Game Theory-based Economic Analysis and Incentive Mechanism of Complex Geothermal Energy

Abstract

Geothermal energy is a key clean energy in China that can be applied in heating, hot springs and aquaculture. However, the recovery of geothermal energy depends heavily on electricity, the market is narrow and the initial investment is very high. Focusing on the geothermal energy development in Beijing, China, this paper applies the game theory to analyze the economy of complex geothermal energy and designs the economic incentive system for geothermal energy. Specifically, the energy analysis and thermoeconomic analysis methods were designed for geothermal energy system, in the light of the thermodynamic laws. The investment cost, specific negative entropy cost and comparable irreversible cost of geothermal energy recovery were examined in details, revealing that the recovery of geothermal resources needs the least investment in Miyun, Haidian and Fangshan, and that Changping has the smallest relative cost difference and energy economics factor in Beijing. In addition, economic incentive measures were put forward, including both tax incentive and financial subsidy. The research findings lay the theoretical basis for expanding the development and utilization of geothermal energy.