Financial and Technical Feasibility Study of the Low-Enthalpy System ''La Jolla'' Baja California Mexico

Abstract

This study describes a financial analysis of the low-enthalpy geothermal system "La Jolla", located in Baja California, Mexico, based on both reconnaissance and technical studies. The technical feasibility study began with the system exploration to estimate the electric power generating potential using the heat in place model with a Monte Carlo simulation. The calculated energy output was 1 MWe for a 25 year period. Based on both the calculated energy and the physical characteristics of the site, a binary cycle plant was chosen for electricity generation. Profitability was calculated using Net Present Value and Internal Rate of Return. The project risk was obtained from the sensibility analysis of all variables used in the financial parameters calculation. The highest effect on risk comes from tariff price, on the other hand, the lowest effect corresponds to drilling. Projected income was estimated to be 47,000.00 USD per year, requiring an initial inversion of 615,000.00 USD. The time of return of 15 years was calculated, using a 6.8% of interest rate with a 60% private and 40% government investment frame. The NPV was positive, IRR was 10%, greater than 6.8%; therefore, the project may be considered as profitable.