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B O x 2 . 2
The Importance of Quality O&M
Operation and maintenance costs are an important factor in any power generation project. However, the
importance of this cost component is particularly high for base-load units, including geothermal power plants,
since they are intended to be run at close to full capacity as much of the time as possible. Plant operation costs
and on-line performance are under increasing scrutiny by purchasing utilities, direct electrical service customers,
and financiers. Because investors and financiers are usually more conservative than developers, an experienced,
well known company able to provide O&M appeals to bankers, and this appeal then can translate directly into
slightly lower financing costs, a major consideration for any geothermal power project. It is important that the
O&M provider or in-house O&M staff be retained at an early stage in the project development process in order
to provide input into power plant design, to participate in plant construction and start-up, and to conduct system
checks. The contractor or plant staff should also be capable of and required to perform an ex-post analysis of all
significant events within the system, including root cause analyses for future planning.
The increase in partnerships to develop projects also highlights another O&M trend: affiliates of financiers
and developers are often highly competent facility operators. A vested interest in plant performance provides
a motivating influence on the O&M provider. Such motivation, in return, provides security to financiers. Other
incentives for peak performance also exist. A bonus for good operation, tied to a penalty for failing to meet
minimum performance requirements, helps ensure optimum performance, guarantees the achievement of
output to match contractual requirements, and generates maximum revenue and profit. Good O&M goes beyond
maximizing current profits and can lead to an efficient use of the reservoir, prolonging its life span and assuring
steam supply. Experienced developers also know that a good performance record will be critical to obtaining both
future sales agreements and financing at attractive rates for future plants.
Source | Bloomquist 2002.
As Figure 2.6 illustrates, CO
2
emissions from geothermal power generation, while not exactly zero,
are far lower than those produced by power generation based on burning fossil fuels.
38
Data from 85
geothermal plants (operating capacity 6,648 MWe) in 11 countries, representing 85 percent of global
geothermal capacity in 2001, indicate a weighted average of CO
2
emissions of 122 g/kWh. In the
United States, the largest producer of geothermal energy in the world, CO
2
emissions were reported at
91 g/kWh (Fridleifsson et al. 2008).
39
Local environmental impacts from geothermal power replacing the use of fossil fuels also tend to be
positive on balance—due to avoided impacts of fuel combustion on air quality, the hazards of fuel
transportation and handling, etc. Nevertheless, like any infrastructure development, geothermal power
has its own environmental impacts and risks that have to be assessed, mitigated, and managed. The
need for a careful assessment and mitigation of all significant impacts from a geothermal power project
is often underscored by a plant’s location in an environmentally sensitive area, which is not unusual
38
Geothermal fluids or steam in some locations can contain high amounts of natural CO
2
(Johannesson 2011). However, the gas can usually
be reinjected or captured and used for industrial purposes.
39
Based on Bloomfield et al. 2003.
64
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
for greenfield geothermal development. However, the impacts from a geothermal power development
project are usually highly localized and site specific and few, if any, of them are irreversible. In most
cases, mitigation measures can be readily designed and implemented.
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