DS:HDR

1. DS:HDR Geothermal Project DS:HDR(Deep Shafts:Hot Dry Rocks)It. patents RM99 A000357 of June 3rd, 1999 and RM2002 A000521 of Oct.15th, 2002 …to access renewable energetic sources Author: D’OFFIZI Sergio April 26th, 2002 Revised Oct. 15th, 2002(minibrochure version)

2. Short curriculum vitae of the Author SERGIO D’OFFIZI • Graduate in Geological Science at Rome University. • Professor non tenured of seismotectonics at Rome III and Perugia Universities and at High School post-graduate courses. • From 1976 to 1983 at the ENEL (Electric National Board of Italy) Geothermal Research Center of Pisa managing projects in Italy, Greece and Iran and where he developed the geophysical model by which the geothermal field of Latera (near Bolsena Lake, central Italy) was discovered. • From 1983 to 1999 he worked at the ENEL Construction Department (where in 1994 he was appointed manager) for locating and designing several power plants and transmission lines. He developed a new seismotectonic approach that takes into account the geomechanical and rheological characteristics of the rocks and the geological structures capable of causing earthquakes. The new approach has been directly applied by the author of the present brochure in the evaluation of the seismic input of several nuclear power plants (among these the shelter for the Chernobyl NPP in Ukraine, the Chashma NPP in Pakistan, the Sholkino NPP in Crimea, the Montalto di Castro NPP in Italy). He also designed, jointly with experts of EdF (Electricité de France), the boring of a railway tunnel between Turin, Italy and Lyons, France. The tunnel will be 52 km long and should be excavated under the Alps; at the Ambin massif, it will have an almost 3 km of rocks overburden with the walls of the tunnel reaching temperatures of 60-70°C. Chernobyl 1986 The 52 km long tunnel under the Western Alps, foreseen along the Turin-Lyons high speed train railway • In January 2000 he was appointed Director of Land and Environment of SOGIN, a State-owned society whose mission is the decommissioning of the four Italian NPPs. The structure inherited all the experiences gathered in ENEL in the Environment Impact Assessment of its plants (more than 52 EIA studies, for several kind of power plants and electric transmission lines) and in location big power plant at risk. • The new project DS:HDR, for exploiting the internal heat of the earth, arose from all these experiences and required more than 15 years of study. It has been registered at the Italian Patents and Marks Office of Production Activity Minister with two requests (RM99 A000357 of June 3, 1999, Patent n. 01311464 of April 23, 2002 and RM2002 A000521 of October 15, 2002). • The project has been judged by ENEL-Erga (now ENEL-Greenpower) as “…an innovative and interesting project…”

3. DS:HDR The warming-up of our planet, due to the release of greenhouse gases into the atmosphere,is deeply worrying governments and people Increasing of atmospheric average temperature from 1880 and 2000 (°F) (from: U.S. National Climatic Center, 2001) TO THE CONSUMERS (Time Magazine of April 23, 2001): “... Choose electric companies that don’t produce electricity by sources emitting CO2 as fossil fuels...” Retreat speed of Grinnel Glacier (Montana) had an acceleration from the beginning of 1900 (the arrows show the ice limits through the years)

4. DS:HDR At the Kyoto meeting it was been established to solve the problem by using clean energy sources instead of fossil fuels; the internal heat of the earth can contribute to meet such goal An oil company like Shell decided to invest a noteworthy amount of money in advertising and in the development of researches on renewable sources (see Shell Renewables) to give the consumers the image of an environmentally friendly company. CRUST MANTLE If we look at the internal temperatures of the Earth we can agree that the internal heat of our planet is the most diffused and largest renewable and clean energy at our disposal. 30-70 km CORE 1000°C 2900 km 5200 km 3700°C 4300°C Internal temperatures of the Earth Accessing such kind of energy would mean giving an answer to the most relevant challenges of the third millennium: • combining the industrial development and planet health; • avoiding conflicts between oil-producing countries and consumers ones. • From the U.S. Department Of Energy (DOE) site www.energy.gov: • “geo (earth) thermal (heat) energy is an enormous, underused heat and power resource that is clean (emits little or no greenhouse gases), reliable (average system availability of 95%), and home-grown (making us less dependent on foreign oil)”

