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Assessment of the Costs of Geothermal Power Generation in New Zealand 6. Cost Assumptions The following cost assumptions have been made in building up an overall definition of geothermal capital and operating costs for the development scenarios detailed in the previous chapter. 6.1 Establishment Costs A total of NZD 3.0 million has been allowed for establishment costs associated with a 20 MW development, and NZD 3.5 million for a 50 MW development. These costs include: Permitting Land acquisition Geoscientific / Environmental Well Testing Civil works and Infrastructure Site Operations, and Pre Feasibility/ Feasibility Reports. 6.2 DrillingCosts Well drilling costs can vary significantly depending on the depth and size of wells to be drilled, the capability of the rig, the number of holes to be drilled (which allows rig mobilisation cost to be shared over a number of wells), topography and site access generally, and the drilling conditions encountered. Well costs as given in Table 6-1 are assumed. Given the level of these costs the drilling of wells with large well outputs is clearly advantageous to project economics. The high level of drilling costs also emphasises the importance of achieving the highest possible drilling success rate throughout exploration, delineation and production drilling programs. The need for thorough geoscientific work at the pre- drilling phase and throughout later drilling is thus evident. This can be highly cost effective because of the low cost of scientific work compared to the high cost of drilling. It is important to note that well drilling costs have increased considerably over the last few years and upward movement in the cost of drilling rigs and drilling equipment continues. This is discussed in more detail in Section 7.3. Sinclair Knight Merz SKM Cost of Geothermal Power Report (2007 Cost Basis)R1.doc PAGE 25PDF Image | Current Costs of Geothermal Power Generation in New Zealand
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