Title: Geothermal power plant projects in Central America: Technical and financial feasibility model assessment

Abstract

The geothermal resource potential makes the Central American region a prime candidate for
investment in electricity power plant projects. In this study, the technical and financial feasibility of
developing geothermal power plant projects in Central America is conducted. Three thermodynamic
models of two groups of conventional power plants are evaluated for a range of possible values of
geothermal resource temperatures (100-340°C) and mass flow rates (100-1,000 kg/s) in order to
examine multiple expected scenarios. The main results are presented as contour maps of the internal
rate of return (IRR) of free cash flow to equity (FCFE), net power plant output and the probability of
success of accomplishing the minimum rate of return required by private investors. By using these
maps, geothermal developers, who already characterize the quality of resources for geothermal
projects, could identify technically and financially viable projects in terms of temperature and mass
flow rate, taking into account the assumptions and limitations considered in the models. The results
indicate that the geothermal power plant’s size, profitability indicators and the probability of success
of geothermal power development arise from an increase in the temperature of the geothermal
resource and mass flow rate. As a result, geothermal power development projects in Central America
for a small power plant are not attractive to private investors, when taking into account the project’s
cost of exploration and confirmation, drilling of an unknown field, and construction of the power plant
and transmission line.