# Assessment criteria and risk mitigation of hydrogeothermal energy portfolios for district heating

## TL;DR

This paper explores ways to reduce the risk and cost of using deep geothermal energy for heating by evaluating different project assessment criteria.

## Contribution

The study introduces a method to minimize exploration risk in hydrogeothermal energy projects using assessment criteria and Monte Carlo simulations.

## Key findings

- Formalized assessment criteria significantly reduce exploration risk and cost of failure.
- Combining geological and economic factors in a top-down approach improves project outcomes.
- Monte Carlo simulations help evaluate the performance of different criteria in real-world conditions.

## Abstract

In heating-intensive areas, low-to-intermediate temperature hydrogeothermal energy (depth >1500 m below ground level, temperature <200 °C) has the potential to replace fossil fuels in the heating sector. One of the biggest obstacles to the wide-spread implementation of hydrogeothermal energy is the exploration risk, the probability of finding geological conditions, which do not yield long-term economic thermal power. Here, we develop and investigate different assessment criteria of potential hydrogeothermal projects to minimize this exploration risk and the associated economic consequences in an inventory-portfolio approach. To do so, we combine a simplified inventory-portfolio approach with uncertain and spatially varying subsurface parameters and a cost model in a Monte Carlo simulation framework. We use an established hydrogeothermal energy play in SE Germany as an example and evaluate the performance of the tested assessment criteria vs. average exploration risk, total produced energy, total cost and cost of failure due to non-discoveries. Our results demonstrate that careful selection of formalized assessment criteria is key to mitigate exploration risk. We conclude that a holistic top-down planning approach, which combines the comprehensive and standardized characterization of geological and economic conditions on geothermal play-scale, is necessary to effectively employ hydrogeothermal energy as a replacement of fossil fuelled heating.

Michael Drews et al. investigate the impact of drilling order criteria on the economics of hydrogeothermal heating portfolios. They show that considering cost, thermal power and geologic uncertainty can minimize the risk profile and cost of failure.