Feasibility of shallow geothermal energy for industrial heating using high-temperature heat pumps in Sichuan Province, China

Abstract

Industrial energy consumption plays a pivotal role in the global energy landscape and offers considerable potential for carbon emission mitigation. The integration of shallow geothermal energy, which is widely distributed and easily accessible, with high-temperature heat pump technology presents a viable solution for industrial heating applications requiring temperatures below 100 $°$C. This study investigates the feasibility of utilizing shallow geothermal energy and existing oil and gas wells for industrial process heating in major cities of Sichuan Province, China. Through a comprehensive analysis of low-temperature industrial heating demand, shallow geothermal energy potential, existing well resources, and project economic benefits, the study reveals that a substantial low-temperature industrial heating demand of approximately 116.3 million GJ (3.97 million tons of standard coal equivalent (tce)) in the study area. Sichuan Province possesses significant exploitable shallow geothermal energy resources, estimated at 410.3 million GJ (14 million tce), along with 10,000 oil and gas wells and thousands of abandoned wells, which collectively can satisfy this demand. Economic analysis indicates that the Levelized Cost of Heating (LCOH) for shallow geothermal projects is 0.057 USD/${\text{kWh}}_{\text{th}}$ (0.400 CNY/${\text{kWh}}_{\text{th}}$), while existing well projects demonstrate a lower LCOH of 0.039 USD/${\text{kWh}}_{\text{th}}$ (0.271 CNY/${\text{kWh}}_{\text{th}}$), both slightly higher than natural gas boiler costs. The economic assessment shows that shallow geothermal projects can achieve a maximum Net Present Value (NPV) of approximately 1.01 billion USD (7.08 billion CNY), whereas existing well projects can reach up to 11.92 billion USD (83.45 billion CNY). The Dynamic Payback Period (DPP) analysis reveals that all existing well projects achieve payback within 1 year, while shallow geothermal projects show payback periods ranging from 7 to 14 years. These results substantiate the technical and economic feasibility of implementing shallow geothermal energy and existing well systems for industrial process heating. This model demonstrates significant potential for replication in other urban areas, offering dual benefits of economic advantages for industrial operations and substantial contributions to achieving national carbon neutrality objectives.