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

T A B L E 1 . 7
Observed Indicative Power Generation Costs in 2010 
COUNTRy
PROJECT AND / OR SIZE
US$ PER KWh
COMMENTS
Costa Rica
4 projects total 200 MW
US$ 0.04 - 0.05
Figures from ICE
1
Philippines
Existing total 2,000 MW
US$ 0.04 - 0.055
Privately owned, but mostly built by 
public companies and then privatized. 
Own estimate built on utility power 
purchase price
Indonesia
Total 1,000 MW
US$ 0.045 - 0.07
< US$ 0.097
Estimate built on study
2
Tariff ceiling set by government
Ethiopia
Planned 35 MW plant
US$ 0.05 - 0.08
Estimate
Kenya
Existing 130 MW units
Planned 280 MW in 4 units
US$ 0.043 - 0.064
< US$ 0.08
KenGen’s Expansion Plan 2008
3 
Tariff ceiling set by government, but 
10-20% lower according to Kenyan 
sources
4
Iceland
500 MW in large units
US$ 0.03 - 0.05
Estimate
5
; Power sold to aluminum 
companies for contract price
Mexico
960 MW in total
US$ 0.08
Average costs for all units
6
Notes | 
1
 P. Moya 2009; 
2 
World Bank Study 2010; 
3
 Simiyu; 
4
 Business Daily 2010; 
5
 Johannesson 2011; 
6 
Quijano 2010. 
Source | Authors.
The cost figures in Table 1.7 are similar to those obtained in a 2007 ESMAP study, in which average 
LCOE was calculated as US$ 0.0427 per kWh for an investment of around US$ 2.6 million per MW 
installed. A recent United Nations Environment Program (UNEP) report (2009) indicates that in 2008, 
US$ 2.2 billion was invested in geothermal energy development—the highest among renewable 
energy technologies and up 149 percent from 2007. According to UNEP, the total of 1.3 GW of new 
installed capacity was primarily attributed to its competitive levelized cost of energy (US$ 0.044 to 
0.102 per kWh), the reliability of geothermal electricity production, the absence of fuel cost and long 
plant lifetimes.
It must be noted that financing costs (including interest during construction and the overall cost 
of capital by which the cash flows are discounted) can affect the geothermal generation costs 
considerably. The costs and tariff levels included in Table 1.7 generally cover the costs of capital from 
public sources. In those cases where the developer relies on private sources of financing, tariffs fully 
covering the costs would tend to be higher. The financing aspects of geothermal development are 
discussed further in Chapter 3. 

---

43
C h a p t e r 1