistage stimulation techniques(demonstrated in 2023 at Fervos Project Red in Nevada),which increase reservoir volumes and heat transfer area,and make flow rates higher and more consistent.Vertical well depths,reservoir temperatures

100、 and maximum sustained flow rates of selected enhanced geothermal projects Notes:Dates correspond to the year the flow rate was achieved.Flow-testing duration varied significantly across sites,from hours to years.Sources:Breede,K.,K.Dzebisashvili and G.Falcone(2013),A Systematic Review of Enhanced(o

101、r Engineered)Geothermal Systems;Baujard,C.et al.(2017),Hydrothermal Characterization of Wells GRT-1 and GRT-2 in Rittershoffen,France;Norbeck,J.H.and T.Latimer(2023),Commercial-Scale Demonstration of a First-of-a-Kind Enhanced Geothermal System;Fervo Energy(2023),Fervo Energy Announces Technology Br

102、eakthrough in Next-Generation Geothermal;Fervo Energy(2024),Fervo Energys Record-Breaking Production Results Showcase Rapid Scale Up Of Enhanced Geothermal.01 0002 0003 0004 0005 0006 000Le Mayet(FR)-1978Hijiori(JP)-1988Fenton Hill(US)-1992Gro Schnebeck(DE)-2003Paralana(AU)-2005Landau(DE)GenesysHann

103、over(DE)-Northwest Geysers(US)-2011Cooper Basin(AU)-2012Desert Peak(US)-2013Rittershoffen(FR)-2014Soultz(FR)-2017Fervo Project Red(US)-2023UtahFORGE(US)-2024Fervo Cape Station(US)-2024Well depth(m)0 100 200 300 400 500Reservoir temperature(C)0 30 60 90 120Flow rate(L/s)The Future of Geothermal Energ

104、y Chapter 2 PAGE|39 IEA.CC BY 4.0.Notable ongoing EGS projects include:The Utah FORGE research project(highly deviated deep wells more than 2 400 m below the surface in crystalline basement rock),begun in 2015 and sponsored by the US Department of Energy.Fervo Energys 400-megawatt(MW)Cape Station pr

105、oject(21 horizontal geothermal wells at a target depth of 2 400 m)also in the United States,expected to start commercial operation in 2026.The Haute-Sorne project of Geo-Energie Suisse and Geo-Energie Jura in Switzerland,using the same concepts and technologies as the Utah FORGE and Fervo projects.A

106、 4 000 m-deep vertical well was drilled in 2024 and a stimulation test is planned for spring 2025.If successful,a second well will be drilled in 2026 and the reservoir will be stimulated in 2027.Commercial power generation is planned for 2029(expected capacity of 5 MWe).The project has been financed

107、 by several Swiss city utilities and subsidised by the Swiss federal state(CHF 90 million of which CHF 65 million from the government).EGS technology remains technically challenging,with multiple projects having experienced difficulties in reducing water losses and parasitic loads from pumping fluid

108、 through the system,and in maintaining well integrity,distributed permeability of the reservoir,high flow rates,and production temperatures over time.7 In addition,reservoir stimulation generally requires a significant amount of water and engenders several risks,most notably induced seismicity from

109、formation fracturing,which has already led to social opposition from local communities and the banning of the technique in some jurisdictions.However,recent flow rate achievements in ongoing projects indicate that new experimental EGS approaches,such as the use of horizontal wells and cased wells,ne

110、w stimulation methods and adherence to appropriate protocols for seismicity could help resolve some of these challenges.Closed-loop geothermal systems Closed-loop geothermal systems(CLGSs)sometimes also referred to as advanced geothermal systems(AGSs)require the drilling and sealing of deep,large,ar

111、tificial closed-loop circuits.These systems act as underground heat exchangers in which a fluid is circulated and heated by surrounding hot rocks(without chemically interacting with them)through conductive heat transfer.7 Thermal short-circuits can happen in EGSs when reservoir porosity becomes unev

112、en and the working fluid starts flowing through a preferred crack.This process is generally self-reinforcing and causes accelerated cooling of the rock around the predominant pathway,reduced heat exchange,and a premature drop in production temperature.Expensive flow-control measures are required to

113、mitigate this risk,or interventions such as refracturing are necessary to extend project lifetimes.The Future of Geothermal Energy Chapter 2 PAGE|40 IEA.CC BY 4.0.Different designs have been researched,including deep vertical doublets with laterals,and single vertical boreholes with concentric isola

114、ted pipes.One advantage of CLGSs is that they have very few site-specific requirements,enabling their application virtually everywhere and limiting development risks related to resource availability.They also have relatively high output predictability,low water consumption and,in contrast with EGSs,

115、do not require reservoir stimulation,which is expected to limit the risk of induced seismicity.Technical challenges stem essentially from the considerable drilling distance required to create a sufficient heat transfer area within the surrounding rock.In fact,the drilling length is multiple times(i.

116、e.an order of magnitude)longer than for traditional geothermal or EGS wells,which translates into higher costs and more complex downhole completions.Limiting production temperature declines over time is another difficulty that improved project designs and operating patterns will have to overcome.Whi

117、le EGS projects involve risk and uncertainty linked with specific site characteristics,CLGS challenges are more engineering related.Concrete examples of closed-loop projects are more novel than EGSs.Although only a handful of CLGS concepts have materialised into full-scale projects to date,they have

118、 proven their technical feasibility.Nonetheless,there is still only a small amount of field data available to judge their long-term performance and scalability potential.CLGS examples include the 2019 Eavor-LiteTM demonstration project in Alberta,Canada,as well as GreenFire Energys GreenLoop demonst

119、ration project at the Coso field in California,although the latter is a slightly different concept initially designed to retrofit existing hydrothermal wells.Notable ongoing developments include Eavors commercial heat and power plant project in Geretsried,Germany.Examples of closed-loop geothermal p

120、rojects Project(company)Description Eavor-lite(Eavor)Location:Alberta,Canada Completion date:2019 Design:U-tube-shaped closed loop with two 1 700 m-long laterals at a depth of 2 400 m,sealed with chemical completion technique,circulating a water-based working fluid driven by thermosiphon effect.Outl

121、et temperature:50C Flow rate:5.6 L/s Source:Eavor Technologies,2024 The Future of Geothermal Energy Chapter 2 PAGE|41 IEA.CC BY 4.0.Project(company)Description Coso Greenloop(Greenfire)Location:Walnut Creek,California,United States Completion date:2019 Design:Single well,330 m-deep downbore co-axial

122、 heat exchanger through which water and supercritical CO2 are circulated and returned to the surface through a vacuum-insulated tube.Designed as a well retrofit solution.Outlet fluid:180C,11 bar Flow rate(water):26 kg/s Output:1.2 MWe Eavor-Europe(Eavor)Location:Geretsried,Bavaria,Germany Completion

123、 date:Scheduled for 2027 for the overall project drilling started in 2023 and power generation from the first heat exchanger is expected to start in the first half of 2025,while drilling for other exchangers continues.Design:Four subsurface heat exchangers(called“Eavor-Loops”),each formed by twenty-

124、four 3 500 m-long lateral wells drilled from the base of two 4 500 m-deep vertical wells and connected in pairs(totalling about 320 km of drilling length for the whole project),using water as working fluid,circulated by thermosiphon.Expected output:64 MWth/8.2 MWe Source:Eavor Technologies,2024 EGS

125、and CLG approaches are not intended to replace conventional geothermal techniques,which are expected to remain more cost-effective in suitable locations.These techniques are complementary,and their relevance depends on site characteristics and planned applications.The Future of Geothermal Energy Cha

126、pter 2 PAGE|42 IEA.CC BY 4.0.Technical potential By avoiding the natural-reservoir dependency of conventional geothermal projects,EGS and AGS approaches enable the technical exploitation of geothermal heat in almost any location.Because subsurface temperatures generally increase with vertical depth,

