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Development of geothermal projects 9. Development of geothermal projects is a complex process and involves seven key phases of project development. Because of the high risks and costs involved in the early phases (as discussed below), project developers will need to decide after each phase whether to continue the development. The first three phases are part of project exploration, from early exploration initiatives, to on-site scientific research and test drillings. These activities will confirm or deny the existence of a geothermal reservoir suitable for commercial development. If the results from the first three phases are positive and the geothermal potential is confirmed, phase 4 is initiated with the design of the power plant, including feasibility study, engineering design and financial closure. Phases 5 to 7 involve the actual development of the project, including the drilling of geothermal wells, construction of the pipelines, power plant and its connection to the transmission system, as well as startup and commissioning. A typical full sized geothermal project will take approximately five to seven years to develop. The development could be shortened or prolonged by several years depending on the specific geological conditions, the institutional and regulatory framework under which the project operates, and financing requirements. Characteristics of geothermal energy 10. Geothermal energy has several characteristics that make it appealing for power generation. Geothermal power plants provide base load power with a high capacity factor; modern geothermal power plants can have a capacity factor of 90 percent or higher. They are also an ideal complement to hydroelectric power whose load-following capability allows a power system to serve peak loads. Once a geothermal power plant is up and running, there is little need for fuels, which contributes to low operation and maintenance costs. The multiple uses of geothermal resources, including for power generation, industrial heat, tourism, and agricultural production, can enhance the economics of geothermal projects. 11. Some of the drawbacks of geothermal energy are associated with characteristics of the resource itself. Field depletion is a risk which can be mitigated by designing the geothermal development carefully in order to extract energy at a rate which can extend the useful life of the resource to generate for many years; depending on characteristics of the field, additional wells may have to be drilled every few years (at a significant cost) to sustain the production rate. Additionally, there may be temperature drops of the steam being extracted which can impair the ability to deliver the rated capacity of the power plant. 12. The energy generation costs of geothermal plants are generally low in comparison to other renewable energies. The levelized generation costs for geothermal power range from US$ 40-110 /MWh, meaning it can also be cost competitive with large hydro and thermal generation technologies, as is the case for Central America. 13. The potential environmental and social impacts of geothermal plants are generally small and compare favorably to fossil fuel technologies as well as other types of renewable technologies (Table 2). 4PDF Image | Drilling Down on Geothermal Potential Central America
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