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feasibility study. Therefore, there is general reluctance of private companies to develop geothermal projects from the first phase on, due to the high cost of feasibility studies. 23. A bankable feasibility study will in many cases allow the project developer to reach financial closure with financial institutions or banks, and, simultaneously elaborate a PPA with the relevant utility company or other power consumers, stating the exact sales price for every kWh of generated power sold over a certain time span. Some countries, such as, for example the Philippines, with its unbundled and privatized power sector, focus solely on private project developers. These countries would usually offer grants to project developers in order to mitigate the exploration and drilling risks of the first project phases, while others rely on feed-in tariffs which result in a higher purchase price paid to the project company. 24. It is important for the government to review its regulatory framework and to ensure that it is conducive to incentivizing geothermal power generation, including power prices, grants and tariffs, so that the PPA and all other contracts can be done with the project developer. Additionally, the country’s institutions should be planned accordingly, focusing on building up a department which focuses on all issues related to geothermal power generation. The geothermal department should have access to well educated technical, financial and managerial staff, able to handle issues of power generation and transmission, but also regarding geology, geophysics and chemistry. Due to the costs involved in these activities, the country government usually does not commence with this extensive work until it can be reasonably sure of the existence of a geothermal resource. 25. Environmental licensing aspects must also be considered during the planning stage as the time for preparation of documents and studies can be prolonged. Agencies may not be prepared to adequately consider environmental and social impacts of geothermal projects, therefore technical assistance, policy, regulatory, and other aspects may need to be advanced in order to properly manage and plan programs. Environmental impact statements must be Figure 18: Geothermal Well Head and Silencer (Landsvirkjun, Iceland) 62PDF Image | Drilling Down on Geothermal Potential Central America
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