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How a Geothermal-powered Home Reduces Environmental Impact and Saves Money

Blog post   •   May 19, 2015 14:30 +08

'Geothermal' is an amalgam of two words: geo (earth) and thermal (heat). Geothermal energy takes advantage of the hot magma (molten rock) beneath the earth's crust. The heat of the magma can be used to heat water or another fluid, which is pumped back up to the surface to power a turbine that produces electricity.

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How Geothermal Energy Works

According to the Geothermal Energy Association, geothermal energy offers a virtually limitless supply of electricity. The heat generated from deep within the earth is the equivalent of 42 megawatts of power and can be relied on into the indefinite future. Moreover, the water or other liquid used to run turbines can be largely recycled, drastically reducing the use of resources.

Geothermal energy in Southeast Asia and its costs

According to a Reuters report, Indonesia is the world's third largest producer of geothermal energy, but has until recently been unable to take full advantage of its potential because of red tape, uncompetitive power tariffs and uncertainty over asset ownership. These barriers to production have been overcome and if plans go forward, Indonesia will lift its production of geothermal energy for the country’s electricity needs from three per cent to 10 per cent by 2020.

In 2014, Indonesia began construction of the world's largest geothermal power plant in Sarulla, North Sumatra. The plant will cost US$1.6 billion to build and generate enough electricity for 330,000 homes.

The Sarulla geothermal power plant is a 330mW plant and will require little if any non-renewable, greenhouse gas-emitting fuel to operate. A 50mW power station would save the equivalent of half a million barrels of oil per year. The question then is the initial cost worth the investment?

Approximately 500km away in neighbouring Singapore, Grahame Oliver of the Department of Civil Engineering in the National University of Singapore cites a project in California and argues in favour of the initial investment for the country, with reasons as follows:

  • Development costs were US$2.9 million per megawatt (mW).
  • A 50mW power station could provide electricity for "a good portion" of Singapore's Mass Rapid Transportation railway system at a total cost of US$149 million.
  • Sold at a domestic rate of 12 cents per kilowatt hour (kWh), the profit is 7 cents/kWh or US$70 per megawatt hour (mWh).
  • At this rate, the development cost could be written off in under five years.

Although the demographic make-up of Singapore is different from that of Indonesia, the economics of installing a geothermal power plant is similar in any area where an abundance of geothermal energy is available.

The cost of geothermal energy to consumers

The Philippines is the world's second largest producer of geothermal energy. According to the Utrecht Faculty of Education, geothermal electricity in the Philippines is less expensive to produce and supply than coal, gas and even hydro-electric power. However, while development costs may be written off in a short time, ongoing costs remain and the consumer pays these costs.

In contrast to geothermal power, the homeowner assumes the upfront cost of installing a solar photovoltaic system (solar power). While the initial cost of installing such a system is much higher than simply connecting to a grid system of any kind, owners of a solar power system do not have to pay for the electricity produced by their systems.

A study published in the Journal of Advanced Science and Engineering Research concludes that photovoltaic "projects implemented in Malaysia are economical and environment friendly and should be promoted to residential house owners." It goes on to state that "the average annual return on investment varies from 3.24 per cent to 11.93 per cent, with a payback period of between 5.99 years and 12.49 years."

When highly efficient solar panels are combined with a lithium-ion storage battery, a household in Southeast Asia can produce most if not all of its energy needs.

Economically and environmentally, geothermal energy makes sense, but it's important to look beyond just one renewable energy source. Large-scale geothermal plants can provide clean energy to millions of households. On a smaller scale, individual households and businesses in Southeast Asia can reduce their energy costs with solar energy. Combined, geothermal and solar energy can provide clean, renewable energy and reduce carbon emissions to near zero.

[Image Source: Flickr]