The geothermal power industry (globally) faces the challenge of not having access to quality economic data. With the current effort to implement more renewable energy in the United States and abroad, policy makers need dependable data to make informed energy decisions. Levelized cost of energy (LCOE) is a common metric used when considering energy solutions. However, because of the unique relationship of surface and subsurface variables required to make each geothermal project economically viable, it is difficult to estimate the cost of installing new projects. The best known pricing data is in the form of power purchase agreements (PPAs) between geothermal companies and public power providers; PPAs outline an initial purchase price, a price escalation rate, the duration of the agreement, and capacity of energy purchased. This paper presents an analysis that can estimate a range of LCOE values for existing geothermal power plants based upon both publicly available information and direct industry data for individual PPAs. This economic data was collected from a variety of primary, secondary, and tertiary sources. The applied basis for this analysis is borrowed from the National Renewable Energy Laboratory’s (NREL’s) System Advisory Model (SAM) that establishes a direct and calculable relationship between a known PPA and the subsequent LCOE estimate. The formula equates the LCOE of a project by dividing the sum of annual discounted income, found in the PPA, by the sum of annual discounted energy output. As reported, the formula was intended to find a minimum PPA that would cover a known LCOE and balance the project economics. Using the same quantitative theory as used in NREL’s SAM, this analysis assumes that the average lifetime PPA price is only equal to the project LCOE when a profit margin is built into the calculation delta. The goal of this analysis is to provide an alternate method of estimating LCOE for decision makers and to validate cost calculation in conjunction with traditional methods of LCOE analysis such as the Geothermal Electric Technology Evaluation Model (GETEM) used by the Department of Energy (DOE).

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