Global geothermal is "hot" green future will come

As a major global energy consumer, China has similar considerations to Europe in promoting the development of the geothermal industry. On the one hand, we hope to reduce the import of fossil energy through the development of geothermal industry, and on the other hand, we hope to use the green and low-carbon characteristics of geothermal to achieve the "double carbon" goal. In 2023, the National Energy Administration issued 12 standards related to geothermal, which will further regulate the geothermal industry. In August, the National Development and Reform Commission and ten departments issued the "Green low-carbon Advanced Technology Demonstration Project Implementation Plan", proposing that the future shallow/deep geothermal energy heating and cooling and large capacity efficient geothermal energy and dry hot rock power generation is the key direction of demonstration project construction. The development of geothermal energy in various provinces is also accelerating, and Hebei Province has issued the "Regulations on the Promotion of New Energy Development in Hebei Province (Draft)" to support multiple uses such as clean heating. In the future, the development and utilization of geothermal energy in China will show a trend of shallow + medium and deep development.

The geothermal industry has greater potential and space for development

The development strategy and route of geothermal industry need to be further clarified. Geothermal energy has high stability, continuous supply efficiency is 4 times that of wind energy and 5 times that of solar energy, and it is a major strategic choice for China to build a new power system, improve people's quality of life, and achieve clean heating and cooling. At present, most of the geothermal policies that have been introduced in China are guiding, and the project construction is mainly based on decentralized residential building heating and cooling, without forming a stepped and large-scale sustainable development route planning, and it is still necessary to further improve the level of industrialization.

Geothermal resource exploration and development data need to be further strengthened. The development of high quality geothermal industry requires more accurate resource exploration. China has the potential of geothermal resources development, but the current investment in geothermal resources exploration and evaluation can not meet the needs of the rapid development of geothermal industry. According to the data of the National Geological Survey Bulletin (2021), the investment in geothermal exploration in China in 2021 is 525 million yuan, accounting for only 3% of the non-oil and gas investment, which is reduced by 18% compared with 2020, and only key investments are made in a few areas in the Beijing-Tianjin-Hebei region and the dry hot rock projects in the Gonghe Basin. Due to the lack of resource evaluation, geothermal development enterprises can only rely on incomplete geothermal data, or learn from oil and gas exploration data, and sometimes have to invest in resource exploration evaluation in key areas, which aggravates the exploration risk and increases the development cost.

The economics of geothermal projects require further policy support. The power generation cost of Xizang Yangyi Power Station is about 3 yuan/KWH, while the on-grid electricity price is only 0.25 yuan/KWH, and it has not applied for any electricity price support policy, and it is in a state of cost inversion for a long time. In addition, the new version of China's Resource Tax Law lists geothermal as an energy mineral, and imposes "geothermal mineral resource tax" and "water resources fee" on the amount of geothermal. The annual geothermal fluid circulation volume of Yangyi Power Plant is 5.47 million cubic meters of geothermal resources, and it needs to pay at least 5.47 million yuan of resource tax every year, which increases the project operating costs. At the same time, the geothermal heating and cooling pricing system also needs to be further improved. In theory, the high cost of geothermal projects is not unsolvable. The scale brought by technological progress, carbon tax policy, carbon trading, fiscal policy, heating and cooling integration adjustment and optimization can reduce the cost of geothermal projects.

Key technologies for geothermal energy utilization need further breakthroughs. The use of shallow geothermal energy causes the imbalance of cooling and heating load, and the difficulty of recharge in middle-deep sandstone reservoir limits geothermal heating and cooling. The geothermal power generation equipment in China uses Omatte organic Rankine technology, but the development of technology is at a standstill. The dry-hot rock power generation project in Gonghe Basin in Qinghai province has encountered many technical challenges, such as induced seismic activity, insufficient high-temperature drilling capacity, or insufficient connectivity between injection Wells and production Wells, etc. The project has invested 380 million yuan and achieved more than 6,000 hours of power generation in 2021, but has not reached the economic level of commercial development. Closed-loop geothermal system (AGS) is safe and reliable, and has the potential to produce great social and economic benefits, but there is no relevant technology research and development in our country.