A significant part of a recent workshop sponsored by the Electric Power Research Institute (EPRI 1978) was devoted to the question of the risks of geothermal development and the need for a geothermal reservoir insurance program. In this workshop, several viewpoints regarding the adequacy of the available measures for reducing financial risks to the developers and users of geothermal energy were discussed. of agreement among the authors was the existence of risk in geothermal development, and that some method for reducing the financial risks to the developers and users of geothermal energy was necessary for accelerated development of this resource.

Several schemes were suggested to reduce the financial risks to the users of geothermal energy and the financial institutions responsible for extending loans for geothermal industrial projects. The suggested schemes included the following (Aidlin 1978; Falick 1978) : 0 contractual arrangements between the resource company and the user that would place the riskof reservoir loss on the supplier, or apportions the risk between the supplier and user 0 enactment of state legislation that would require regulatory agencies such as the Public Utilities Commission (PUC) to treat, for tariff base purposes, the first power plant as an RED facility eligible for accelerated depreciation 0 construction of "turn-key" power plants built by companies willing to assume financial risk in exchange for a guaranteed rate of return generated through the sale of electricity to utilities 0 use of the existing Geothermal Loan Guarantee Program that allows a participating utility to repay the debt through government assistance 0 encouragement of private industry to provide coverage for the risks of geothermal development.

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Copyright 1980, Stanford Geothermal Program: Readers who download papers from this site should honor the copyright of the original authors and may not copy or distribute the work further without the permission of the original publisher.