127、8 the temperature conditions required for heat and power generation can be found by simply drilling deep enough,making a considerable amount of geothermal energy technically accessible.In collaboration with the IEA,and building upon the Geothermal Exploration Opportunities Map(GeoMapTM)project,Proje

128、ct InnerSpaceTM has assessed the total technical geothermal potential of hydrothermal systems and EGSs specifically for this report using geographical information system(GIS)modelling and multiple regional and global data resources.Project InnerSpace methodology for assessing combined conventional a

129、nd EGS potential The assessment method is based on a“heat-in-place”or“volumetric”approach(originally proposed by Muffler and Cataldi in 1978),which estimates the quantity of thermal energy stored in a subsurface volume up to a given depth and at a temperature greater than the minimum needed for the

130、different applications(e.g.district heating,industrial processes,power generation).This approach requires first that global heat density maps be established by estimating subsurface temperatures and porosity across the globe.Temperature profiles were built from surface temperature and geothermal tem

131、perature gradient datasets the latter derived from multiple public domain sources.Porosity profiles were derived from sediment thickness maps,based on compaction curves.The volume of the subsurface between 500 m and 8 000 m of depth was split into elementary volumes of approximately 1 km x 1 km at 5

132、00 m of thickness.The usable heat stored in each of these elementary reservoirs is represented by:=(1 )+)0;()is the volume of the reservoir considered(m3)and are respectively the densities of the rock matrix and the pore fluid(assumed to be water here)(kg/m3)8 Temperature gradients vary by location.

133、The global average is 25C per km of vertical depth on the upper part of the continental crust,but some locations near tectonic borders and volcanic areas exceed 50C per km.The Future of Geothermal Energy Chapter 2 PAGE|43 IEA.CC BY 4.0.and are respectively the specific heat capacities of the rock an

134、d the pore fluid under the reservoir conditions(kJ/kgC)is the porosity of the reservoir(volume fraction of the fluid)is the reservoir temperature.Reservoir volumes with temperatures above 250C for EGSs and above 350C for hydrothermal applications were excluded due to field data limitations and addit

135、ional challenges associated with higher temperatures.is defined in relation to the application considered,to reflect minimum temperature requirements.For instance,this assessment chose relatively conservative assumptions of a cutoff temperature of 40C for agriculture processes,90C for district heati

136、ng,60C for low-temperature industrial processes and 200C for medium-temperature processes meaning it excludes subsurface volumes with temperatures below these values.For power generation,only subsurface volumes with temperatures above 150C were considered,and was set to 10 to reflect constraints of

137、acceptable reservoir temperature decline,related to the fact that power plants are designed to operate within a narrow range of fluid temperature conditions.9 Technical power generation potential is then derived from the calculation of total usable heat by applying a recovery factor of 20%(based on

138、NREL,2011,2016 and 2023)and,for electricity,a heat-to-power conversion efficiency dependent on exergy(following Beckers and McCabe,2019).This generation potential is then translated into power capacity,assuming 20 years of operation at a capacity factor of 80%for electricity and 25 years of operatio

139、n at a capacity factor of 90%for heat.Finally,the levelised cost of electricity and heat(LCOE/LCOH)associated with this technical potential is calculated considering the technology used(EGSs or hydrothermal),based on assumptions for the number of wells and flow rate;drilling and stimulation costs;po

140、wer plant equipment costs;operating expenses;derisking and construction time;and the discount rate.Additional costs such as for transmission line requirements and grid connection are not included.Assumptions used to assess geothermal potential Parameter Value Number of wells 10 Horizontal length 3 0

141、00 m Injector/producer ratio 1:1 Total flow rate 80 kg/s 9 The assumed threshold of 10C average temperature decline in the reservoir is based on NREL(2011,2016 and 2023).The Future of Geothermal Energy Chapter 2 PAGE|44 IEA.CC BY 4.0.Parameter Value Temperature decline(C/year)10-year plateau followe

142、d by a 60C temperature drop over the next 10 years Productivity 5 kg/s/bar Drilling cost USD 2 000/m Stimulation cost USD 2 800/m Power generation CAPEX USD 2 250/kW OPEX(as%of CAPEX)2%Production lifetime 20 years for power/25 years for heat Capacity factor 80%for electricity/90%for heat Derisking a

143、nd construction time 6 years Most of the geological data supporting this analysis are freely accessible through the GeoMAPTM platform,developed by Project InnerSpaceTM in partnership with Google.The GeoMapTM platform provides surface and subsurface modules that include 200+layers of data as well as

144、a techno-economic sensitivity tool,allowing users to explore development potential in specific geographies.Many contributors have worked with Project InnerSpaceTM on the GeoMAP project:Sven Fuchs and Florian Neumann(GFZ,Potsdam)for IHFC heatflow data;Veit Matt and Helen Doran for the BHT temperature

145、 database;Paul Markwick(Knowing Earth),Douglas Paton,Estelle Mortimer(Tectonknow)and Michal Nemok(RM Geology)for tectonics;Nicky White,Megan Holdt and Philippa Slay(University of Cambridge)for sediment thickness;Sergei Lebedev,Yihe Xu,Raffaele Bonadio(University of Cambridge)and Javier Fullea(Univer

146、sidad Complutense de Madrid)for lithosphere definitions and thermal modelling.Electricity potential Globally,the amount of electricity that could be technically generated by EGSs for less than USD 300 per megawatt-hour(MWh)using thermal resources within 8 km of depth is about 300 000 exajoule(EJ).Th

147、is is equivalent to almost 600 terawatt(TW)of geothermal capacity operating for 20 years exceeding the technical potential of conventional geothermal by almost 2 000 times.Compared with other renewable power generation sources and technologies,geothermal has the second-largest technical potential fo

148、r electricity-generating capacity after solar PV,and almost three times that of onshore wind and more than five times that of offshore wind.Given the average capacity factors of each The Future of Geothermal Energy Chapter 2 PAGE|45 IEA.CC BY 4.0.renewable technology,geothermals 4 000 petawatt-hour(

149、PWh)(15 000 EJ)of technical potential for annual generation is about 150 times current global annual electricity demand.Furthermore,this estimate relates to electricity generation only,while in practice additional waste heat could also be used for district heating or industrial processes.Technical p

150、otential of selected renewable energy technologies for electricity generation Sources:Geothermal:Project InnerSpaceTM calculations for EGSs based on GeoMapTM data with a threshold of USD 300/MWh,in collaboration with IEA.Offshore wind:IEA(2019),Offshore Wind Outlook 2019.Hydropower:IEA TCP 2010.Bioe

151、nergy:IEA calculation based on the assumption that all sustainable bioenergy potential of 100 EJ is used for power generation.Onshore wind:based on DTU-2027 study.Solar PV:technical potential from various studies in de La Beaumelle N.A.et al.(2023),The Global Technical,Economic,and Feasible Potentia

152、l of Renewable Electricity.Spl Geothermal energy potential increases as you tap into deeper and hotter resources.The technical potential for geothermal electricity at depths of less than 5 000 m is an estimated 42 TW of power capacity over 20 years of generation(21 000 EJ),while potential at 5 000-8

153、 000 m exceeds 550 TW(280 000 EJ).At a depth of 2 000 m,only a limited number of countries with favourable geothermal conditions can effectively harness high-temperature heat for electricity generation.Conditions for geothermal electricity generation generally become more widely plentiful at greater

154、 depths:for instance,almost every region has technically suitable resources beyond 7 000 m.0 100 200 300 400 500 600 700 800Solar PVGeothermalOnshore windOffshore windHydropowerBioenergyTWGlobal total installed power capacity7-8 km5-7 km3-5 kmOver 2200 TWThe Future of Geothermal Energy Chapter 2 PAG

155、E|46 IEA.CC BY 4.0.Global geothermal potential for electricity generation using EGS technologies Source:Project InnerSpaceTM calculations for EGSs based on GeoMapTM data.The Future of Geothermal Energy Chapter 2 PAGE|47 IEA.CC BY 4.0.Almost one-fifth(115 TW)of EGS power potential is in Africa,which

