The cost of geothermal energy is extremely variable because every location is different. This is based on difficulties with the land as well as the variety of capital costs. Other things that may affect cost include geology rock formation, weather conditions, transmission of energy to the power grid, land permission and ownership, and site accessibility. The most recent estimate of the building of a geothermal plant is between $2.5 and $5.4 million per MW installed capacity.
Many other variables apply to the costs of geothermal activity. The portfolio of an energy company must be investigated. While the initial price of geothermal power purchased ranges from roughly $85 to $110 per MWh, there are often price escalations from year to year (one to two percent annually.) This increase is entirely based on the possibility of the success of geothermal energy, on how much geothermal energy will benefit existing power, and how much geothermal power is going to be used.
Large companies benefit more from the use of geothermal energy than small companies. The price difference for a large company with a geothermal portfolio is much less than that of a small company owning a portfolio, which will probably cause rates to increase.
Geothermal energy is used in many ways, such as through heat pumps, hot water, and hot dry rock. Geothermal heat pumps are currently used in heating many homes. This system involves underground pipes and loops that work with a heat exchanger and ductwork.
Geothermal hot water can be found underground and is easily piped directly into facilities. Aside from hot water, it can also be used to heat buildings, grow plants in greenhouses, and for fish farming and pasteurization.
The costs of geothermal energy are not limited to finances. Geothermal power plants can affect land stability of nearby regions. This is most common when water is injected into hot dry rock. These plants also emit carbon dioxide, nitric oxide, and sulphur.
It is also possible that the site of a geothermal plant can be overutilized and cool down. If the plant is too large for the location it may overwork the site. This can be both negative for the environment and financially negative. As far as engineering aspects go, geothermal fluid is very corrosive and at a low temperature. This may affect heat engine efficiency in electric generation.
Geothermal energy can be extremely costly though there are positive aspects to the use of this renewable energy. While it is more expensive than many other renewable energy sources, it is still less expensive than the use of fossil fuels and also emits fewer greenhouse gases. It is a fast growing industry inspiring interest in many investors.