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Assessment of the Costs of Geothermal Power Generation in New Zealand In a regulated electricity market, where a known and fixed Year 0 tariff must often be set as an enabler for bankability of an investment, tariffs can either be set by letting the market decide through a tariff bidding process or by determining the tariff through agreement on cost inputs (capital, operating and maintenance) and fixing the after-tax real internal rate of return on the capital inputs. Therefore it should not be assumed that the target after-tax real internal rate of return on 100% equity used in this study would be appropriate in other electricity markets, regulated or de- regulated, elsewhere in the world. Each market and electricity generation technology in that market has its own set of risks, uncertainties and competitive tensions, and that market should decide the approach to take to enable electricity development within this context. Sinclair Knight Merz SKM Cost of Geothermal Power Report (2007 Cost Basis)R1.doc PAGE 59PDF Image | Current Costs of Geothermal Power Generation in New Zealand
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