156、also has the largest untapped conventional geothermal potential.In fact,even tapping less than 1%of this potential would meet Africas electricity needs in 2050 in all IEA scenarios.As a country,the United States is assessed to have the worlds largest technical enhanced geothermal capacity potential,

157、with about one-eighth of the global total(over 70 TW).Even at a depth of 5 km,US technical potential is over 7 TW,seven times more than the countrys total installed power capacity today.China has the second-largest potential,accounting for almost 8%(50 TW)of the global total.The Chinese government h

158、as identified the provinces of Hainan,Guangdong and Fujian as potential enhanced geothermal sites owing to their favourable geological conditions.Technical potential for EGS electricity capacity by depth in selected countries/regions Note:ASEAN=Association of Southeast Asian Nations.Source:Project I

159、nnerSpaceTM calculations for EGSs based on GeoMapTM data with a threshold of USD 300/MWh.Spl ASEAN countries together represent about 15%(125 TW)of the global technical potential for EGS power generation,with Indonesia and the Philippines in the lead.Meanwhile,Europe,where several countries have bee

160、n conducting EGS research and demonstrations since the 1970s,accounts for less than 5%(40 TW)of global potential but this already represents 35 times Europes current total installed electricity capacity.In India,potential for conventional geothermal is highly limited;however,at a depth of 5 km the c

161、ountrys potential grows considerably to around 14 TW.Within Gujarat State,the eastern coast of Andhra Pradesh and the central Son Narmada Fault Zone are among the key areas for geothermal power generation development.0 20 40 60 80 100 120 140AfricaCentral and South AmericaUnited StatesEurasiaASEANCh

162、inaEuropeMiddle EastAustrali and New ZealandMexicoTrkiyeJapanTW0.5-3 km3-5 km5-7 km7-8 kmThe Future of Geothermal Energy Chapter 2 PAGE|48 IEA.CC BY 4.0.Heat potential The amount of heat that can be extracted globally from sedimentary aquifers 0.5-5 km deep,at temperatures greater than 90C using adv

163、anced techniques and at a levelised cost of less than USD 50/MWh,is estimated at more than 250 000 EJ equivalent to an average heat flow of 320 TW sustained for 25 years.The 90C temperature threshold reflects the requirements of most current fossil fuel-fired district heating networks,which could be

164、 decarbonised by switching to geothermal heat using existing network infrastructure.However,for new high-efficiency district heating networks that operate at lower temperatures(5kmThe Future of Geothermal Energy Chapter 3 PAGE|63 IEA.CC BY 4.0.Earths subsurface.Both conventional and next-generation

165、geothermal projects depend on highly specialised systems and equipment to manage the high-pressure high-temperature environments required to generate sufficient geothermal power and heat outputs.Regarding operations,many techniques to optimise geothermal output,monitor facility integrity,improve saf

166、ety and repeatability,and intervene in well underperformance are built on practices from oil and gas operations.The stringent health,safety and environmental management practices of the oil and gas industry,as well as its design and engineering principles,would also be of great benefit to next-gener

167、ation geothermal projects.The industry is also well placed to participate in the research and development needed to develop next-generation materials,chemicals and stimulation techniques.Overview of oil and gas and geothermal industry synergies IEA.CC BY 4.0.The Future of Geothermal Energy Chapter 3

168、 PAGE|64 IEA.CC BY 4.0.Some of the largest overlaps between the skills and expertise of the oil and gas industry and geothermal projects apply to project evaluation,planning and management;drilling and completion;surface facility construction and maintenance;and operations and production monitoring.

169、After examining all investment components involved in these stages in detail,we estimate that an average of around two-thirds of every dollar invested in conventional geothermal operations has a significant overlap with the oil and gas industry.For next-generation geothermal technologies,we estimate

170、 that more than three-quarters of the required investment is closely related to oil and gas industry skills and expertise.Shares of conventional and next-generation geothermal technology investments that overlap with oil and gas industry skills and expertise IEA.CC BY 4.0.Notes:EGS=enhanced geotherm

171、al system.AGS=advanced geothermal system.Sources:IEA analysis based on NREL,IRENA and EGEC reports and publicly available research papers.Evaluation,planning and management The ability to understand and develop subsurface resources underpins all oil and gas and operations.In both industries,project

172、evaluation begins with geological and geophysical studies to assess resource availability and viability.Oil and gas projects rely on seismic surveys,borehole logging,coring and testing and reservoir simulations.Geothermal projects use similar techniques,including thermal gradient and resistivity sur

173、veys to estimate subsurface temperatures.In each case,the evaluation phase is critical to determine potential economic returns on investments over the lifetime of projects,which shapes project planning and helps mitigate risks tied to exploration and drilling.Additionally,project planning and manage

174、ment in both industries draw on comparable technical expertise and infrastructure.Project management 12%57%7%24%EGS12%40%11%37%ConventionalEvaluation,planning and managementDrilling and completionsSurface facilitiesPower plants and transmission7%65%11%18%AGSThe Future of Geothermal Energy Chapter 3

175、PAGE|65 IEA.CC BY 4.0.challenges,such as permitting,environmental impact assessments and stakeholder engagement,are also similar in both sectors.Drilling and completions The depth and complexity of subsurface operations for both oil and gas and geothermal operations vary depending on geological cond

176、itions and the technologies chosen.Conventional geothermal projects typically target shallower zones than conventional oil and gas ventures do.In contrast,EGSs and AGSs require deeper wells and larger boreholes,and are often drilled into harder rock,requiring more advanced drilling techniques.EGSs a

177、lso make use of techniques adapted from the well stimulation and directional drilling programmes refined by the tight oil and shale gas industry.In the drilling phase of geothermal projects,oil and gas expertise could be leveraged in many areas.For example,improved surface and downhole data collecti

178、on could reduce drilling times,increase drill bit life,and improve penetration rates.Better design and retention of drilling muds could improve the efficiency of drilling operations and enhance wellbore stability in geothermal projects.Expertise in reservoir evaluation techniques possibly assisted b

179、y artificial intelligence tools including geological and reservoir modelling,real-time wellbore measurements,pressure testing and fluid sampling,would strengthen geothermal assessments and decision making.Nevertheless,there are also some differences between geothermal and oil and gas operations.Wher

180、eas most conventional geothermal and EGS energy production methods require constant fluid reinjection to dispose of produced fluids while maintaining reservoir pressure and fluid circulation,a similar process is used in only some,but not all,oil and gas developments.While oil and gas wells are typic

181、ally at their most productive during the first few years of their lifetime before flow rates deteriorate,geothermal wells are expected to operate continuously at a consistently high rate for their 20-to 30-year lifetime,while retaining their integrity.Furthermore,deeper geothermal wells are subject

182、to prolonged high temperatures and sometimes corrosive fluids,so equipment must be made of specialised corrosion-resistant materials.Geothermal projects may also require specially designed drill bits that are robust enough to open wider boreholes on very hard and hot rocks;oil and gas operations oft

183、en also involve high-pressure conditions,but not always sustained high temperatures.High temperatures are particularly challenging for electronics,wireline logging tools and directional drilling equipment.The Future of Geothermal Energy Chapter 3 PAGE|66 IEA.CC BY 4.0.Surface facilities and ongoing

184、operations Much of the surface-level infrastructure employed by the oil and gas industry could also be used or repurposed for the geothermal industry.For instance,equipment such as pumps,well pads,heat exchangers,separators,cooling systems and control software are all needed for both industries.Pipe

185、line and fluid-handling systems are also common to both sectors.For both oil and gas as well as for geothermal,continuous monitoring of wells helps optimise energy output and prevent resource depletion or environmental impacts such as land subsidence or thermal pollution.Maintenance schedules,perfor

