Investment cost for geothermal power plants

Abstract

Stepwise development strategy is considered a suitable method for securing a cost-effective way for the development of geothermal power plants. This strategy has been in use in Iceland for the last decade. Geothermal high-temperature fields are developed in steps of 20–30 MW. About 6 years are required for each step in the development. Parallel development of several fields in a country might be preferable, especially when a rapid increase of the generation capacity is required in that country. The capacity factor of geothermal power plants depends on the mix of power plants serving the electricity grid. Where geothermal power plants can be operated as base load, the capacity factor is usually in excess of 0.9. The investment cost of geothermal power plants is divided into the cost of surface equipment and activities and the cost of subsurface investment. The surface costs include the cost of surface exploration, and the plant and steam-gathering system, while the cost of subsurface investment is that of drilling. Surface equipment costs can be estimated with the same accuracy as other construction works at the surface (buildings, roads, bridges), whereas higher uncertainty might be associated with the cost of drilling. Analyses of the surface costs of five power plants in Iceland show that the investment cost of the surface equipment is linear with size, in the range 20–60 MW. Surface costs were found to be about 1000 USD/kW with a relative error of 10%. Stefánsson (Stefánsson, V., 1992. Success in geothermal development. Geothermics 21, 823–834) published a statistical study of the drilling results in 31 high-temperature fields in the world. Using these results, it is possible to estimate the expectation value and its limits of error for the subsurface investment in an arbtitrary geothermal field. The results obtained for the range 20–60 MW are summarized as follows: Expectation value Range within one standard deviation USD/kW USD/kW Surface cost only 977 762–1192 Total cost in a known field 1267 1062–1692 Total cost in an unknown field 1440 1122–1992