Economic Analysis of Steam Production at the Geysers Geothermal Field, California

Basic Information
Author: Brown, P.J., Henneberger, R.C., and Sanyal, S.K.
Description:This paper investigates the economics of steam production at The Geysers from the point of view-of a field developer. We present a cash-flow analysis and the calculation of several profitability criteria for steam supply to a hypothetical 55 MW (gross) power plant starting in 1989. This paper assesses in two parts the economics of developing the steam supply: (1) a deterministic economic analysis to establish the sensitivity of the profitability criteria to steam price where each parameter is given a unique value, and (2) a probabilistic analysis to estimate the profitability criteria, and their sensitivity to steam price, when uncertain parameters are allowed to vary. The results of the study indicate that no new commercial project is economically feasible at The Geysers unless the steam price exceeds 2 cents/kw-hour,because of long payout and extremely low profitability. Only a steam price exceeding 2.7cents per kw-hour ensures a reasonably short payout time and the minimum profitability typically expected by field developers. Above a steam price of 3 cents per kw-hr, the economics of field development are attractive and risks are low.The accelerated decline in well productivity in recent years has increased risks and reduced profitability.
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Author Contact Information
Distributor Contact Information
Organization Name: Arizona Geological Survey
Street: 416 W. Congress St. Ste. 100
City: Tucson
State: Arizona
Zip: 85701
Phone: 520-770-3500
Geographic Extent
North Bounding Latitude: 38.9943842711
South Bounding Latitude: 38.4802127544
East Bounding Longitude: -122.550261585
West Bounding Longitude: -123.280852405