As many mining venture, geothermal energy shares both exploration and exploitation risks. In the present case study, which addresses a large geothermal district heating (GDH) scheme, the drilling success ration approached 100% (one recorded failure out of ca.100 wells) whereas exploitation of the low temperature deposits showed, in the early stages, severe technical and non technical shortcomings leading to frequent, prolonged, well shutdowns and, ultimately, to their abandonment.
As a result, the ad-hoc mutual benefit insurance fund, setup to mitigate such damages, was asked by the subscribing GDH operators to assess, site wise, the exploitation risks, the remedial procedures and, last but not least re/evaluate the relevant repair/preventing costs and related sinking fund requirements.
Given a five to ten year well monitoring record a deterministic scenario approach was adopted. It consisted of classifying and ranking risk impacts, for each GDH site, according to weight and severity degree for selected technical and non technical criteria, namely:
1. technical (weighted 1)
a. last casing status assessed from residual thickness provided by periodical logging/inspection (three classes);
b. corrosion rates, prior to implementing chemical inhibition protocols, inferred from material balances after well cleaning/logging (three classes);
c. efficiency of corrosion inhibition practice based on thermochemical monitoring and direct metering of corrosion kinetics and log quantifying (two classes);
d. well completion status with respect to damage repair opportunities via casing (re)lining, either total, partial, impossible (three classes);
e. the likely dates estimated for drilling/completing new well/doublet (three classes related to early to late deadlines);
2. nontechnical (weighted 3). Those were globalised as either favourable or non favourable conditions respective to future sustainable exploitation issues. They address, among other issues, heating grid extension, natural gas competition, operator’s managerial, financial and motivation capacities.
The survey enabled to appraise three classes of risks on a representative sample of 18 doublets, further extended to the whole GDH set (i.e. 36 doublets), distributed as follows:
- low risk 12
- fair risk 14
- high risk 10
The ultimate stage led to a cost schedule, estimated from an itemised list of repair works and three scenarios regarding completion dates, projected for each risk level over a 15 year life. It formed the core of the sinking fund and subsequent subscription fees.
Twelve year after its initiation, the exercise proved rewarding since 80% of predicted figures were validated.