Subject: Comments to Draft Specifications for Application of UNFC-2009 to Geothermal Energy Resources: from Geosciences and Reservoir Engineering Group (GREG), Energy Development Corporation (EDC), Philippines
28 July 2016
Introduction
Why is there a need for yet another methodology for geothermal resource assessment?” We have the Australian Code and the Canadian Code. These two codes were formulated as a guide to allow developers to source funds on stock markets with a transparent and reproducible approach to resource assessment which was intended to make it easy to compare one resource with another on exactly the same basis. In spite of the UNECE assertion in the report summary, for there being no globally agreed guideline for resource assessment in 2009, it is worth noting that both the Australian and Canadian codes were in existence at that time and although these may not have gained global acceptance, a lot of resource assessments have been done under these codes in at least Australia, Canada, Chile, Peru, the Azores, Vanuatu, Indonesia and New Zealand.
The UNECE should recognize that these de facto standards for resource assessment predate the UNECE code and they should provide a comprehensive review of these older codes with justifications as to why the need to present yet another code and to describe the advantages and improvements that the UN code offers
None of this withstanding we are pleased to see that the UNECE code has been enthusiastically taken by several competent and experienced geothermalists such as Grant and Ussher (Grant and Ussher, 2015: 37th NZ Geothermal Workshop, 2015). They endorse the UN code for allowing a greater degree (more granular) of precision in the definition of the status of resources, through the use of three axes in categorizing the resource. However, we find in the example cited in the UNECE report this still allows for a measure of subjective bias by the reviewer to creep into this process.
Notes on UNECE Report
Page 9. Introduction. It is noted that two additional reports should be read in conjunction with the report reviewed. It would be much preferable if these were incorporated into a single, stand alone document.
Page 9. Item 6. The thermal energy source should be present in a local accumulation of anomalously high amounts of heat relative to its surroundings. For this reason we question whether ground source heat pumps should be included in the discussion as they rely only on temperatures which are at normal back ground levels in the shallow subsurface.
Page 9. Item 7. Why only limit the Geothermal Energy Product to electricity and heat. Other byproducts such as those listed should also be considered. If inorganic materials have revenue streams which should be included in any economic evaluation it must logically follow that the inorganic materials do qualify as Geothermal Energy Products.
Page 11. Item 20. This is a good definition for economic life of a project
Page 10/11. Item C.
There should be some mention of revenues from the project being inflation indexed to allow for a gradual increase in revenues with time.
Axis Categories (Pages 12-14)
1) Page 12. This is where the report would benefit greatly from a robust presentation on the axes (as noted above in terms of the two additional reports located elsewhere). In this regard we found “Figure 1: UNFC Categories (ECE 2013)” and associated discussion in Grant and Ussher (2015) to be most helpful.
2) “Page 12 - Foreseeable future”. Is "foreseeable future" based on the assumed technological horizon for energy extraction and development? In the Case Study given for the Alto Peak example, “Foreseeable future “ is apparently used in a longer term context as it is most unlikely that this field could be adequately delineated and developed within the “foreseeable future” (i.e. in < 5 years) given the issues that the resource presents for an acidic magmatic fluid core (“chimney”) which will prove very challenging for materials engineering, both in wells and surface plant.
3) The EFG tables in Annex I on pages 17 to 25 are good but as mentioned it would be much better had these been supplemented with a figure and description of the EFG “cube”.
4) On the F-Axis categories (Section J, Clauses 36-45; Annex 1), about co-generation of geothermal energy with other energy sources, e.g. biomass waste heat or solar heating of geothermal brine for additional energy (for electricity and/or heat). How do we account for the additional development or generation from such methods, which are basically surface-related but still applied to geothermal?
5) On G-axis categories (Section K, and Annex 1): How is the classification and uncertainty of geothermal energy resource determined, if the constraint is more social or political in nature and not technical (geologic, etc)? In some cases the parameters used in Monte Carlo runs such as area may be dictated by such constraints. Or is this not considered here?
Case studies
Habanero (Pages 31 to 34)
The project is adjudged on E axis considerations (E2) to become viable in the foreseeable future (i.e. within 5 years). However on F axis criteria the project is considered to be F2.2 which by definition means commercial development of the project may be subject to a significant delay which we would think will be well in excess of 5 years. This suggests that the E2 rating should better be revised to E3.
