COST OF GEOTHERMAL POWER
In common with many renewable resources, geothermal power generation involves a high capital outlay to establish the facility but extremely low fuel and operating costs. In the case of a geothermal plant there are three initial areas of outlay, prospecting and exploration for the geothermal resource, development of the steam field, and the cost of the power plant itself.
As already noted, the cost of identifying a suitable geothermal reservoir is likely to be several million dollars and may not always be successful. If the resource that is found then turns out to be small this will create a much heavier burden on the project than if the resource is large. Steam field development will depend on plant size and will generally be priced out according to the number of boreholes that are to be drilled. For example, the Hellisheidi geothermal power plant in Iceland, with a generating capacity of 300 MW, has 50 boreholes.
The capital cost of building a power plant to exploit a geothermal resource will depend on the quality of the resource. A good resource will have a temperature above 250 oC and good permeability of the reservoir, so it will provide a good fluid flow. Ideally, it will provide either dry steam or steam and brine, the latter being relatively noncorrosive and with low gas content. For good- quality resources of this type today the lowest cost in the United States is around
$2400/kW according to the U.S. Energy Information Administration (EIA). Similar costs in Europe are !3000–4500/kW. The lowest cost will be for a plant of more than 30 MW with smaller plants being relatively more expensive to build.
A poor-quality resource will have a temperature below 150 oC, or it could provide fluid at a higher temperature but with some other defect such as corrosive brine or poor fluid flow. Resources of this type will generally only be capable of supplying heat for a small geothermal plant of less than 5 MW and the capital cost could be up to twice that of a large facility based on a good resource.
Further indirect costs will be incurred, depending on the location and ease of access of the site. These will vary from 5% for an easily accessible site and a local skilled workforce to 60% of the direct cost in remote regions where skilled labor is scarce. All these costs will be part of the initial investment required to construct a plant.
The cost of electricity from the geothermal plant will depend primarily on the capital cost of building the plant and the cost of financing the construction. There is also the potential for an additional cost resulting from a local rent for exploiting the resource but that is rare. European estimates put the levelized cost of geothermal electricity at !40–100/MWh. In the United States the EIA has estimated that the cost of energy from a new geothermal plant entering service in 2017 is $100/MWh. These levelized costs make geothermal power competitive with virtually all other forms of power generation.