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

gEOThErMAL POwEr ECONOMICS 
determination of Power Plant Size by demand Analysis 
Two factors strongly determine the highest possible installed capacity, and thereby power generation, 
of a geothermal power plant: (a) the share of demand for electricity in the country or within the system 
that can be satisfied from the plant, and (b) the potential of the geothermal reservoir.
The electric load within a country depends on the adequacy of power generation on one hand and the 
consumption of electricity on the other. The system only functions if generation and demand are the 
same at all times.
Figure 1.18 presents an example of a country’s load curve, in this case with two daily peaks 
corresponding to additional electricity use for lighting, air-conditioning, or entertainment. Depending on 
the country, load curves have different shapes, according to the system demand they reflect.
Geothermal power plants are typically not equipped to follow system demand and are usually 
deployed to provide base load to the system, as shown in Figure 1.18. Other power sources, such as 
diesel generators and hydropower plants, can adapt more quickly to demand. Along with gas power 
plants, these generation sources can be used to track the load within the system. Dispatching various 
power sources depends on whether they can be used for base load or for peaking operations, and on 
how fast they can adapt to changes in system demand. It is common practice to grant priority dispatch 
to geothermal power, as well as to most other forms of renewable energy, in order to decrease the use 
of fossil fuels and to make the water in reservoirs used for hydropower available over a longer period 
of the year. Therefore, as a general proposition, the combined size of a country’s geothermal power 
plants should not exceed the minimum system demand unless:
• 
the excess power generated can be exported through a transmission interconnection to
neighboring countries; 
• 
geothermal power plants are equipped with load tracking controls. This is likely to induce
additional investments in control valves, heat exchangers, and, in some cases, even turbines
and generators, which would of course impact the financial viability of the project. Load
tracking is easier to do with medium temperature binary power plants, especially if the
production wells are equipped with pumps; or
• 
a turbine bypass is installed, allowing the steam to be routed past the turbine and through
helping to minimize fluid reinjection problems, and, at the same time, opens the door to the extraction 
of minerals (e.g., zinc, manganese, lithium), all with relatively high market values. The first commercial 
facility for the recovery of zinc from geothermal brine was built in the Salton Sea geothermal area of 
southern California in 2000. The facility was designed to produce 30,000 metric tons of 99.99 percent 
pure zinc annually at a value of approximately US $50 million, while the market value of extracted 
silica was estimated at US $84 million a year. The plant was unfortunately decommissioned due to 
depressed zinc prices and some operational difficulties (Bloomquist and Knapp 2002 and updated 
information from Bloomquist in 2011).

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a gas treatment facility to avoid the potential environmental impacts of a direct release to the
atmosphere. 
If none of the above options are available, the geothermal plant size should be dictated by the smallest