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

Off-take risk and Price risk 
Off-take risk encompasses the risk of failure by the buyer to take power due to reasons concerning 
dispatch, transmission congestion, or transmission line failure and the risk that the off-taker may be 
unable to make agreed payments in a timely fashion. These risks should not be higher for geothermal 
generation than for other types of power generation: the dispatch risk may, in fact, be lower if 
geothermal energy enjoys the dispatch privileges often granted to other renewable energies. Payment 
risk can be addressed by government or international financial institution (IFI) guarantee approaches.
Price risk is the risk of less-than-expected revenue resulting from lower-than-expected off-take prices. 
This is a serious risk in a situation in which some—or all—of the off-take is at market prices (as 
opposed to fixed prices under a PPA or a feed-in regime), or in a situation in which the developer has 
to negotiate his contract price with the off-taker or auction manager.

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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