Thursday, September 24, 2015

Geotermal energy as natural resource: a starter

Geothermal energy is not something that is much written about in economic journals. I think this is remarkable to say the least, because there is some nice potential on identification using spatial techniques, while the countries involved, those that have developed geothermal power are often not the ones we associate with having energy resources of the fossil kind (below I list 5, France, Italy, Iceland, Japan, and New Zealand). The main reason may be that the amount of energy created with it as a share of the total for many countries is minor, even thought the local impact might by quite large. 

However, one should note that geothermal has both the potential as a source of electricity production through steam power, and by using the heat directly, for instance to heat buildings. The use of the latter than would result in saving of, for instance, gas to heat houses. So measuring total exploitation of geothermal energy can be a bit tricky. 

Geophysically it's also an interesting topic with regards to other renewable energy sources. A geothermal source needs to be managed, in the sense that, when exploited too much at a time it will exhaust. So there is a limit to be observed in order to make it a sustainable long-term producer. Not much different from something like fisheries I suppose.

So here a small country overview to get you started on a topic. They were selected based on what I came across. In terms of use, the US and China are the largest []. In terms of capacity, Indonesia and the US are, but Indonesia has not much production installed. All interesting variations that may be used for new research.

A geothermal source exists tight under Paris, which is being exploited to heat 170,000 homes ( France banned fracking [], and while the proponents of fracking found that inconsistent with the approval for geothermal development, the judge disagreed. Find some more information of french geothermal development here []

As a share of total energy production, Iceland ranks top. 65% of its energy use is derived from geothermal resources [], most of it used for heating homes. It is the major facilitator for its aim to become the first country that lives entirely of renewable resources. If you write a paper, perhaps you can present it here [] next year.

The economist writes about Italian geothermal development in tuscany this week. Italy is the major [] exploiter of geothermal in Europe. In terms of numbers it is still a small percentage of total energy production [].

Japanese onsen are the ultimate enjoyment of geothermal activity. The fact that one can find onsen scattered all over the country means that geothermal energy can be exploited throughout the county []. About 10% of national energy production was provided by geotermal plants. This is still low [] given the capacity. Development is still ongoing []. According to Japanfs, Japan has the largest capacity for geothermal use after Indonesia and the US. I don't feature these countries here, but they may still be very interesting to look at.

New Zealand
New Zealand is boiling over with geothermal activity, especially on the North Island. A significant part of the energy supply comes from geothermal resources. Here we also find Professor Basil Sharp, at the University of Auckland who was visiting Oxford last year and has written about the topic. The interesting thing I also found was that geothermal resources have a special value and (religious) meaning for Maoris. So in order to exploit these resources, their rights and preferences are taken into account. At the same time, since they have ownership rights over some of the locations where geotermal energy can be exploited for commercial production, they can receive a royalty income stream (Sharpe and Malafeh, 2005 Energy Policy). So similar to what is observed in mining, there is a potential for local spillovers and development from natural resources.

Time to get these papers written!

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