Geothermal Costs of Capital: Relating Market Valuation to Project Risk and Technology

摘要

Access to financing has frequently been noted as a barrier to geothermal project development, due to the high perceived risk during exploration and drilling. However, little information has been made available to ascertain the costs of capital at stages of geothermal project development, and the sensitivity of these financing changes to the overall economics of a project. While financing is in large part related to the creditworthiness of the counterparty, this study seeks to uncover relationships between resource-associated risks and variations in cost of capital with project advancement. This study primarily focuses on summarizing the current "business as usual" costs of capital and proposes scenarios for future financial projections to support modeling of energy technology economic competitiveness in the U.S. Department of Energy's GeoVision Study. Ongoing work will refine a model relating improved market costs of capital presented herein to assumed improvements in project risk.