5. DS:HDR As of today we have been able to access only a very little amount of the enormous quantity of the heat laying below the earth surface Geothermal power plant and thermal pool in Iceland The overall power of the plants in the world utilizing geothermal energy, coming from the rare hydrothermal reservoirs and/or of the even rarer surficial thermal emergencies, reaches very modest values: 8,000 MWe (with about 50 TWh/year produced) and 12,000 MWt (respectively for the electric production and for the direct use of the heat). Geothermal well

6. DS:HDR The experiments of Fenton Hill (New Mexico) give us new perspectives for exploiting crustal Hot Dry Rocks (HDR) The experiments carried out between 1977 and 1995 by the Los Alamos National Laboratory for the U.S. Department of Energy (DOE) demonstrated how relatively easy it is to extract the heat from the rocks below the surface by means of wells drilled from the surface through which injecting cold water down and drawing it off heated: with such heat has been possible to spin a little generator of electric current. Similar experiments are currently carried out in the world (France, Japan, England, Swiss, Australia) showing the interest of the method. Fenton Hill scheme Fenton Hill HDR plant However the high costs of this plant, more than 20 times a modern gas fuelled power plant, doesn’t allow at present to pass from the experimental phase to the industrial one. If we were to construct a 1,000 MWe HDR power plant with the Fenton Hill scheme (where, with three wells, had 4.8 MWe), it would be necessary to drill more than 600 wells with a length of 4-5 km for a total expense, only for the drillings, of about 7 billion €.

7. DS:HDR The new proposed scheme, named DS:HDR (Deep Shaft:Hot Dry Rocks), removes the present obstacles to the industrial exploiting of crustal heat Besides the high costs, a HDR plant for exploiting the internal heat of the earth, constructed scaling to 1,000 MWe the Fenton Hill experiment, would have an other big problem: the more than 600 wells required should be scattered over an area of 60-70 km2, inducing an unacceptable impact on the territory. Surface to be interested: 4-5 km 60-70 km2 Non productive part of the wells Productive part of the wells drilled in rocks at about 300°C The new plant, named DS:HDR (from Deep Shaft:Hot Dry rocks) (Patents RM99 A000357 of June 3rd, 1999 and RM2002 A000521 of Oct.15th, 2002 n. 01311464 of Italian Patents and Trade-Mark Office of Productive Activities Minister, owned by the Author of present brochure) substitutes all the non-productive parts of the drillings by means of a shaft (vertical or at various angle decline) of large diameter and some sub-horizontal tunnels; this allows to drastically reduce both the costs and the impact on the territory. surface 4 km Productive part of the wells drilled in rocks at about 300°C The drilling of the only productive part of the wells (the final or deeper one from which the circulating fluids can be pumped or recovered into/from the surrounding hot rocks) is, in this case, made directly from the tunnels (thermal cohibented, hydraulically sealed and inside-refrigerated/conditioned) departing from the main shaft.

8. DS:HDR The new project DS:HDR doesn’t require the development of particular technologies: it is sufficient to improve the existing ones in mining field. 4 km Large diameter shafts reaching same depths are already working in the world: the gold mine of Freegold (Orange State-South Africa) has a shaft of about 4 km (see the external derrick pointed by the red arrow at left photo). Several tunnels departing from it serve to dig the material from the gold reef (see cross-section at right). The white rectangle (R), pointed by the green arrow, in this cross-section represents the refrigerating machinery that allows to maintain the temperature at the bottom of the shaft at 32°C, despite the fact that the surrounding rocks reach temperature of about 150°C, so the worker can operate quite comfortably. Electric generation Heating Steam One of the possible schemes of a DS:HDR power plant 4 km The final geometry of the plant will depend on the needed thermal power of the reservoir and from the thermal and geomechanical characteristics of the rocks at the chosen site.

