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

Phase 1: Preliminary Survey 
The preliminary survey phase includes a first reconnaissance of a geothermal area based on 
a nationwide or regional study. If no geothermal master plan studies are available, developers 
usually conduct their own studies based upon available literature and data, or execute their own 
reconnaissance work to select the areas where they will apply for exploration concessions. Methods 
include a review of geological ground studies, as well as efforts to document the site through satellite 
and airborne imaging. 
Once the concession is granted or the field is selected, a pre-feasibility study is initiated to explore 
the likelihood of the existence of a commercial geothermal reservoir and to get a first estimate of its 
exploitable potential. The pre-feasibility study also touches on aspects such as the characteristics of 
the country’s power market (demand and supply, potential off-takers and customers), transmission 
and distribution system, availability of basic infrastructure (roads, fresh water supply, communication, 
etc.), and environmental and social issues. The institutional and regulatory framework of the country 
is studied to evaluate the conditions for obtaining permits and licenses for project development and 
operation, and for establishing a Power Purchase Agreement (PPA)
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with the relevant utility company 
or other customers. 
In order to obtain the rights to explore and develop geothermal resources within a certain area, the 
project developer (if he or she is not the land owner) must obtain access through lease or concession 
from the surface and subsurface owners. The regulatory framework and the speed and quality of 
the regulatory decisions made at this stage can significantly affect the timetable of the project and 
its development path. Depending on the country, land and mineral water resources can be either 
publically or privately owned. The developer therefore has to enter into an agreement with the 
titleholder of these estates, which will normally require a yearly lease fee or royalties upon production. 
Their impact of these fees on the financial viability of the project should be carefully assessed and 
calculated. 
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Several geothermal power projects are operated by separate steam suppliers and power generators. In such a case, an additional steam 
sales agreement will have to be made. Examples can be found in Indonesia and Philippines.

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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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