S. Gkousis, K. Welkenhuysen, and T. Compernolle (2024)
Integrated assessment of deep geothermal heating investments in Northern Belgium through techno-economic, life cycle, global sensitivity and real options analysis
Geothermics, 121(103027).
The decarbonization of the heating sector is crucial for the green transition of the energy mix. This study
investigates threefold the economic and environmental performance of deep geothermal heating investments in
Northern Belgium First, techno-economic and life cycle assessment (LCA) are performed, followed by a global
sensitivity analysis focusing on the geological uncertainty. Lastly, real options analysis (ROA) is employed
to investigate the economic and environmental value of the investors’ flexibility. A novel ROA method
is proposed that considers the LCA results to calculate development decisions that minimize the expected
environmental impact of the investment. The results show that the economic and environmental performance
of the investment vary with the energy prices and the electricity mix. The performance of the investment is
driven by the plant’s pumping requirements, which are induced by the relatively low rock permeability at
the targeted location. Also, the results’ variability mainly originates by uncertainty regarding the permeability
value. Nevertheless, the investors’ flexibility adds large economic and environmental value to the investment.
However, the development strategies that optimize the economic or the environmental performance of the
plant present some trade-offs. This study demonstrates that the economic and environmental performance of
deep geothermal heating investments in Northern Belgium can be improved by focusing on the factors that
simultaneously drive the costs, environmental impacts, and their variability. It also shows that utilizing the
investors’ flexibility to optimize the investment’s economic and environmental performance can add significant
value to the investment.
Peer Review, Open Access, Impact Factor
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