9. DS:HDR The very preliminary hypothesis on costs and economic incomes of a DS:HDR plant with a power of 1,000 MWe give very good results (*) • Required thermal power of the HDR reservoir necessary to sustain a 1,000 MWe geothermal power plant: 7,300 MWt (with compensated decrease through the plant life). • Hot Dry Rocks to exploit: 45-50 km³ at a temperature of 270-320 °C. • Water required to act as circulating fluid: 10 million m³ at the beginning and 2-3 million m³/year to replace the losses. • Vertical shaft: 3,5-4 km long, diameter 10 m (cost 120-180 Mln €, of these 50 Mln € needed for the excavation as from the offer received from the South-African firm Cementation Mining). • Sub-horizontal tunnels: n. 5-8, diameter 4-6 m, for a total length of 36 km (290-420 Mln €). • Wells: n. 250 for a total length of 200 km (125-190 Mln €). • Others main costs: external power plant, apparatus for conditioning the shaft and the tunnels, pipelines, pump for circulate the fluid, ecc.. (400-600 Mln €). • Feasibility study: 25-30 Mln €. • Total cost for a plant: 960-1,420 Mln €. • Total investment: about 1.000-1.500 Mln €(1-1,5 Mln €/installed MWe) • Project financing design: 40-80 Mln €. • Company capital: about 20% of the total investment. • Foreseen DS:HDR plant duration: 25 years. • Feasibility study execution of the plant: 2,5-3 years. • Construction time: 8 years. • Maintenance: 0,0052 €/kWh produced. • Personnel: 100 people. • Tax (Italian condition): 4,25% for IRAP, 37% for IRPEG, DIT (Dual Income Tax) considered. • Passive interest rates: 7,2% for middle and long duration, 8,5% for short, 9,3% initial period. • Active interest rate: 6,0%. • Capital cost for the shareholder: 12,1% -12,2%. • TIR: 15,2-20,3 % (with “green” economic Italian incentives x 8 years + terminal value). • Adjusted Present Value of the project: 350-500 Mln € (*) The present calculations has been made with the help of Mr. A. Ganci

10. DS:HDR A DS:HDR power plant has other very interesting opportunities Besides the incredible more than 90% of the time availability, other possibilities could come from a DS:HDR power plant: • utilizing the thermal energy contained by the fluids after the electric generation for direct heating of civil or industrial items (10-20 billion kWht/year, for a value of several hundreds of million €/year) helping in this way in reducing the electromagnetic pollution; • utilizing the plant also for supplying peak energy, so as to have higher return (selling the kWh at higher price) from the investment; • selling the cuttings coming from the excavation of shaft and tunnels (about 2 million m3 with a value of 25-50 Mln €) If, moreover, it were possible to locate the entrance of the shaft in an already existing pit, we could get other relevant advantages: • to reduce the length and the cost of the shaft; • to utilize the cuttings excavated also from mining point of view; • to reduce to near zero the already very low environmental impact of the plant Fimistone Open Pit

11. DS:HDR Where could we realize a DS:HDR plant and what should we do first • The suitable areas are distributed all over the world (offshore areas included). For instance, only in a little part of central Italy (at the Thyrrenic side) the potentially suitable area has a total extension of about 15,000 km2. In such an area something like 250 power plants of 1,000 MWeeachcould be realized! • In the western side of U.S. the power could easily rise to a total of 3 million MWe! Mine with larch sustains type “Marciavanti” • The first step to be done is a feasibility study: it requires 2,5-3 years and about 60 experts working full time. At the end of the study, that could comprehend also surveys aimed to discover a suitable site for the construction of a DS:HDR power plant, it will be possible to chose among one of the following possibilities: 1) to go on with the construction of a pilot plant; 2) to continue the study for improving the results; 3) to decide to wait longer before passing to the industrial phase of the DS:HDR project. In any case the feasibility study, due to the highly innovative characteristics of the project, will bring relevant discoveries in the mining field to be preserved by patents. The job could be given to a society to be quoted at the stock market. • Last but not the least, the results of the surveys could reveal geological structures connected to deep regional hydrothermal reservoirs to be exploited, not reachable in other manners.