| Title | Direct Large-Scale Vs. Staged Geothermal Field Development: Evaluating Pros and Cons and the Economic Impacts for Projects in Indonesia |
|---|---|
| Authors | Daniel ADITYATAMA, Ferdino R. FADHILLAH, M. Rizqi Al ASYARI, Dorman PURBA, Nadya ERICHATAMA, Vincentius Adven BRILIAN |
| Year | 2024 |
| Conference | Stanford Geothermal Workshop |
| Keywords | geothermal, Indonesia, development scenario, project economic, risk, staged development |
| Abstract | Indonesia plans to increase the geothermal power plant installed capacity to 5,700 MW in 2030, more than double the current capacity. This accelerated development plan will put geothermal stakeholders in a dilemma, whether to directly develop the field on a large scale or staged manner. Directly developing geothermal fields on a large scale generally yields a lower overall cost per MW but will require a longer time to construct and missed opportunity to generate revenue earlier. Direct large-scale development also exposes the developers to resource risks, such as rapid production decline due to a lack of understanding of the field characteristics required for resource management. A staged development, on the other hand, can generate revenue earlier due to a shorter development duration and provides the developer time to properly assess the resource characteristics of the geothermal field to devise a proper field management strategy such as reinjection and production strategies. However, smaller staged development tends to have a higher cost per MW developed compared to direct large-scale development. Those two scenarios may have different impacts on the whole project's economics. This paper delves into the multifaceted nature of geothermal project development, highlighting the significant upfront capital required due to the inherent risks and exploration uncertainties. It examines the various phases of geothermal project development, from preliminary surveys to operation and maintenance, and explores the particular challenges faced in Indonesia's regulatory and geographical context. Through financial model simulations, it assesses the performance of different development strategies, comparing the internal rate of return across various project sizes and stages. The paper concludes with strategic recommendations for geothermal development, emphasizing the need for a comprehensive decision-making process that integrates geological and financial data to navigate the complexities of resource uncertainty and maximize financial returns. |