Alto Peak (Pages 63-67)
In paragraph 7, page 64: The sentence should read "To date, nine production wells (two were cement plugged) and one injection wells were drilled in the project area."
This project is an interesting test of the UNECE resource assessment methodology. The resource has a very high temperature centralized magmatic core about which currently neutral fluids are developed. It may be difficult to develop within the limits of conventional materials technologies, unless the peripheral neutral fluids can be accessed directly and separately to the magmatic acidic core.
In the Case Study review, practically no mention is made of the nature of the magmatic acidic core at Alto Peak but it is recognized that the field is “immature”. In spite of this a total of 10 wells were drilled and a feasibility study undertaken after the first 4 of these which assessed the field as being “technically and economically feasible”. The 6th and 7th wells proved to be highly acidic and a full evaluation of the impact of this on future development plans is still required.
Another issue that this project raises is that a Monte Carlo simulation of a geothermal resource raises no questions on the usability of the produced geothermal fluids. It simply assesses hot fluid available in the rock, irrespective of chemistry. If the fluids are acidic, they cannot be used to transfer the resource heat to surface facilities.
The resource has been classified as E2:F2.2, G1+G2+G3. We believe this should instead be E3: F4.2: G1+G2+G3. This point demonstrates that subjectivity of the evaluator can creep in to this process and the impact of the term “foreseeable future”. Research work is currently ongoing at producing acid magmatic geothermal systems but it is most unlikely that these studies will be concluded and commercially implemented within the “foreseeable future”, i.e. within 5 years.
Baslay Dauin Project (Pages 68-72)
Again an acidic geothermal field which has not been as widely drilled as Alto Peak and it is not then clear whether the acidity is distributed occasionally, or widely throughout the reservoir. The same issues crop up with a Monte Carlo assessment being made of hot acidic fluids which cannot be commercially utilized for their heat content because of their chemistry. We nonetheless agree with the evaluators view on this project being an E3: F2.2: G1+G2+G3.
Comments from Geosciences and Reservoir Engineering Group (GREG), Energy Development Corporation (EDC), Philippines, to Draft Specifications for Application of UNFC-2009 to Geothermal Energy Resources.
28 July 2016
Introduction
Why is there a need for yet another methodology for geothermal resource assessment?” We have the Australian Code and the Canadian Code. These two codes were formulated as a guide to allow developers to source funds on stock markets with a transparent and reproducible approach to resource assessment which was intended to make it easy to compare one resource with another on exactly the same basis. In spite of the UNECE assertion in the report summary, for there being no globally agreed guideline for resource assessment in 2009, it is worth noting that both the Australian and Canadian codes were in existence at that time and although these may not have gained global acceptance, a lot of resource assessments have been done under these codes in at least Australia, Canada, Chile, Peru, the Azores, Vanuatu, Indonesia and New Zealand.
The UNECE should recognize that these de facto standards for resource assessment predate the UNECE code and they should provide a comprehensive review of these older codes with justifications as to why the need to present yet another code and to describe the advantages and improvements that the UN code offers
None of this withstanding we are pleased to see that the UNECE code has been enthusiastically taken by several competent and experienced geothermalists such as Grant and Ussher (Grant and Ussher, 2015: 37th NZ Geothermal Workshop, 2015). They endorse the UN code for allowing a greater degree (more granular) of precision in the definition of the status of resources, through the use of three axes in categorizing the resource. However, we find in the example cited in the UNECE report this still allows for a measure of subjective bias by the reviewer to creep into this process.
Notes on UNECE Report
Page 9. Introduction. It is noted that two additional reports should be read in conjunction with the report reviewed. It would be much preferable if these were incorporated into a single, stand alone document.
Page 9. Item 6. The thermal energy source should be present in a local accumulation of anomalously high amounts of heat relative to its surroundings. For this reason we question whether ground source heat pumps should be included in the discussion as they rely only on temperatures which are at normal back ground levels in the shallow subsurface.
Page 9. Item 7. Why only limit the Geothermal Energy Product to electricity and heat. Other byproducts such as those listed should also be considered. If inorganic materials have revenue streams which should be included in any economic evaluation it must logically follow that the inorganic materials do qualify as Geothermal Energy Products.
