closed loop, page-8

So the closed-circuit tests should have commenced by now. Upon full stabilisation, the company has estimated that the drop in temperature as the geofluid approaches equilibrium with the well environment will be roughly 9C. Considering the previously reported disparity between down-hole and production temperatures, the closed-circuit tests should actually demonstrate a slight increase in temperature over the course of the procedure.

The modelled loss over 50 years is 40C (based on the innumerous joules of geothermal energy extracted globally). It is clear when looking at the global data that temperature depletion is not the issue, but rather sustained flow rate (GDY will be targeting +100L/sec, though I suspect there is upside to this figure). As with all geothermal power stations, silica scaling of installed equipment will be an issue. In most cases this can require up to four hours per year in cleaning operations, performed by specialist contractors.

Down hole scaling, potentially leading to heterogeneous flow paths and blockage, can be addressed through additional hydraulic stimulation, though this is likely to occur very infrequently due to the very low rate of heat loss and the ability to remove some of the silica content at surface.

The heat is there. No exotic, physics-defying phenomenon is going to invalidate that assumption. We simply do not have the means to extract the heat at a rate that could deplete a resource that is measured in hundreds of cubic kilometres.

The flow rate should not be an issue either. Measurements indicate that if a pipe were constructed that reached 3 kilometres into the air, the geofluid from HAB3 would bubble out the top under it's own pressure (though unless they intend on developing an ancillary revenue stream through the operation of the world's highest, zero-emission waterslide, I cannot see this development eventuating).

Unfortunately, flow rate cannot be increased through the use of proppants (even bauxite), as they would be reduced to a costly proppant mud that would only serve to further restrict flow. According to GDY, there is nothing on the market that could survive the pressure conditions of this project at 5000m.

I spoke to the company earlier in the week, and they were able to confirm that they are very interested to see what stress horizons they can intersect at 6000m. It seems likely to me that just as JOL1 is being used to further advance their knowledge of the conditions at depth, SAV1 will take that knowledge to 6000m. At this depth, temperatures of roughly 350-360C are modelled, which could offer an option for reducing total capex (depending on whether the largely increased efficiency compensates for the increased drilling time, cost and risk).

The company's position is very strong.