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Geothermal power generation project CAPEX for Chile estimated at $4.4m/ MW

Cerro Pabellon geothermal power plant, Chile (source: ENAP)
Alexander Richter 8 Apr 2020

The National Energy Commission of Chile has released its annual report on capital cost of energy development, estimating a capital expenditure cost for geothermal power development at around USD 4.4 million per installed MWe.

As reported by our Spanish language portal PiensaGeotermia, the National Energy Commission of Chile published in March 2020 the “Report on Costs of Generation Technologies”, where geothermal technology is determined with a CAPEX of USD 4.4 million per MW, down 25% compared to the report for the year 2019 .

The National Energy Commission of Chile published the annual report called “Generation Technologies Cost Report” which is intended to comply with Article 162 of the General Law of Electric Services, must determine a program of generation and transmission works for the National Electric System, which minimizes the updated total cost of electricity supply, that is, the sum of the updated expected costs of investment, operation and rationing in the short-term node pricing process. This works program determines the operation of the electrical system for the purposes of calculating marginal costs that give rise to basic energy prices.

The cost study was developed during the year 2019 and is published in March 2020.

As far as relevant, coal-fired thermal power plants are not considered, in accordance with the de-carbonization plan of Chile, announced on June 4, 2019 and updated to December 9, 2019. This gives a clear signal that is not expected in the future the construction of new coal plants. Undoubtedly, this signal must be included in the bidding process for the supply of electricity to regulated customers in Chile, an issue still pending.

Report Results – CAPEX Geothermal

The report looks at flash and binary technologies, and results range from $ 4,321 to $ 6,822 / kW. The figures for all technologies are shown below.

For the purposes of determining a referential CAPEX for each technology, in the case of geothermal projects, a CAPEX of USD 4,394 / kW is determined.

In addition, the report includes information on projects in development with CAPEX associated with them. In the case of geothermal energy, the reference should be the 30 MW expansion of the Cerro Pabellón project, where the indicated figure does not include the infrastructure costs required to enable the site (roads, wells, transmission lines, among others). The CAPEX of the geothermal project under development is USD 3,173 / kW.

The Association of Renewable Energies and Storage, ACERA, published a comparative table between the figures reported in 2019 versus those updated in 2020, where it is seen that geothermal technology shows a decrease of 25% in the CAPEX unit.

As for Variable Generation Costs, which are directly related to energy production, geothermal technology has no assigned cost in this category.

Fixed Operation and Maintenance Costs are valued between 2% – 3% of the investment cost in the case of geothermal projects.

To download the report, check this link.

Source: CNE, comunicado ACERA, via PiensaGeotermia