186、mance tracking and periodic well reinjection are also necessary to ensure the resources longevity and maintain environmental compliance.Proper management is essential to maximise a projects lifespan and adapt to any changes in subsurface conditions over time.Some factors related to operational safet

187、y are also common to both industries,although their degree of importance varies due to the different physical and chemical conditions of the operations.All drilling procedures create exposure to multiple risks and hazards,including dangerous fluids,high pressures and equipment degradation.The oil an

188、d gas industry also handles flammable hydrocarbons,which necessitates well-defined and rigorously enforced regulations governing site operations.Whereas geothermal operations mostly involve water and steam rather than hydrocarbons,the fluids may nonetheless contain dissolved acids and ions,which may

189、 pose health hazards and can also cause corrosion and reactions that need to be monitored and managed.Leveraging oil and gas industry expertise to reduce geothermal costs Current costs of geothermal technologies The cost of providing district heating through conventional geothermal installations is

190、currently close to USD 3 000/kW.However,EGS costs of up to USD 15 000/kW in 2024 are already significantly lower than in recent years thanks to the wider adoption of drilling and completion techniques honed by the oil and gas industry.EGS and AGS cost ranges are wide because the expense of drilling

191、a geothermal well is highly dependent on location and subsurface characteristics,and the availability of skilled workers and materials.Lateral length,hole and pipe diameters and the need for specialised casing or drill bit technologies can change the overall cost of a single well dramatically(for ex

192、ample,needing to use higher-grade alloys that can withstand corrosive media for an extended period can The Future of Geothermal Energy Chapter 3 PAGE|67 IEA.CC BY 4.0.increase a drilling programmes capital expenditures).Specialised inhibition chemicals may also be required,adding to operating costs.

193、Another key parameter is drilling depth.The number of geothermal wells drilled to date is a very small fraction of total shale wells(which number in the hundreds of thousands),but it is nonetheless informative to compare published cost estimates for both.At depths of up to 2 000 metres,we estimate t

194、hat currently geothermal wells can cost around 40%more than an average shale gas well.At depths beyond 2 000 metres,however,geothermal wells appear to fall within the relatively wide cost range of shale gas wells.Well drilling and completion costs by drilling depth,enhanced geothermal vs shale gas i

195、n the United States IEA.CC BY 4.0.Sources:IEA analysis based on data from Rystad and NREL.Potential cost reductions Applying existing oil and gas technologies and services more widely could significantly reduce the overall cost of deploying geothermal technologies.Building on existing work,we have e

196、stimated potential conventional-geothermal and EGS costs savings by modelling reductions achieved by using oil and gas technologies,practices and lessons learned across various project phases(from evaluation and planning through drilling).Our estimates include spillover benefits from the direct adop

197、tion of current oil and gas technologies;economies of scale achieved by applying existing oil and gas practices;and application of the industrys extensive research and development capabilities to geothermal developments.We examine two scenarios:the first involves the full transfer of oil and gas kno

198、wledge and practices,and the second is based on a low level of knowledge transfer,characterised by less systematic application of these opportunities as well as longer implementation times.2 4 6 8 10 5001 0001 5002 0003 0003 5004 000Million USD(2023,MER)MetresRange for shale wellsShale meanGeotherma

199、l-higher estimateGeothermal-lower estimateThe Future of Geothermal Energy Chapter 3 PAGE|68 IEA.CC BY 4.0.For conventional geothermal systems,we estimate that applying a high number of practices from oil and gas operations during the evaluation and planning phases could reduce costs by nearly 15%.Sc

200、aling up surface practices through modular repetitive design and improving drilling efficiencies through the widespread application of oil and gas technologies could provide a further 35%reduction in costs.Conventional geothermal cost reductions from the transfer of oil and gas industry expertise IE

201、A.CC BY 4.0.Sources:IEA analysis based on data from NREL SAM tool for EGSs;IRENA and EGEC reports;and publicly available research papers.For EGSs,widespread knowledge transfer from the oil and gas industry as well as additional research support to acquire and improve reservoir data,processing and mo

202、delling during the evaluation and planning stages of geothermal projects could reduce costs by around 10%.During drilling and completions,the extensive use of practices that are now standard in tight oil and gas reservoir development could reduce costs by 20%and scaling up the use of multi-pad well

203、designs could reduce them a further 10%.Furthermore,researching and developing the use of new equipment and working fluids could reduce costs an additional 30%.0 8001 6002 4003 2002023Cost reductionsReduced costsUSD(2023,MER)per kWLow level of transferEvaluation and planningDrilling and completionsS

204、urface facilities2023Cost reductionsReduced costsHigh level of transferThe Future of Geothermal Energy Chapter 3 PAGE|69 IEA.CC BY 4.0.Enhanced-geothermal cost reductions from the transfer of oil and gas industry expertise IEA.CC BY 4.0.Sources:IEA analysis based on data from NREL SAM tool for EGSs;

205、IRENA and EGEC reports;and publicly available research papers.In total,we estimate that a high level of knowledge transfer and productivity gains from the oil and gas industry could reduce conventional-geothermal technology costs by up to 50%and next-generation costs by nearly 80%.This would make ne

206、xt-generation technologies cost-competitive and would be a key factor in future growth(see Chapter 4).Repurposing oil and gas wells for geothermal energy production There is an opportunity for oil and gas wells that have been abandoned,are underperforming,or are nearing the end of their technical li

207、fetime to be repurposed to generate geothermal energy.Doing this would allow developers to use existing infrastructure and past data from seismic surveys and downhole measurements to avoid some drilling and completion costs,help derisk geothermal projects,and improve success rates.Indeed,a number of

208、 pilot projects have already demonstrated the feasibility of repurposing oil and gas wells in this way.For example,in 2020 GreenFire Energy retrofitted an existing oilwell in United States,in 2021 MS Energy Solutions converted an abandoned oilwell to geothermal operations in Hungary,and in 2023 Cera

209、Phi converted an abandoned gas well to geothermal operations in the United Kingdom.Whether oil and gas wells are suitable for repurposing in this way depends on the availability of sustained and large heat gradients;sufficient flowrates;proximity to demand centres;and a flexible permitting system th

210、at allows an oil and gas 04 0008 00012 00016 0002023Cost reductionsReduced costsUSD(2023,MER)per kWLow level of transferEvaluation and planningDrilling and completionsSurface facilities2023Cost reductionsReduced costsHigh level of transferSpilloverEconomies of scaleResearchThe Future of Geothermal E

211、nergy Chapter 3 PAGE|70 IEA.CC BY 4.0.licence to be converted to geothermal operations.There is also a need to ensure the ongoing integrity of old wells,which may be subject to lifetime durability challenges under new flow regimes and chemistries,in addition to corrosion,erosion and scaling problems

212、.Another issue is that workover costs e.g.to restimulate a well are often relatively high.Furthermore,it is important that normal abandonment protocols are not bypassed when oil and gas wells are converted to geothermal energy production.This means that wells still need to be properly sealed and dec

213、ommissioned to prevent methane leaks and respect environmental standards.Skill development and implications for workers Transferability of todays workforce The oil and gas industry currently employs about 12 million workers globally much more than the geothermal industry,which provides around 145 00

214、0 jobs.In the oil and gas sector,employment ranges from professions such as geoscientists and engineers measuring and modelling the occurrence of hydrocarbons and how they can be economically produced,processed and sold,to tradespeople who perform drilling operations and work in refineries and gas f

215、acilities,to functional workers with roles in health and safety,the supply chain,and research and engineering.Among these positions,the majority of current oil and gas workers have skillsets that could transfer directly to the geothermal sector,bolstered by supplementary training and familiarisation

216、 with the different health,safety and environmental risk profiles associated with geothermal operations.As the world transitions to clean energy sources,projected production declines heavily influence IEA outlooks for oil and gas employment.In the Stated Policies Scenario(STEPS),oil and gas sector e

