RE: RE: Interesting article....Ram's PPA in Nicaragua is for $92 per MWhr, and its PPA's in the US at Geysers and Clayton Valley are for $98 per MWhr. The Orita PPA is not public but I assume it's in the high $90's. The plants are very economic at those rates.
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I would say geothermal breaks even at about $65 per MWhr, at least for the length of a typical 20 year project finance loan. Here's an example:
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Build a 72MW plant for a total cost of 324 million (72MW x 4.5 million per MW). Take a 20 year loan for that 324 million at 7% interest and you'll have to pay back 30 million a year. At $65 per MWhr, this 72MW plant would produce around 40 million in revenue (72MW x $65 per MWhr x 8500 hours). After subtracting 10 million for the direct cost of production and other operating expenses, there would be exactly enough to pay back the project loan.
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After the 20 year loan is paid back, all the cash flow is free and clear for however long the plant runs, so even at $65 per MWhr the economics are fine over the long-term.
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The PPA rates are much higher than the rates for natural gas plants ($30 to $50) because of renewable portfolio standards in California and Nevada. The utilities have to buy renewable power and they prefer to buy geothermal because its cheaper than solar (which needs rates around $110 or $115 to be economic) and because of its baseload characteristics.
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California and other states are signing 25% Renewable Portfolio Standards into law. Every bit of electricity Ram can produce will be sold, and at a significant premium, to satisfy those ambitious standards.