Simulating Financial Aspects of Geothermal Power Plant Investment
- Key words
- Economics; Power Plant; Capital Investment; USA; High Temperature; Risk Reduction; Power Plants; Cost Model; Cash Flow; Tax Incentive; Loan Guarantee; Conversion; Rate of Return; CONSAD Research Corp; US DOE
- Conference
- Geothermal Resources Council Transactions
- Year
- 1979
- Session
- Computer modeling; Economics; Risk management; Financing; Po
- Language
- English
Abstract
Geothermal resources appear to be an important addition to future electric power sources, yet their development has been slow, due to uncertainty of their commercial potential. Reduction of the risk due to uncertainty appears necessary for development. Strategies to reduce this risk should be based on the efficacy and interaction of policy instruments available to the government. The first phase of planning risk reduction should be the study of the effect on financial aspects of a hypothetical geothermal power plant of the available instruments. The model presented herein describes cash flow and investment status of a power plant, given various levels of government support - either by tax abatement or loan guarantee.
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