217、mployment remains broadly constant to 2030,with a 5%increase in emerging markets and developing economies largely offset by a 10%decrease in advanced economies.In the Announced Pledges Scenario(APS),global employment in the oil and gas industry falls more than 15%(by almost 2 million workers)by 2030

218、,and in the Net Zero Emissions by 2050(NZE)Scenario it falls more than 30%(by just under 4 million workers).Thus,whether due to their concerns over career security or a deliberate choice to support clean energy technologies,an increasing number of mid-career oil and gas workers are seeking opportuni

219、ties to transition to alternative sectors,even though these sectors sometimes offer lower levels of remuneration.The possibility The Future of Geothermal Energy Chapter 3 PAGE|71 IEA.CC BY 4.0.of working on geothermal projects is therefore an important option for these workers to continue using thei

220、r experience and expertise.In the STEPS,employment associated with conventional geothermal power development and operations increases by almost 30%globally by 2030,to just under 185 000 workers.Employment growth accelerates even further in other scenarios,increasing by 90%(to over 270 000 workers)in

221、 the APS during this period and more than tripling in the NZE Scenario,to over 470 000 workers.The potential is even greater in an upside case that includes next-generation geothermal development for electricity and heat production,representing 700 000 additional jobs by 2030(see the low-cost case i

222、n Chapter 4).Combined,total geothermal employment could reach 1 million jobs by 2030 in the APS.As a result,we estimate that about 40%of the employees dismissed from the oil and gas workforce in the APS by 2030 could transition to the geothermal sector.Total oil and gas and geothermal employment cha

223、nges by scenario,2023-2030 IEA.CC BY 4.0.Notes:STEPS=Stated Policies Scenario.APS=Announced Pledges Scenario.NZE=Net Zero Emissions by 2050 Scenario.Strengthening the geothermal talent pool Future geothermal development will hinge on having a skilled,appropriately sized workforce in place.In the pas

224、t,the geothermal sector has already benefited from an influx of well-experienced professionals from the oil and gas sector,including geologists;well,reservoir and petroleum engineers;and specialised tradespeople trained and practised in rig operations.The similarities among these disciplines have ma

225、de it possible for the geothermal sector to leverage the learning and expertise gained in the oil and gas industry from decades of operation.-4-3-2-101STEPSAPSNZESTEPSAPSNZEAPS low-costcaseMillion workersOil and gasConventional geothermalNext-generationgeothermalThe Future of Geothermal Energy Chapt

226、er 3 PAGE|72 IEA.CC BY 4.0.There are clearly significant overlaps in the worker skills required in the oil and gas industry and those needed in geothermal energy.From conducting seismic surveys to evaluating prospects,modelling flow dynamics and preventing corrosion,geothermal operations demand a ro

227、bust technical foundation often acquired through degree programmes traditionally associated with the fossil fuel industry(e.g.Petroleum Engineering;Geophysics;Geology;and Earth Sciences).Petroleum engineering programmes are available globally,with over 100 offered.In the United States,more than 30 u

228、niversities provide petroleum engineering degrees,but there are fewer dedicated geothermal engineering programmes.Iceland offers some specialised geothermal studies,but elsewhere geothermal courses tend to be embedded within civil,mechanical or environmental engineering departments rather than offer

229、ed as independent degree tracks.Enrolments in degree programmes traditionally associated with the fossil fuel industry are on an upward trend in producer economies(such as Saudi Arabia)and in countries where geothermal energy is already a recognised contributor to the national energy mix(e.g.Indones

230、ia and Trkiye).Since around 2015,however,enrolments have fallen in a number of advanced economies,including the United States,the United Kingdom and the Netherlands,with declines of 25-80%.Several factors are responsible for this trend,particularly anticipated lower demand by oil and gas companies f

231、or programme graduates.Climate change concerns are also growing,as is student activism protesting degrees linked to oil and gas operations.Without careful attention,this shift could have knock-on implications for the availability of skilled workers for clean energy development including geothermal t

232、hat rely on similar technical and specialised knowledge.There is great potential for the oil and gas sector to support university degrees,apprenticeships,training programmes,and regional and international centres of excellence more extensively.Setting a precedent for such partnerships is the recentl

233、y announced Fervo Energy,Southern Utah University and Elemental Impact Geothermal Apprenticeship Program,which aims to help oil and gas workers transition into the expanding geothermal sector(e.g.60%of Fervo Energy staff are former oil and gas workers).The US Department of Energy USD 165-million Geo

234、thermal Energy from Oil and Gas Demonstrated Engineering(GEODE)initiative also aims to brings oil and gas skills and engineering experience into the geothermal sector.The Future of Geothermal Energy Chapter 3 PAGE|73 IEA.CC BY 4.0.Enrolment in degree programmes that provide essential geothermal sect

235、or skills,2016-2023,and skillset overlaps between geothermal and oil and gas engineers IEA.CC BY 4.0.Notes:KFU=King Faid University.BTI=Bandung Technology Institute.ITU=Istanbul Technical University.DUT=Delft University of Technology.Imperial=Imperial College London.CoM=Colorado School of Mines.Sour

236、ces:Left:IEA analysis based on university enrolment data and survey data collected by Lloyd Heinze for Petroleum Engineering and similar degree programmes.Right:IEA analysis based on SPE competency matrices;Okoroafor,E.R.,C.P.Offor and E.I.Prince(2022),Mapping Relevant Petroleum Engineering Skillset

237、s for the Transition to Renewable Energy and Sustainable Energy.Competency level:2=Awareness;4=Knowledge;6=Skill;8=Expertise.Oil and gas and geothermal project financing Geothermal projects require substantial upfront capital investment,typically financed through a combination of equity,debt,governm

238、ent grants and funds(e.g.the European Regional Development Fund and the Just Transition Fund)and tax incentives(e.g.the US Inflation Reduction Act).However,barriers to debt financing are often considerable due to early-stage exploration risks and the specialised nature of these ventures.Successful u

239、ndertakings often use project financing,wherein a loan is secured against the projects future cash flows rather than the developers balance sheet.This model requires a stable revenue stream,which is typically ensured through long-term power purchase agreements(PPAs)signed with offtakers.Joint ventur

240、es have been a common strategy for oil and gas companies to enter the geothermal market,allowing them to provide part of the financing and spread the risk while also supplying both technical expertise and drilling equipment.Another entry method that can address corporate sustainability targets while

241、 allowing companies to retain full or majority ownership is the direct funding of geothermal projects through equity investments,including through corporate venture capital spending or capital allocated to renewable or low-carbon energy divisions.0 50 100 150 200 2502016201820202022Index(2016=100)St

242、udent enrolment in oil and gas-related degreesSaudi Arabia(KFU)Indonesia(BTI)Trkiye(ITU)Netherlands(TUD)United Kingdom(Imperial)United States(CoM)012345678Surface productionWell productionReservoir engineeringFormation evalutionGeoscienceDrilling competenciesSkillset overlapGeothermal engineerOil an

243、d gas engineerCompetency levelThe Future of Geothermal Energy Chapter 3 PAGE|74 IEA.CC BY 4.0.Diversification into geothermal energy would also present oil and gas companies with an opportunity for long-term growth in clean energy and offer a hedge against volatility in oil and gas demand and prices

244、.Nevertheless,there are differences in the nature of oil and gas and geothermal ventures and expected returns.Oil and gas projects are often characterised by high and volatile returns,with companies looking to convert production into cash flows as quickly as possible.In contrast,geothermal projects

245、with fixed offtakers are expected to pay back investments over a longer period of time with lower,but typically more stable,cash flows.Geothermal projects also tend to be much smaller than new oil and gas developments,limiting the opportunities to standardise,replicate and scale up,and this may disc

246、ourage oil and gas companies from committing capital to them.The oil and gas industry can help lower the cost of capital for risky geothermal projects by leveraging its presence in credit and debt markets,including by creating partnerships with commercial banks,issuing bonds or raising capital throu

