A Techno-Economic and Business Model Assessment of CO2 Plume Geothermal (CPG)

Abstract This study assesses the technoeconomic viability of CO2 Plume Geothermal (CPG) by employing reservoir numerical modeling, techno-economic analysis, and financial modeling to determine the economic conditions that would facilitate the widespread adoption of CPG. CPG represents a novel business opportunity that combines two decarbonization technologies – carbon capture, utilization, and sequestration (CCUS) and low-temperature geothermal power generation. While both technologies are essential in decarbonization, their standalone economics often hinder scalability. Reservoir modeling estimates CO2 injection rates, sequestration capacity, and fluid production rates for power generation, while the Flexible Geothermal Economics Modeling tool (FGEM) was used for an initial techno-economic assessment to determine the net present value (NPV) and levelized cost of electricity (LCOE) of the CPG system. Further economic parameters were considered through a discounted cashflow model that took into account the 45Q tax incentive, the Investment Tax Credit (ITC), the Clean Power Tax Credit (PTC), and the bonus depreciation schedule, designed to accelerate cash flow recovery and improve project economics. The results of this study indicate that CO2 Plume Geothermal (CPG) can be highly competitive with other energy sources. For conventional geothermal heat extraction from a doublet in sedimentary rock, the LCOE using FGEM was estimated at $217/MWh, resulting in a negative net present value (NPV) of -$58 million. When CO2 was used as the working fluid in the geothermal system with adjusted flowrates at 80kg/s, the estimated LCOE for CPG decreases to $50/MWh. This is primarily due to an optimization of flowrates and depth that unlocks higher temperature gradients. After applying Inflation Reduction Act (IRA) incentives, the adjusted LCOE drops by $10/MWh for CPG. This results in a post-incentive LCOE of $40/MWh. Using the other economic and financial incentives, we observed the NPV of the project change from negative -$44 million to positive $67 million, resulting in an Internal Rate of Return (IRR) increase of more than 15% and a shortened payback period from 30 to 5 years. The findings highlight the economic benefits of integrating CO2 sequestration with geothermal power generation. CPG represents a unique opportunity for colocation with data centers and major tech hubs in the U.S. It was shown that the data center energy demand regions overlay with high geothermal active zones, hence presenting a unique opportunity for behind the meter power, skipping integration queues and costs, and above all shielding these industries against market volatility, while sourcing firm, dispatchable and clean power.