Geothermal handbook: PlanninG and Financing power Generation t e c h n I c a L r e p o r t 2 / 2

 
1 | Portfolio exploration
, in which the country to some extent explores and evaluates multiple
geothermal fields, thereby increasing the probability of finding at least one viable site and
reducing the chance of overlooking significant development opportunities;
 
2 | Parallel development
of the fields selected from the portfolio to reduce time and costs, and
 
3 | Stepwise expansion
, reducing the risk of reservoir depletion and pressure drops by
developing a geothermal power project in cautiously sized increments/steps, determined by
reservoir data. 
Geothermal exploration in its initial phases—i.e., surface exploration to identify potential geothermal 
opportunities—should include all or most of the identifiable geothermal reservoirs in the country/
region. This principle is most obviously applicable to all the project development phases prior to 
drilling, and may well be applicable to the test drilling phase. The inclusion of test drillings will require 
a commitment of a substantial amount of resources, particularly when the commitment is to undertake 
drillings in several locations in parallel. Therefore, the selection of fields to drill should always be 
informed—and generally narrowed down—by the results of surface exploration.
Unlike the oil and gas industry that serves the global market, demand for geothermal power is limited 
by a specific country’s/region’s minimum system demand (base load). This means that the entire 
demand for geothermal power may be met by a relatively small number of productive fields. 
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The assumption of a flat (constant) tariff for the entire operating period of the plant is made for the sake of illustrative simplicity. In the actual 
practice of projects with a long economic life, such as geothermal or hydropower, the initial tariff is often reduced over time. The repayment of 
loans, in particular, allows reducing the tariff over time and still maintaining a sufficient cash flow to generate adequate return to investors.

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G e o t h e r m a l H a n d b o o k : P l a n n i n g a n d F i n a n c i n g P o w e r G e n e r a t i o n 
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After the initial effort to consider as many reservoirs as possible, progress in geothermal exploration 
may enable better targeting of the relatively small number of the most productive or promising areas. 
Indeed, there are some examples from the World Bank practice of how the initial drilling results can 
inform decisions to redirect the resources of the next phase of the project to the most promising fields 
(Box 3.10).