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The estimates of total installed costs for the remaining geothermal resources in the United States, show a very large range from around USD 1 500/kW to figures beyond USD 10 000/kW (Augustine, 2011). Much of this supply curve for the United States is not economic and does not represent typical geothermal project costs, but it does show the importance of identifying the best geothermal reservoirs and geothermal resources for project development. Cost ranges for small‐scale low‐ temperature resource binary plants are therefore likely to have a wider range than those typical for excellent geothermal reservoirs and resources, and might have typical costs in the range USD 5 000 to USD 10 000/kW. 9.2 THE LCOE OF GEOTHERMAL POWER GENERATION The LCOE of a geothermal plant is determined by the usual factors, such as installed costs, O&M costs, economic lifetime and the weighted average cost of capital. However, the analysis for geothermal is a more dynamic question than for some other renewables. One complication is a larger uncertainty in project development, due to the risk of poorly performing production wells. Similarly, over the life of a project, reservoir degradation can play an important role in costs (since additional production wells will be required) and in performance (lower output while remedial measures are taken). These factors tend to introduce greater uncertainty into the development of geothermal projects and may increase financing costs, compared to technologies such as wind. However, this uncertainty factor is typically manageable in mature geothermal markets where financing institutions have previous experience with the industry. Assuming a 10% cost of capital, a 25‐year economic life, O&M costs of USD 100/kW/year, a capacity factor of 90% and the capital costs outlined in section 9.1, the LCOE of geothermal plant can vary between as little as USD 0.03/kWh (Figure 9.4) for second‐stage development of a field, to as much as USD 0.10/kWh for greenfield developments. However, taking into account poorer than expected field performance can mean that costs can rise to as much as USD 0.14/kWh if investment costs are at the high end of the range and average capacity factors are 20% lower than assumed. 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0.00 0 50 100 150 200 250 Project size (MW) FIGURE 9.4: THE LEVELISED COST OF ELECTRICITY OF GEOTHERMAL POWER PROJECTS IN CHILE, INDONESIA, KENYA, MEXICO AND THE PHILIPPINES SOURCE: IRENA RENEWABLE COST DATABASE. 76 Renewable Power Generation Costs in 2012: An Overview 2011 USD/kWh

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