247、gh other traditional means.Ultimately,it is a balancing act for oil and gas enterprises to increase their financial commitments to the geothermal industry,as many traditional investors still expect these companies to provide high returns and may consider geothermal heat and electricity production to

248、 be too far outside their core competencies.Similarly,in the clean energy financing sphere,investors may regard oil and gas industry participation in geothermal projects with scepticism.Reconciling these differences is crucial to unlock more financial partnerships between stakeholders.The Future of

249、Geothermal Energy Chapter 4 PAGE|75 IEA.CC BY 4.0.Chapter 4:Next-generation geothermal market potential Overview Introducing innovative technologies could create opportunities for next-generation geothermal energy all around the world.As nearly all countries possess geothermal resources,reducing the

250、 technology costs of advanced geothermal systems(AGSs)and enhanced geothermal systems(EGSs)could make it possible to tap into the enormous technical potential of geothermal energy(see Chapter 2).Like conventional geothermal systems,next-generation technologies offer several valuable products,includi

251、ng electricity,heating and cooling,and energy storage(see Chapter 1).Geothermal energy projects can also produce various critical materials such as lithium,which can enhance the business case for new projects.Next-generation geothermal could be an affordable option to generate low-emissions electric

252、ity domestically,tackling both security and decarbonisation goals.In our detailed analysis of market opportunities,in regions with strong innovation and development support(i.e.such that it reduces technology costs up to 80%by 2035),we find global next-generation geothermal market potential of over

253、800 gigawatt(GW)of electrical capacity by 2050.We have also calculated market potential of over 10 000 petajoule(PJ)per year of heat production by 2050 for centralised heating systems(i.e.district heating)and industrial applications.Market potential for next-generation geothermal power capacity and

254、industrial heat by region,2025-2050 IEA.CC BY 4.0.Spl 0 200 400 600 800202520302035204020452050GWChinaUnited StatesIndiaSoutheast AsiaEuropeRest of worldInstalled capacity02 5005 0007 50010 00020352050PJIndustrial heatThe Future of Geothermal Energy Chapter 4 PAGE|76 IEA.CC BY 4.0.On the pathway tow

255、ards fulfilling country plans,targets and pledges,next-generation geothermal could deliver up to 15%of total electricity generation growth to 2050,though solar PV and wind would remain by far the largest sources of growth.This innovative technology could also ease pressure on developers attempting t

256、o realise the limited resource potential of other dispatchable clean energy technologies such as hydropower and bioenergy.Next-generation geothermal could also compete with nuclear power and concentrating solar power(CSP)as well as solar PV and wind,reducing the need for battery storage and offering

257、 opportunities for more balanced clean energy transitions.For heat use,next-generation geothermal energy could replace fossil fuel-based heat generation in combined heat and power plants or boilers,while heat pumps are a key competing technology in cleaner energy systems.We find that global market p

258、otential for next-generation geothermal is concentrated among just a few large markets,with China,the United States and India accounting for almost three-quarters.Due to its high degree of electrification and strong reliance on coal,China is the country that most needs to expand its clean energy sec

259、tor to meet its goal of carbon neutrality by 2060.China is already on track to deploy huge amounts of solar PV and wind energy,but clean dispatchable power capacity needs to increase by nearly 650 GW over the next 25 years to maintain electricity security,of which close to half could be geothermal.A

260、dditionally,geothermal energy could meet a significant share of heating demand in buildings,through district heating systems and low-and medium-temperature processes in industry.The United States is the second-largest market for next-generation geothermal technologies due to several factors:its clea

261、n energy transition is under way;it has high-quality geothermal resources;and it is a leader in geothermal innovation.In India in addition to rapid solar PV growth new clean dispatchable power capacity is needed to meet rising demand at all times and to avoid the construction of new coal-fired power

262、 plants.Market potential is also significant in other regions including Southeast Asia,where rising incomes and economic development are rapidly raising energy demand.In Europe,clean energy transitions are in advanced stages,with a growing need for more dispatchable clean technologies to complement

263、large volumes of wind and solar PV.Next-generation geothermal could also play a significant role in Japan,which has high-quality resources and significant opportunities to cut fossil fuel imports and enhance its energy independence.Countries in Africa(e.g.Tanzania and Kenya)could also benefit from d

264、eveloping their high-quality resources to generate baseload low-emissions electricity.The Future of Geothermal Energy Chapter 4 PAGE|77 IEA.CC BY 4.0.Market potential for next-generation geothermal,2025-2050 IEA.CC BY 4.0.Note:CHP=combined heat and power.Spl To fully develop next-generation geotherm

265、al market potential,total global investments would have to exceed USD 1 trillion by 2035 and USD 2.8 trillion by 2050.About 75%of the total would be invested in facilities to generate electricity.At its peak,annual next-generation geothermal investment nears USD 200 billion around 2035,when clean te

266、chnology deployment is at full speed.This amount is equivalent to one quarter of todays total annual investment in clean electricity technologies.With this investment,next-generation geothermal systems could provide up to 8%of the global electricity supply by 2050.The remaining portion of the invest

267、ment,totalling over USD 700 billion,would be allocated to new next-generation geothermal facilities to produce heat,accounting for 4%of centralised heat and 9%of heat in industry.Next-generation geothermal for electricity Significant clean-technology opportunities emerge as the electricity sector pa

268、ves the way to clean and secure energy transitions Global electricity demand is set to increase at six times the pace of total energy demand over the next decade,heralding a new age of electricity,as highlighted in World Energy Outlook 2024.One-third of this growth comes from China,although electric

269、ity demand is set to increase in all regions and will accelerate further in upcoming years thanks to growth in end-use electrification(e.g.electric vehicles and heat pumps)and rising industry,data centre and artificial intelligence(AI)consumption.By 2050,the share of electricity in final consumption

270、 reaches 40%0 6001 2001 8002 4003 000202520302035204020452050Billion USD(2023,MER)Electricity onlyIndustrial heatCHPCumulative investments0%2%4%6%8%10%203020402050ElectricityIndustrial heatCentralised heatShare of total supplyThe Future of Geothermal Energy Chapter 4 PAGE|78 IEA.CC BY 4.0.in the Ann

271、ounced Pledges Scenario(APS)to fulfil country-level plans,targets and pledges on time,and to over 50%in the Net Zero Emissions by 2050(NZE)Scenario.Electricity demand and low-emissions investments,2020-2050 IEA.CC BY 4.0.Notes:MER=market exchange rate.APS=Announced Pledges Scenario.NZE=Net Zero Emis

272、sions by 2050 Scenario.Source:IEA(2024),World Energy Outlook 2024.l As shown in the APS trajectory,low-emissions technology deployment is ramping up quickly to keep pace with electricity demand growth and replace fossil fuels as countries work to fulfil their plans,targets and pledges on time.Howeve

273、r,clean-electricity uptake would have to be even quicker to meet NZE Scenario aims.In 2050 in the APS,over 90%of total electricity is generated from low-emissions energy sources,while in the NZE Scenario the power sector is fully decarbonised.To achieve this transition,investments in clean technolog

274、ies must increase rapidly,from just over USD 700 billion in 2023 to USD 1.6 trillion in 2030.Cumulative investments rise to USD 20 trillion by 2035 and USD 35 trillion by 2050 in the APS,with the NZE Scenario totalling USD 40 trillion by 2050.As electricity systems expand to meet climate targets and

275、 ensure continued energy security,they will continue to rely on a suite of technologies.While solar PV and wind lead the way in clean energy transitions,a diverse set of resources that includes low-emissions dispatchable technologies such as geothermal,nuclear and bioenergy along with energy storage

276、 will be the basis of resilient electricity systems.Some of the challenges to be faced are demand fluctuations,extreme weather events,irregular weather patterns,geopolitical tensions and supply chain risks.Recent technological advances in next-generation geothermal innovations,as detailed in Chapter

