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Current Costs of Geothermal Power Generation in New Zealand

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Current Costs of Geothermal Power Generation in New Zealand ( current-costs-geothermal-power-generation-new-zealand )

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Assessment of the Costs of Geothermal Power Generation in New Zealand High Temperature (50 MW) Specific capital cost: Single flash < Double flash = Hybrid < ORC Electricity tariff: Single flash < Double flash = Hybrid < ORC [Range 7-11 NZc/kWh real] The ranking of the power cycle options in terms of thermal performance (gross) is quite different to the ranking in terms of financial performance. The advantage enjoyed by the binary plant options in terms of thermal performance at low temperature is not able to be translated into a financial advantage. There are two reasons for this, the first being that the binary plant options have somewhat higher plant parasitic loads which decrease their net thermal performance and thus their respective revenue streams, and although they have similar specific steam consumptions to double flash at low temperature (based on the cost assumptions made in the study), this is not enough to give them a levelised tariff advantage. Nevertheless, the range is quite close and innovative approaches to equipment marketing and financing may be enough to tip the balance in favour of one technology over the other, as can be witnessed by the market success of ORC and hybrid plants in New Zealand over the past 15 years. Double flash plants have higher specific capital costs than the single flash steam or hybrid plant options, in spite of double flash plant having good thermal efficiency at all of the reservoir temperatures examined. This is due to the greater complexity and thus cost required within the steamfield and power plant to accommodate the second stage steam flash separators and piping / instrumentation and the additional cost for fitting out a turbine with two steam inlets. It is these additional costs which penalise the double flash option relative to the single flash and hybrid options. The analysis undertaken here for the double flash option is relatively conservative. A more aggressive approach could be taken through reducing the second stage flash pressure further to generate a greater steam flow from the second stage flash step. This would improve the cost performance of this option, however, this would be at the risk of silica super saturation in the waste brine exceeding 130% with increased potential for scale deposition even with chemical treatment. The key output from the model runs are estimates of the ‘real’ electricity tariff required for each project development option for a variety of financial assumptions of which corporate tax rate, depreciation, inflation and equity content are the most important. These tariff values are equivalent 6 In this study, kWh means kWh net, delivered at the grid connection point (assumed to be the high voltage side of the power plant step‐up transformer, located at the power plant). Sinclair Knight Merz SKM Cost of Geothermal Power Report (2007 Cost Basis)R1.doc PAGE 2

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