Resource engineering and economic studies for direct application of geothermal energy. Draft final report
The feasibility of utilizing geothermal energy at a selected plant in New York State was studied. Existing oil and gas records suggests that geothermal fluid is available in the target area and based on this potential. Friendship Dairies, Inc., Friendship, NY, was selected as a potential user of geothermal energy. Currently natural gas and electricity are used as its primary energy sources. Six geothermal system configurations were analyzed based on replacement of gas or oil-fired systems for producing process heat. Each system was evaluated in terms of Internal Rate of Return on Investment (IRR), and simple payback. Six system configurations and two replaced fuels, representative of a range of situations found in the state, are analyzed. Based on the potential geothermal reserves at Friendship, each of the six system configurations are shown to be economically viable, compared to continued gas or oil-firing. The Computed IRR's are all far in excess of projected average interest rates for long term borrowings: approximately 15% for guarantee backed loans or as high as 20% for conventional financing. IRR is computed based on the total investment (equity plus debt) and cash flows before financing costs, i.e., before interest expense, but after the tax benefit of the interest deduction. The base case application for the Friendship analysis is case B/20 yr-gas which produces an IRR of 28.5% and payback of 3.4 years. Even better returns could be realized in the cases of oil-avoidance and where greater use of geothermal energy can be made as shown in the other cases considered.
- Research Organization:
- New York State Energy Research and Development Authority, Albany (USA); Gibbs and Hill, Inc., New York (USA); State Univ. of New York, Buffalo (USA); Southern Tier West Regional Planning and Development Board, Salamanca, New York (USA)
- DOE Contract Number:
- FG03-80SF11441
- OSTI ID:
- 5347427
- Report Number(s):
- DOE/SF/11441-1; ON: DE82018901
- Resource Relation:
- Other Information: Portions of document are illegible
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
DAIRY INDUSTRY
GEOTHERMAL PROCESS HEAT
ECONOMIC ANALYSIS
CHEESE
FEASIBILITY STUDIES
FOOD PROCESSING
INVESTMENT
NEW YORK
PAYBACK PERIOD
TAXES
AGRICULTURE
ECONOMICS
ENERGY
FEDERAL REGION II
FOOD
FOOD INDUSTRY
HEAT
INDUSTRY
MILK PRODUCTS
NORTH AMERICA
PROCESS HEAT
PROCESSING
USA
Geothermal Legacy
151000* - Geothermal Energy- Direct Energy Utilization