The Basic Costs of Geothermal
Posted on December 18th, 2007 by Lawrence Molloy
From Economist Yoram Bauman, extracting from the DOE’s data and reports. According to DOE’s Energy Efficiency and Renewable Energy section FAQ on geothermal. (link is <http://www1.eere.energy.gov/geothermal/faqs.html>)
Q: How much does geothermal energy cost per kilowatt-hour (kWh)?A: At The Geysers, power is sold at $0.03 to $0.035 per kWh. A power plant built today would probably require about $0.05 per kWh. Some plants can charge more during peak demand periods.[Note that the $0.05 per kWh estimate looks pretty optimistic in light of the data below and elsewhere.]Q: What does it cost to develop a geothermal power plant?A: Costs of a geothermal plant are heavily weighted toward early expenses, rather than fuel to keep them running. Well drilling and pipeline construction occur first, followed by resource analysis of the drilling information. Next is design of the actual plant. Power plant construction is usually completed concurrent with final field development. The initial cost for the field and power plant is around $2500 per installed kW in the U.S., probably $3000 to $5000/kWe for a small (<1Mwe) power plant. Operating and maintenance costs range from $0.01 to $0.03 per kWh. Most geothermal power plants can run at greater than 90% availability (i.e., producing more than 90% of the time), but running at 97% or 98% can increase maintenance costs. Higher-priced electricity justifies running the plant 98% of the time because the resulting higher maintenance costs are recovered.
This from an MIT study, p. 6-3 <http://www1.eere.energy.gov/geothermal/future_geothermal.html>.
Exploration, production, and injection well drilling are major cost components of any geothermal project (Petty et al., 1992; Pierce and Livesay, 1994; Pierce and Livesay, 1993a; Pierce and Livesay, 1993b). Even for high-grade resources, they can account for 30% of the total capital investment; and with low-grade resources, the percentage increases to 60% or more of the total.[It's also clear from this study that researchers expect costs to fall as we learn more about the technology, etc.]
These two figures from the Energy Information Administration’s Annual Energy Outlook: once again demonstrating geothermal’s solid placement vis-a-vis the other low-carbon, climate-friendly options.
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