Pricing Criteria for Steam Sale Contracts

Abstract

In many countries with exploitable geothermal resources for power generation, field, development and steam production are operated by international energy companies that sell the steam to a Public Utility operating the power plant for geothermal electric generation. The contractual framework and particularly the steam price are often controversial and prevent a wider application of this kind of arrangement. Criteria for pricing the steam or energy to be sold to a Public Utility are discussed taking into account risk and microeconomic considerations. A general formula based on the criteria discussed and applicable also to Build, Operate and Transfer (B.O.T.), Build, Operate and O w n (B.O.O.) and Build, Transfer and Operate (B.T.O.) schemes is eventually proposed.