Investment strategy of hydrothermal geothermal heating in China under policy, technology and geology uncertainties

摘要: Abstract: Geothermal energy has been considered as a new and promising source of clean heating in some areas China. However, huge initial investment cost high uncertainties policy, geology technology have seriously hindering its development. Developing effective policies strategies to attract more for geothermal is big challenge the government. Therefore, real option model was proposed find optimal strategy hydrothermal projects with average well depth 1350 m under various geological aspects. Meanwhile, an integrated Thermo-Hydrological Coupling Model developed calculate relationship between conditions economics. Nine scenarios were considering different gradient rock permeability sensitivity analysis conducted investigate effects supporting mechanisms. Based on obtained empirical results, it concluded that, (i). The framework applicable exploring than discounted cash flow method; (ii). Higher subsidy level obvious impact value but very limited timing; (iii). Technology progress flexible phase-out mechanism can effectively.