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Decarbonizing Timber Drying Operations with Geothermal Energy: Red Flag Analysis for a Canadian Forestry Company

Canada / 2024 / Geothermal Consulting

A leading forestry company recognized the potential of geothermal energy to provide decarbonized heat for its kiln drying system at a facility in Western Canada. To navigate the complexities of this innovative approach, the company engaged Sproule to review a project plan from a geothermal developer. Our team conducted a Red Flag Analysis and provided strategic guidance for the next steps in de-risking the project. Leveraging insights from our multi-disciplinary experts, Sproule enabled the client to understand the associated risks and determine a clear path toward developing a commercial geothermal project in the region and decarbonizing their timber drying operations.

Project Highlights

    • Assess and characterize the geothermal resource potential
    • Evaluate the feasibility of delivering the required energy demand
    • Review planned surface facilities, CAPEX and OPEX,, and potential regulatory hurdles
    • Provide​ a strategic ​road map for continued decarbonization​

Challenge

Sparse Target Data: Despite abundant oil and gas wells in the region, there were very few nearby well penetrations to the targeted geothermal reservoir: a Cambrian Sandstone Formation approximately 3 km below the surface.

Multi-facetted Project Plan: Sproule was tasked with evaluating a comprehensive project plan, which included: geoscience data, reservoir models, well and completion design, surface facilities, preliminary economic models, and regulatory pathways to project approval.

Comparative Assessment: The goal was to inform the client’s decision-making process by characterizing the risks associated with geothermal development. This assessment enabled the client to weigh the opportunities of geothermal energy against alternative low-carbon heat sources, such as biomass.

Solution

Technical and Commercial Expertise: We assembled a team of seasoned professionals with successful track records in commercial geothermal project development, combined with regional experts familiar with the geological basin of interest.

Integrated Project Delivery: Our geoscience analysis was complemented by insights from reservoir engineering and wells engineering teams. This collaborative approach guided the assessment of planned surface facilities and informed CAPEX and OPEX estimates.

Sensitivity Analysis: We conducted sensitivity analyses to evaluate the impact of critical parameters on project success. This analysis helped to characterize and contextualize potential risks, providing a clearer picture of project viability.

Value

Comprehensive Guidance: Sproule’s independent and integrated analysis delivered interconnected insights across disciplines, giving the client a complete understanding of the project’s dynamics.

Strategic Roadmap: Identifying key uncertainties throughout the project workflow allowed Sproule to formulate tailored recommendations aimed at de-risking the geothermal development. Our guidance emphasized cost-benefit analysis and maximizing the value of information from potential data acquisition programs.

Informed Decisions: Sproule’s independent advice, supported by diligent analysis, helped the client make an informed decision regarding which strategic direction to pursue to deliver low-carbon heat energy at the project facility.




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