Hot Rocks
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- เผยแพร่เมื่อ 30 ก.ย. 2024
- Geothermal energy from hot rocks underground. Detailed look at the Geysers geothermal power plant in Northern California and it history and output. Use of such installations for district heating such as in Reykjavik Iceland.
As I understand it the soviets dug the deepest hole in the world, but there was a problem: It was 200+ degrees and their equipment couldn't handle it. Is there a reason we can't just dig to a point like that, where we're likely never to surpass the heat from the mantle, and use that as a very long term source of power? Granted, it's kind of an expensive project to get probably a quite small payoff, and the hole might not be stable, but it seems to me that'd be quite a long term investment if handled correctly. Even a milllion dollars for ten watts of power would be worth it over an extremely long period of time, I feel.
It wouldn't necessarily be worth it (even if ignoring operational costs) because the net present value of a perpetual constant income stream is still finite. Here's what that means: Since you're tying up capital to construct this plant that could have been used elsewhere that means that you're forgoing all the production that would have happened if you had used your capital to do more productive things. A good rule of thumb is that the NPV of a constant perpetual income stream is equal to the cash flow rate divided by the interest rate. Being really generous and saying that electricity is $1/kWh (because of course if you could build this anywhere you want you'd build it where electricity is most expensive), times ten watts is $10/kh, there are 8.76 kilohours in a year, so that's $87.60/year. 30y interest rates are 1.60%, so that's a net present value of $5,475.
If you're unsure about why NPV is the way it is, think about it this way: how much money would you rather have now than $1000 a year from now? Well, 1 year interest rates are 0.13%, so if you got $998.72 now, you could buy a one year bond for $998.71 which will pay out $1000 at maturity one year from now, plus you've got an extra penny. So getting $1000 a year from now is just as good as getting $998.71 today. The $998.71 is called present value. To get the present value of a perpetual cash flow, see how if you just bought a bond with the NPV money then the interest payments would be the same as the cash flow, and then once the loan is repaid, lend the money out again.
Of course, this is assuming that the price of time (the interest rate) is not being manipulated. Sadly, it's set by fiat by the government (more specifically the Federal Reserve, which is private in name only - if you have government granted powers and your leader is appointed by the government, then you are part of the government) because lower interest rates pump up less marginally useful ideas like borehole geothermal. Since the lower the interest rate, the smaller the number you divide by to get the NPV, you can get the borehole idea to look like a good idea no matter how small the returns are if the interest rate is low enough. This is nice if you are in power because all this malinvestment gives you a fake economy to take credit for, but it is unsustainable in the long run because commanding people to lend money doesn't change the economic feasibility of the projects that result.
If everything was explained like this, then energy conversations would not be political and divided.