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 2. Recoverable output degradation 3. Unrecoverable output degradation 4. Annual unscheduled outages 5. Annual scheduled outages 6. Overhaul cycle 7. Overhaul outage 1% per year of gross capacity 0.1% per year of gross capacity 200 hours 240 hours once every three years 14 days The above factors for outages and overhauls lead to a net capacity factor of 91% over the plant life (net capacity factor is the ratio of “net delivered electricity (kWh) over the plant life” to “net capacity at Year 0 (kW) multiplied by total calendar hours over plant life”). To achieve the above, geothermal energy supply needs to be maintained at or above the normal level of plant consumption. It is thus important to ensure that spare production and reinjection capacity is provided at the outset, and production (and where, because of enthalpy changes, the amount of brine for reinjection does not diminish at the same rate as reinjection capacity may decrease, reinjection capacity) make-up wells should be drilled to provide an adequate buffer of fluid/energy supply. For this reason, the Makeup & Reinjection (M&R) well drilling schedule built into the financial analysis of project options is setup to maintain at least 10% excess steam reserve over and above full load power plant requirements. 6.9 TimingofCosts For the purposes of project analysis, the timeline in Figure 6.1 indicates a typical project programme. In terms of cash flow analysis, a project is only certain once consents have been obtained and a satisfactory construction contract has been finalised. Year zero, for project analysis is taken from the approval to proceed. Exploration, geoscience and EPC tender preparation and negotiation costs are assumed to be brought on to the books at year zero despite their earlier expenditure. Time from contract signing to commissioning is assumed to be 24 months. During this period costs are assumed to be normally distributed throughout the construction period, as detailed in the financial model output (Appendix A). M&R wells are added as previously indicated from the date of commissioning (the start of operational year 1). For accounting purposes these are expensed in the year in which they are drilled. Sinclair Knight Merz SKM Cost of Geothermal Power Report (2007 Cost Basis)R1.doc PAGE 37

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