277、 2,could create new market opportunities for the technology if its costs can become competitive with other low-emissions technologies.020 00040 00060 00080 000100 0002020203020402050TWhAPS totalAPS low-emissionsNZE totalElectricity demand0 10 20 30 40 502020203020402050Trillion USD(2023,MER)APSNZECu

278、mulative low-emissions investmentsThe Future of Geothermal Energy Chapter 4 PAGE|79 IEA.CC BY 4.0.Next-generation geothermal electricity costs Construction costs and the levelised cost of electricity To unlock next-generation geothermal market potential for electricity generation,innovation and proc

279、ess improvements will be needed to reduce costs significantly.Minimising construction costs will be critical,especially by reducing subsurface expenses namely for drilling which today constitute an estimated 60-80%of the total,including for the power plant and all other infrastructure(see Chapter 4)

280、.These and other costs may be reduced partly by capitalising on synergies with the oil and gas industry,as many aspects of drilling operations,the supply chain and plant-sizing scalability are interrelated.Today,the scope of construction costs for next-generation geothermal developments is broad,wit

281、h only a handful of pilot projects online and the first commercial sites set to begin operations in the next few years(see Chapter 2).Differences not only in the depth and temperature of projects,but also in technology,lead to a wide range of expected costs.Estimated costs for first-of-a-kind EGS pr

282、ojects are in the order of USD 14 000 per kilowatt(kW),though applying the learning-by-doing principle can help reduce costs quickly.Compared with AGSs,it is easier to estimate costs for EGSs because they rely on fewer technological advances and multiple pilot projects have already been launched,whe

283、reas AGSs are even newer.Strong and continuous support for next-generation geothermal innovation and development could drive construction costs down by as much as 80%by 2035,as represented in our low-cost case.However,when the transfer of experience from oil and gas activities proves more difficult,

284、cost reductions could be somewhat slower,represented by our medium-cost case.In both cases,construction costs for next-generation geothermal plants would be in the range of USD 3 000-7 000/kW by 2035.With additional reductions stemming from the learning-by-doing principle,the range of construction c

285、osts falls to USD 2 000-5 000/kW in 2050.In absolute cost terms,for a 300-MW project at a depth of 3 km and temperature of 200C,the total capital investment in 2035 would fall from over USD 4 billion for first-of-a-kind projects to USD 2 billion in the medium-cost case and USD 1 billion in the low-c

286、ost case.Even at the lower end of this range,drilling costs would represent around USD 600 million.By 2050,the total capital expenditure for a 300-MW next-generation geothermal project would be USD 1.2 billion in the medium-cost case and USD 600 million in the low-cost case.The Future of Geothermal

287、Energy Chapter 4 PAGE|80 IEA.CC BY 4.0.Assumed average next-generation geothermal construction costs,2025-2050 IEA.CC BY 4.0.Notes:MER=market exchange rate.Costs shown are for projects with an average size of 300 MW;depth of 3 km;temperature of 200C in suitable conditions.Spl The levelised cost of e

288、lectricity(LCOE)is a common metric of power technology costs,as it aggregates all direct costs associated with a technology into a single value,representing the average cost of producing each unit of electricity over the technologys lifetime.It includes capital costs,operations and maintenance costs

289、,fuel costs,carbon costs and decommissioning costs.The extent to which each of these factors affects the LCOE varies significantly between technologies and across countries.For geothermal projects,which have no fuel or carbon costs(an advantage over fossil fuel-based power plants),construction and f

290、inancing costs are the most consequential for LCOE.Furthermore,the absence of critical mineral requirements for geothermal developments also shields projects from associated potential market volatility.The LCOE is often used to evaluate the competitiveness of various power generation technologies,th

291、ough it is not always a reliable metric for comparison(see box below on value-adjusted LCOE VALCOE).The LCOE of first-of-a-kind next-generation geothermal projects is over USD 230 per megawatt-hour(MWh).However,with the construction cost reductions described,the LCOE of next-generation geothermal in

292、 the low-cost case would decline to about USD 50/MWh in 2035 and USD 30/MWh in 2050.In the medium-cost case,the LCOE declines to USD 120/MWh in 2035 and USD 70/MWh in 2050.In all cases,the average financing rate or weighted average cost of capital(WACC)is assumed to be 7%in real,pre-tax terms.Becaus

293、e geothermal developments are capital-intensive,the LCOE is sensitive to financing conditions and modes of operation(see box below on how capital costs and plant flexibility affect the LCOE).03 0006 0009 00012 00015 000202520302035204020452050USD per kW(2023,MER)Medium-costLow-costThe Future of Geot

294、hermal Energy Chapter 4 PAGE|81 IEA.CC BY 4.0.Next-generation geothermal LCOE ranges in the Announced Pledges Scenario,2025-2050 IEA.CC BY 4.0.Notes:MER=market exchange rate.O&M=operations and maintenance.Costs shown are for projects operating at an 80%capacity factor and a WACC of 7%.“Drilling cost

295、s”and“other capital costs”include both construction and financing costs.Spl Geothermal LCOE sensitivity to construction costs,capacity factors and financing rates In the average generation cost(the LCOE)of next-generation geothermal plants,upfront construction costs are the most important factor,fol

296、lowed by financing costs and how the plant is operated.The lowest LCOE is achieved when construction costs and financing rates are minimal and the capacity factor(i.e.the average output over a period relative to continuous operations at maximum capacity)is high.For example,the LCOE of next-generatio

297、n geothermal in the low-cost case in 2035 could be as low as USD 40/MWh with affordable financing and a very high capacity factor of 90%.Conversely,the LCOE could be twice as high if the construction costs remain the same but financing rates are higher and operations are more flexible,with a capacit

298、y factor closer to 60%.If construction costs are low enough,plants may be able to run more flexibly at lower capacity factors,but at higher capital costs they may need to run as baseload plants with a high capacity factor.The low-cost case for next-generation geothermal can unlock more flexible oper

299、ations without raising the LCOE to an unattractive level:even with a 60%capacity factor and WACC of 10%,the LCOE remains well below USD 100/MWh.In contrast,the LCOE in the medium-cost case increases more significantly with higher financing costs,and more rapidly as the capacity factor declines.0 50

300、100 150 200 250Low-costMedium-costLow-costMedium-cost202520352050USD per MWh(2023,MER)O&MOther capital costsDrilling costsThe Future of Geothermal Energy Chapter 4 PAGE|82 IEA.CC BY 4.0.Next-generation geothermal LCOE by construction cost,capacity factor and WACC IEA.CC BY 4.0.Notes:MER=market excha

301、nge rate.WACC=weighted average cost of capital.USD 7 000/kW is the medium-cost case in 2035;USD 3 000/kW is the low-cost case in 2035.Next-generation geothermal competitiveness When evaluating the competitiveness of different power generation technologies,it is important to assess both the technolog

302、y costs and the value of the technology to the system.From a system perspective,this provides a more reliable indicator of overall electricity affordability.For investors,recognising the technologys full value in the market means profitability.Dispatchable technologies with similar capacity factors

303、have broadly comparable value to power systems,providing energy,capacity and flexibility services,so the LCOE alone can be a useful indicator of competitiveness among these technologies.However,because the LCOE takes no account of power system impacts and interactions,it is not a reliable indicator

304、of competitiveness when comparing technologies with very different operational characteristics,notably in the case of dispatchable and variable renewables.The IEA has therefore developed the value-adjusted LCOE(VALCOE).0 50 100 150 20060%65%70%75%80%85%90%USD per MWh(2023,MER)7 000 USD/kW3 000 USD/k

305、WSeries910%5%Construction costsWACCThe Future of Geothermal Energy Chapter 4 PAGE|83 IEA.CC BY 4.0.The value-adjusted LCOE is a more robust metric of competitiveness To better account for the differences in value that technologies provide to the power system an aspect not covered in the LCOE the IEA

