This paper presents an analysis of the sensitivity of the cost of geothermal power to: (a) capital cost; (b) operations-and-maintenance (O&M) cost; (c) make-up well drilling cost; (d) resource characteristics (well productivity and its rate of decline); (e) development and operational options (installed plant capacity, number of years of make-up well drilling, and project life); and (f) macro-economic climate (interest and inflation rates). The power cost here represents levelized cost (in cents per kilowatt-hour) over the project life, the capital cost being amortized over 30 years; any royalties, tax burden, or tax credit are ignored. A range of development sizes, from 5 to 150 MW, is considered. The economy of scale in both capital cost and O&M cost, as well as the higher productivity decline rate due to increased installed capacity, are taken into account.

This paper derives the relation between productivity and pressure decline trends in a geothermal steam reservoir. At all stages of a geothermal project, the economics is affected by the rate of productivity decline. The rate of pressure decline becomes a critical issue when the reservoir pressure declines to the point that wells have to be flowed wide open to supply the turbine; at that stage, maintaining reservoir pressure and well productivity by redistribution and/or augmentation of injection becomes a stratcgic issue in field management. Therefore, the issues considered in this paper have significant practical implications.