Cost-Benefit Analysis of Geothermal Energy

For efficient implementation of the energy transition in the built environment, it is important to take into consideration the pros and cons of different alternatives for heat and cold. When soil energy is considered in policy practice, the emphasis is often on potential soil risks. There is currently no clear quantitative framework for policies that consider where soil energy can be applied (no or low risk) or where it cannot (higher risk). At the request of industry association Soil Energy Netherlands, CE Delft has prepared a social cost-benefit analysis (MKBA) which outlines the integral perspective of the application of open and closed soil energy (OBES and GBES).

For the purposes of this MKBA, different heating and cooling technologies were compared at the building level, showing direct, indirect and external effects. This included comparing investment costs, energy consumption, CO2 emissions, refrigerant leakage, impact on the power grid and soil risk.

Several conclusions emerge from the MKBA:

  • In most cases, soil energy provides the most positive MKBA result
  • Urban heat island effects, noise pollution and soil are not yet quantitative (more research is needed to monetise these effects)
  • In general – while taking into account both the quantitative and qualitative outcomes in this MKBA – we expect that, provided local conditions are taken into account and the construction and management of soil energy systems is done carefully, the potential soil risks are not expected to outweigh the benefits to Dutch society.

External effects important for integral consideration