Evaluating the Cost-efficiency and Sustainability of Geothermal Projects: A Study on Onshore Oil Wells in the United Arab Emirates
The United Arab Emirates (UAE) has long been recognized as a global leader in the oil and gas industry. However, the UAE’s ambitious vision for sustainable energy and the pressing need to diversify its energy portfolio have led to increased interest in alternative energy sources, including geothermal energy. Although the resource is continuously available, geothermal energy production involves high exploration, drilling, and completion costs. This study explores the cost-efficiency of repurposing existing hydrocarbon wells for geothermal production or co-production, as a solution to mitigating the high costs of drilling new wells.
The research framework encompasses a thorough review of existing literature, case studies of successful geothermal projects worldwide, feedback from industry experts, and on-site data (primary data) collection from selected hydrocarbon wells. The study employs a quantitative research method to evaluate the operating parameters of onshore hydrocarbon wells to develop financial models for geothermal energy production units. Through a detailed economic assessment, the study investigates the financial benefits of adapting existing oil wells for geothermal energy production, considering the geological and geothermal characteristics of the UAE’s subsurface. The resulting financial indicators are compared to those of geothermal projects from newly drilled wells.
The key findings of the research are that geothermal energy production from the studied hydrocarbon wells exhibit an average Levelized cost of energy (LCOE) of 0.055 USD/kWh which is lower than the market sales price for electricity by 0.025 USD/kWh, and lower than the reference geothermal projects from new wells by 0.007 USD/kWh. The proposed co-production model promises higher returns for a shorter period, with better resilience to high costs of capital. The study concludes by offering valuable insights into the potential for geothermal energy and recommendations to complement the UAE’s energy mix while contributing to its sustainability goals. The recommendations are aimed at guiding policymakers, oil and gas and geothermal industry stakeholders, and future researchers in fostering a more sustainable energy future for the UAE and beyond.