Geothermal energy costs are mainly upfront, with exploration, site development, and power station construction being major factors. However, operating costs are relatively low, making it a stable and predictable investment in a country’s energy plan. Geothermal energy also provides long-term jobs and has a low environmental impact. Exploration costs can be high, but geothermal power plants usually don’t negatively impact tourism.
The major factors contributing to geothermal energy costs are usually geographic exploration to identify a suitable site, subsequent site development, and construction of the power station. Thus, the cost of geothermal energy tends to be heavily loaded up front, with upfront development costs accounting for the majority of costs the plant will accrue over its lifetime. The subsequent operating cost of geothermal energy tends to be a relatively small percentage of the overall cost, although this depends on the country and location of the plant.
Given the significant benefits of geothermal energy, especially the sustainability of this energy source and the low environmental impact in terms of air pollution, the cost of geothermal energy can be considered a long-term investment in a country’s energy plan. This tends to be especially true for countries or localities that have certain geographic features that can enable them to benefit economically from geothermal energy. Some examples include Alaska, California, Oregon and Iceland.
In terms of costs, the advantages of geothermal energy include relatively low operating costs. There is usually no need to burn expensive fossil fuels as part of the operation, and a significant cost advantage of geothermal energy, which may be attractive to investors, is the stability and predictability of ongoing costs once the plant is geothermal is in operation. This contrasts with fossil fuel power plants, where running costs tend to be high and fluctuate with the price of fuel.
Geothermal energy costs therefore tend to be fairly predictable once a geothermal power plant is in operation. The effect on the local economy is often considered positive, as it provides a long-term, often fairly well-paying supply of jobs. An economic concern which is sometimes raised is whether the presence of a geothermal power plant will have an adverse effect on tourism in the local area. Existing data suggests that most geothermal power plants usually don’t negatively impact tourism, however. Some may even become a tourist attraction.
Cost disadvantages of geothermal energy, on the other hand, can include the relatively high costs that are usually incurred during the exploration phase of geothermal power plant projects. Exploration costs can vary considerably depending on whether or not the area under investigation is accessible. A further cost that can be extremely high in the investigation phase is that of exploratory drilling. Drilling can make a very significant contribution to geothermal energy costs, and this cost can increase dramatically if the price of concrete and steel rises.
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