The Tatun Volcano Group (TVG) is a typical multi-vent volcano group covering an area of approximately 400 km2 on the northern tip of the island of Taiwan. The TVG is composed of more than 20 Quaternary-age volcanoes, enclosed by NE-SW trending faults such as the Chinshan, Shanchiao and Kanchiao faults. The TVG is seen as a promising target for geothermal exploration due to its abundance of surface thermal manifestations associated with young volcanic rocks. There are four explored thermal areas in the TVG: Tahuangtsui, Matsao, Szehuangtzeping and Jinshan. A series of geothermal exploration studies have been carried out in these thermal areas since the 1960s including geologic, geophysical and geochemistry surveys. In addition to surface exploration data, ITRI and CPC have drilled more than 20 exploration wells (with total depths [TDs] that generally exceed 500 meters) and more than 62 shallow temperature gradient wells (with TDs generally less than 500 meters). Some of these exploration wells encountered commercial temperatures ranging from 200 to 300°C; however, they also encountered very acidic fluids which corroded casings and wellheads.

The basement of the TVG is composed of Tertiary sedimentary rocks. The Wuchihshan Formation (consisting mainly of thick beds of well-consolidated sandstone intercalated with siltstone and shale) is thought to be the primary basement unit beneath the TVG area. Porous sandstones of the Wuchihshan have been described as hosting the reservoir that feeds the Tahuangtsui and the Jinshan hot spring areas. Unconformably overlying the Tertiary formations are the Tatun volcanic rocks, which consist of lava flows (andesites), pyroclastic breccias, surges, tuffs, lahars and reworked volcaniclastic rocks. More than 15 lava layers have been identified. Most of the andesite lavas are thick and dense; unless highly fractured they are characterized as poor reservoir rock. A series of NE-SW structures within the TVG area appear to be associated with the location of some geothermal manifestations within the area. The TVG area is also transected by NW-SE and N-S trending faults, some of which are also associated with geothermal manifestations.

The TVG area is a tectonically active region that has transitioned from a zone of tectonic compression to one of crustal extension. In principle, a graben structure in this setting would be an area of crustal thinning favorable to crustal magmatic intrusion, providing a heat source for the formation of geothermal systems. Major circulation losses observed in wells drilled in the Matsao area are associated with permeable faults. Open fractures in an exploration well in the Szehuangtzeping area identified from wireline logs and core samples are interpreted to represent a dominant NE-SW strike orientation with steep dip magnitudes; these might represent damage zones around specific faults; however, they could also be due to long-lived tectonic activity that has created fractures in competent units (e.g., andesite lavas).

One key aspect of the TVG geothermal system is the presence of corrosive fluids with very low pH (with produced fluids from some wells measuring < 2), indicative of significant volcanic contributions to the system either as input from magmatic fluids or through interaction with sulfur-rich rocks. Elevated helium isotope ratios measured in fumarole gas samples from the TVG indicate a significant magmatic gas component. Because the quartz-rich composition of the permeable sandstones of the Wuchihshan Formation are not effective in neutralizing acidic fluids, a focus instead could be on using the neutralizing capacity of the overlying volcanic rocks (particularly andesites) by completing production wells within these units. This can initially include a focus on areas of the field where andesitic rocks are fractured and are of suitable thickness that may allow access to commercial temperatures and less acidic fluids (e.g., the Matsao and Szehuangtzeping thermal areas).