Sustainability assessment of geothermal systems under exploitation: Los Humeros, Mexico, as a study case

Nowadays, humanity is facing a significant challenge due to climate change. Therefore, the pressure to use sustainable ways to solve the current necessities is growing. One of the primary necessities is energy supply, and geothermal resources might represent a sustainable way to solve this. However, detailed monitoring at different development phases is needed to ensure sustainable use. This work proposes a general methodology to assess the sustainable exploitation of any geothermal site in the world. This methodology is based on Los Humeros, a geothermal site in Mexico exploited for the last 30 years. The proposed methodology is based on three basic aspects present in any producing geothermal site in the world: the stored energy, the environmental affectation, and the profitability performance of the project. Since geothermal energy is considered a renewable source and the environmental affectation is low, this work hypothesizes that exploiting the geothermal reservoir at Los Humeros is done under sustainable limits. To prove that, three main objectives were proposed: • To estimate the stored energy in the geothermal system • To determine the CO2 footprint of the power station • To assess the financial performance of the power project Each of the objectives represents one of the three cornerstones to define the sustainability of geothermal exploitation: enough available energy, low environmental impact, and sufficient money to cover all the possible externalities. Los Humeros is located in an active volcanic caldera. Therefore, there is a constant recharge of heat, which means enough energy to supply the demand of the power station for centuries. The first objective resulted in estimating the heat production for the next 30 years. This goal was reached by analysing production data from the wells. This data included mass extraction rate and fluid enthalpy—the analysis derived two production scenarios named pessimistic and optimistic. The optimistic one provided an estimation of 580 PJ, whereas the pessimistic predicted an energy extraction of 430 PJ. These scenarios were based on the quantiles of the historical mass extraction. Enough energy alone does, however, not fulfil the requirement for sustainability. The geothermal reservoir must be constantly monitored to manage the exploitation rate under the system’s sustainability limits and thus, the next generation will be able to exploit this volcanic geothermal reservoir. This last phrase leads to the next objective. The second objective was to determine how large is the CO2 footprint per kWh generated by the power station in Los Humeros. In this accounting, the CO2eq released due to the construction of the power station was included. As a result, with an emission factor of 442 to 580 gCO2eq/kWhel Los Humeros is in the the same range as the average Mexican emission factor (480 gCO2eq/kWhel in 2019). Finally, some options to deal with this CO2 externality were explored. Among them, the possibility of changing the current conversion technology for a closed binary station was considered. However, in order to make this change in technology, Los Humeros needs investment. The government and/or private investors can make this investment, or the profit of the power station can be enough, then the operator company (the Comisión Federal de Electricidad) can finance it in a free-debt scheme. In any case, the project needs to be profitable to solve all the possible externalities. In this sense, this dissertation's third goal was to estimate the power station's profitability. As mentioned before, Los Humeros has been under exploitation for the last 30 years. For the next period, upgrading of the conversion technology was carried out. To do that, the power station required a considerable investment. Therefore, this dissertation's last goal was to estimate two financial metrics to know the profitability of the geothermal power station: the break-even and the net present value (NPV). The NPV was evaluated using different interest rates. The profitability assessment was done for two scenarios. The first one considered the actual business scheme. It is called “the vesting contract”. The second scenario assumes that the power station participates in the open and regulated Mexican electricity market. The vesting contract is designed to prevent the volatility of the spot market, but it also aims to make the power station profitable. The results showed a break-even after 8 years in this scenario and after 4.5 years in the second one. However, the NPV showed only negative values for the second scenario. In principle, that outcome suggests not to invest in this project, yet this NPV evaluation was done for only five years and not for the entire 25 years of the lifetime. After the application of this proposed methodology, the results showed that the current exploitation of Los Humeros is not sustainable. The three studies are necessary to have a wider overview of the current situation of this activity. The results showed enough available energy for the next period. Although the CO2 footprint is comparable with the average fossil Mexican emission factor, some options to mitigate this could be applied with the earnings perceived by the sale of electricity. Thus, exploiting the geothermal reservoir is currently not sustainable, but there is a solid potential to be. The explored aspects defined three indicators: energy, CO2 footprint, and money. Two offered positive results towards sustainability; however, the environmental affectation is a hurdle that could be overcome in the following years