| Title | A Probabilistic Cost Model with an Application to a Geothermal Reservoir at Heber, California |
|---|---|
| Authors | Ziman, G. Michael; Campbell Jones, Sue; Orren, Lowell H. |
| Year | 1981 |
| Conference | Geothermal Resources Council Transactions |
| Keywords | Economics; USA; California; Heber; Risk; Project Assessment; Uncertainties |
| Abstract | A financial accounting model that incorporates physical and institutional uncertainties has been developed for geothermal projects. Among the uncertainties it can handle are well depth, flow rate, fluid temperature, and permit and construction times. The outputs of the model are cumulative provability distributions of financial measures such as capital cost, levelized cost, and profit. These outputs are well suited for use in an investment decision incorporating risk. The model has the powerful feature that conditional probability distribution can be used to account for correlations among any of the input variables. The model has been applied to a geothermal reservoir at Heber, California for a 45 MW binary electric plant. Under the assumptions made, the reservoir appears to be economically visible. |