Page 11. Item 20. This is a good definition for economic life of a project
Page 10/11. Item C.
There should be some mention of revenues from the project being inflation indexed to allow for a gradual increase in revenues with time.
Axis Categories (Pages 12-14)
1) Page 12. This is where the report would benefit greatly from a robust presentation on the axes (as noted above in terms of the two additional reports located elsewhere). In this regard we found “Figure 1: UNFC Categories (ECE 2013)” and associated discussion in Grant and Ussher (2015) to be most helpful.
2) “Page 12 - Foreseeable future”. Is "foreseeable future" based on the assumed technological horizon for energy extraction and development? In the Case Study given for the Alto Peak example, “Foreseeable future “ is apparently used in a longer term context as it is most unlikely that this field could be adequately delineated and developed within the “foreseeable future” (i.e. in < 5 years) given the issues that the resource presents for an acidic magmatic fluid core (“chimney”) which will prove very challenging for materials engineering, both in wells and surface plant.
3) The EFG tables in Annex I on pages 17 to 25 are good but as mentioned it would be much better had these been supplemented with a figure and description of the EFG “cube”.
4) On the F-Axis categories (Section J, Clauses 36-45; Annex 1), about co-generation of geothermal energy with other energy sources, e.g. biomass waste heat or solar heating of geothermal brine for additional energy (for electricity and/or heat). How do we account for the additional development or generation from such methods, which are basically surface-related but still applied to geothermal?
5) On G-axis categories (Section K, and Annex 1): How is the classification and uncertainty of geothermal energy resource determined, if the constraint is more social or political in nature and not technical (geologic, etc)? In some cases the parameters used in Monte Carlo runs such as area may be dictated by such constraints. Or is this not considered here?
Case studies
Habanero (Pages 31 to 34)
The project is adjudged on E axis considerations (E2) to become viable in the foreseeable future (i.e. within 5 years). However on F axis criteria the project is considered to be F2.2 which by definition means commercial development of the project may be subject to a significant delay which we would think will be well in excess of 5 years. This suggests that the E2 rating should better be revised to E3.
Alto Peak (Pages 63-67)
In paragraph 7, page 64: The sentence should read "To date, nine production wells (two were cement plugged) and one injection wells were drilled in the project area."
This project is an interesting test of the UNECE resource assessment methodology. The resource has a very high temperature centralized magmatic core about which currently neutral fluids are developed. It may be difficult to develop within the limits of conventional materials technologies, unless the peripheral neutral fluids can be accessed directly and separately to the magmatic acidic core.
In the Case Study review, practically no mention is made of the nature of the magmatic acidic core at Alto Peak but it is recognized that the field is “immature”. In spite of this a total of 10 wells were drilled and a feasibility study undertaken after the first 4 of these which assessed the field as being “technically and economically feasible”. The 6th and 7th wells proved to be highly acidic and a full evaluation of the impact of this on future development plans is still required.
Another issue that this project raises is that a Monte Carlo simulation of a geothermal resource raises no questions on the usability of the produced geothermal fluids. It simply assesses hot fluid available in the rock, irrespective of chemistry. If the fluids are acidic, they cannot be used to transfer the resource heat to surface facilities.
The resource has been classified as E2:F2.2, G1+G2+G3. We believe this should instead be E3: F4.2: G1+G2+G3. This point demonstrates that subjectivity of the evaluator can creep in to this process and the impact of the term “foreseeable future”. Research work is currently ongoing at producing acid magmatic geothermal systems but it is most unlikely that these studies will be concluded and commercially implemented within the “foreseeable future”, i.e. within 5 years.
Baslay Dauin Project (Pages 68-72)
Again an acidic geothermal field which has not been as widely drilled as Alto Peak and it is not then clear whether the acidity is distributed occasionally, or widely throughout the reservoir. The same issues crop up with a Monte Carlo assessment being made of hot acidic fluids which cannot be commercially utilized for their heat content because of their chemistry. We nonetheless agree with the evaluators view on this project being an E3: F2.2: G1+G2+G3.
Comments from Geosciences and Reservoir Engineering Group (GREG), Energy Development Corporation (EDC), Philippines, to Draft Specifications for Application of UNFC-2009 to Geothermal Energy Resources.