306、 developed and uses the VALCOE,a more comprehensive measure of competitiveness that combines the technology cost(LCOE)with the value of three system services(energy,flexibility and capacity),drawing on detailed hourly modelling of electricity demand and supply.Each power system is unique,defined by

307、many characteristics including demand patterns,the supply mix and the share of renewables.As solar PV and wind shares continue to rise,the value of energy provided by these sources tends to decrease in relation to the system average,and the value of flexibility tends to increase.Both trends undersco

308、re the importance of looking beyond the LCOE to determine competitiveness.VALCOE and LCOE of solar PV and solar PV plus battery storage IEA.CC BY 4.0.Notes:MER=market exchange rate.LCOE=levelised cost of electricity.VALCOE=value-adjusted LCOE.Note:Values for projection years are based on IEA modelli

309、ng in the World Energy Outlook 2023,Announced Pledges Scenario The VALCOE also evaluates the competitiveness of energy storage,either as a stand-alone option or paired with other sources.For example,based on the VALCOE,pairing solar PV with battery storage makes it much more cost-competitive with so

310、lar PV-only in China,India and the United States.This reflects the increasing importance of generating energy at the right time and providing flexibility and capacity services to the grid.However,assessing a system based on the LCOE alone would indicate that solar PV without storage is the lower-cos

311、t choice.Pairing solar PV and battery storage is already one of most competitive options,as installed costs for both have dropped 90%in the past decade.0 20 40 60 80 100202220302022203020222030Solar PV+battery storageSolar PVSeries7Solar PV+battery storageSolar PVUSD per MWh(2022,MER)ChinaIndiaUnite

312、d StatesVALCOELCOEThe Future of Geothermal Energy Chapter 4 PAGE|84 IEA.CC BY 4.0.Next-generation geothermal competitiveness with other clean dispatchable technologies If significant construction cost reductions are realised for next-generation geothermal,it could be one of the most competitive clea

313、n dispatchable technologies.In the low-cost case,next-generation geothermal costs would be on a par with or lower than all other clean dispatchable technologies by 2035,including conventional geothermal,natural gas-fired with carbon capture,hydro,nuclear,coal with carbon capture,bioenergy,CSP and hy

314、drogen.Each technologys cost range reflects regional differences in construction expenses and in resource and fuel costs,which apply to natural gas,coal,bioenergy and hydrogen.LCOE of geothermal and other low-emissions dispatchable technologies in the Announced Pledges Scenario,2035 IEA.CC BY 4.0.No

315、tes:MER=market exchange rate.CCS=carbon capture and storage.CSP=concentrating solar power.The next-generation geothermal cost range is for projects with an 80%capacity factor and a WACC of 7%.The capacity factors of the other technologies are assumed to be 80%for conventional geothermal;60%for gas w

316、ith CCS;40%for hydro;80%for nuclear;70%for coal with CCS;60%for bioenergy;40%for CSP;and 50%for hydrogen.Spl In the medium-cost case,the LCOE of next-generation geothermal is above USD 100/MWh in 2035,which is significantly higher than the low end of costs for several other clean dispatchable option

317、s.This means that lower-cost options would include natural gas with carbon capture and hydropower,as resources are available and of good quality.Nuclear power could also be a more attractive option when projects are delivered on time and on budget.Innovation could bring more clean dispatchable sourc

318、es of electricity to the market in upcoming years,boosting competition.For example,small modular reactors(SMRs)are under development in many countries.With more than 80 designs being developed and a growing number of commitments to build new projects,the 100 200 300 400USD per MWh(2023,MER)Geotherma

319、lOther low-emissions dispatchableThe Future of Geothermal Energy Chapter 4 PAGE|85 IEA.CC BY 4.0.delivered cost of SMRs will be an important point of comparison for next-generation geothermal in the future,as both technologies could be available in most locations.The cost of other clean dispatchable

320、 technologies,including low-emissions hydrogen and ammonia,could also drop considerably and help support electricity security during clean energy transitions.Given these cost uncertainties,a portfolio approach that includes a variety of low-emissions dispatchable technologies should be taken to ensu

321、re secure energy transitions.Next-generation geothermal competitiveness with variable renewables Although making next-generation geothermal plants competitive with solar PV and wind installations would create extensive market opportunities,achieving cost-competitiveness will be challenging,as the av

322、erage utility-scale solar PV LCOE has plummeted 90%since 2010,onshore wind has dropped 70%and offshore wind has fallen 60%.As a result,solar PV and wind are the most affordable new sources of electricity in most markets today.However,as round-the-clock availability and dispatchability are key attrac

323、tions of next-generation geothermal generation but not of solar PV and wind,it is necessary to consider both the technology costs and value provided by each technology(captured in VALCOE calculations)to evaluate their relative competitiveness.Regional-level comparisons are most useful,as value depen

324、ds on many system-specific factors,including the established power plant fleet;domestic resources;fuel prices;renewable-resource quality;and electricity demand patterns.Next-generation geothermal can become competitive with solar PV and wind by 2035 in several major regions including the United Stat

325、es,Europe,and China if the low-cost case is realised,capacity factors are high,and financing costs are medium to low.Based on the VALCOE of next-generation geothermal which is similar to its LCOE because it runs at a high capacity factor and has close to the system average contribution to energy,fle

326、xibility and capacity it is more competitive than standalone solar PV and wind by 2035,as these technologies are of far lower value to systems because of the cannibalisation effect.13 This is true even with a WACC as high as 8%in several regions,which is noteworthy since financing costs for next-gen

327、eration geothermal projects are uncertain given their current stage of development.13 When the average market price(or capture price)received by a technology declines as its own share of electricity generation rises,lowering its system value.The Future of Geothermal Energy Chapter 4 PAGE|86 IEA.CC B

328、Y 4.0.Value-adjusted LCOE of next-generation geothermal and other low-emissions technologies in the Announced Pledges Scenario,2035 United States China European Union IEA.CC BY 4.0.Notes:MER=market exchange rate.WACC=weighted average cost of capital.LCOE=levelised cost of electricity.VALCOE=value-ad

329、justed LCOE.The assumed capacity factor for geothermal is 80%.LCOE and VALCOE for solar PV and wind are from the World Energy Outlook 2024 APS.The WACC assumption for solar PV and wind are 4-5%in the United States,China and the European Union.Spl 40 80 120 1603 0003 0007 0007 000Nostorage4-hourstora

330、ge8-hourstorageNostorage4-hourstorage8-hourstorageNext-generation geothermalUtility solar PVOnshore windUSD per MWh(2023,MER)LCOEVALCOEUSD/kW:WACC:4%4%8%8%40 80 120 1603 0003 0007 0007 000Nostorage4-hourstorage8-hourstorageNostorage4-hourstorage8-hourstorageNext-generation geothermalUtility solar PV

331、Onshore windUSD per MWh(2023,MER)LCOEVALCOEUSD/kW:WACC:4%4%8%8%40 80 120 1603 0003 0007 0007 000Nostorage4-hourstorage8-hourstorageNostorage4-hourstorage8-hourstorageNext-generation geothermalUtility solar PVOnshore windUSD per MWh(2023,MER)LCOEVALCOEUSD/kW:WACC:4%4%8%8%The Future of Geothermal Ener

332、gy Chapter 4 PAGE|87 IEA.CC BY 4.0.Next-generation geothermal is also competitive with solar PV and wind paired with battery storage,which explains why both its costs and system value increase when it becomes more dispatchable.Indeed,the VALCOE for next-generation geothermal is USD 40-55/MWh,and for

333、 solar PV paired with battery storage it is around USD 50-60/MWh in the United States and China,and up to USD 75/MWh in Europe.For onshore wind paired with storage,the VALCOE is around USD 45-50/MWh in the United States and China,and up to nearly USD 80/MWh in the European Union.If costs for next-generation geothermal continue to decline to 2050 within the low-and medium-cost ranges,it will be eve