the problem with geothermal, page-9

Just a quick look back at the specific advantage that the high temperatures offer GDY. I have basically just cut, paste and altered this from the GRK thread (it may seem a little choppy), but it applies to all geothermal enterprises, and discusses the impact of the thermal gradient on surface effeciency.

The costs for the production are almost entirely based on intitial capex, with ongoing opex being low, and fuel costs being negligable. The $/MWh is largely derived form how many electrons you can squeeze out of a fixed cost well/power plant. A higher temperature allows for the production of more electrons per dollar spent on capex/opex.

An example is outlined below, using GRK as a case study, though the logic applies broadly across the industry.

(The ratio of MWthermal:MWelectric is a standard calculation designed by the Massachusetts Institute of Technology, and are where I base my calculations from. All other details are derived form the companies themselves.)

At 210C (the reasonable and expected final target for GRK), there will be roughly $85/MWh in electricity costs. On top of this, there will is about $5/MWh operating costs (using GDY's figure, which should be fairly constant across operations). This is a total of $90/MWh. Transmission costs will be minimal enough not to include in a price calculation.

This price is not competitive with nuclear, the other realistic option for sustainable base-load energy production.

For comparison, GDY, who have a temperature target of 270C-290C, will be able to produce the electricity much cheaper and more competitively. From 210C to 270C, there is in increase in power output of over 100%. It will cost GDY roughly $40/MWh in electricity costs, $5/MWh in operating costs, and $8 in transmission costs, for a total of $53/MWh. Using a figure of 290C brings this total down to around $45/MWh.

Essentially, capex will be the same across the board, as will opex. The calculations above ONLY take temperature into consideration. The do not even allow upside/downside for flow rates, reservoir volume, reservoir surface area, natural saturation, etc.

To say GDY will ONLY produce electricity 50% cheaper than the nearest competitior assumes the competitor establishes a project with the same world-leading characteristics as the Habanero project. The probability of such a resource being repeated are low, and, as such, to say GDY will produce electrons for 50% cheaper is quite a conservative statement.

On top of the natural geological advantage, there is of course the Kalina Cycle, and the further increase in efficiency that may be upwards of 20%. This has not been used in calculations simply to outline the quality of the geothermal resource itself.

These facts are not hidden from the market.

Cheers