Geothermal power plant operating and maintenance costs range from $0.015 to $0.045 per KWh, depending on how often the plant runs. Geothermal plants typically run 90% of the time. They can be run up to 97–98% of the time, but this increases maintenance costs. High run times are found when contractual agreements pay high prices for power. Higher-priced electricity justifies running the plant at high-capacity factors because the resulting higher maintenance costs are recovered. Table 5 provides geothermal operating and maintenance cost by plant size. Large plants tend to have lower O&M costs due to economies of scale.

Table 5. Geothermal Operating and Maintenance Costs
by Plants Size (U.S. cents/kWh)³⁰

As shown by Table 6, geothermal operating costs of 0.4–1.4 ¢/kWh are within the range of O&M costs of conventional power plants.

Table 6. Opeating and Maintenance Cost Comparison
by Baseload Power Source (U.S. cents/kWh)

Levelized Cost
The levelized cost of power production is the average cost of power production over the life of a power plant, taking into account all capital expenses and operating and maintenance costs, as well as fuel costs for power plants that rely on external fuel sources. Major factors affecting geothermal power cost are the depth and temperature of the resource, well productivity, environmental compliance, project infrastructure and economic factors such as the scale of development, and project financing costs.

Real levelized costs for geothermal electricity generation are $0.045-$0.07 per KWh, which is competitive with some fossil fuel facilities, without the pollution.³⁴ The lowest cost of geothermal electricity is approximately $0.015 per KWh. At the Geysers, power is sold at $0.03 to $0.035 per KWh. Some geothermal power plants can charge more per KWh during some time periods, because of incentives related to reliability of generation and power provided during peak demand. The cost of generating power from geothermal resources has decreased about 25% over the past two decades.³⁵

The goal of the geothermal industry and the U.S. Department of Energy is to achieve a geothermal energy life-cycle cost of electricity of $0.03 per KWh. It is anticipated that costs in this range will result in about 10,000 MW of new capacity installed by U.S. firms within the next decade. Table 7 presents the levelized cost comparison of power by source. It shows that in some cases, geothermal energy can compete directly with conventional baseload power sources.

Table 7. Levelized Cost Comparison
of Baseload Power by Source

Job Creation

In 1996, the U.S. geothermal energy industry as a whole provided approximately 12,300 direct jobs in the United States, and an additional 27,700 indirect jobs in the United States. The electric generation part of the industry employed about 10,000 people to install and operate geothermal power plants in the United States and abroad, including power plant construction and related activities such as exploration and drilling; indirect employment was about 20,000.³⁷ Table 8 provides estimates of job creation from renewable energy development based on existing and planned projects in California and the market outlook of project developers and equipment manufacturers. Natural gas is included in the table because the bulk of new nonrenewable generation is expected to rely upon natural gas. The table indicates that geothermal and landfill methane energy generation yields significantly more jobs per MW of installed capacity than do natural gas plants.

Table 8. Employment Rates by Energy Technology^38,39

Economic Impacts
One of the most important economic aspects of geothermal energy is that it is generated with indigenous resources, reducing a nation’s dependence on imported energy, thereby reducing trade deficits. Reducing trade deficits keeps wealth at home and promotes healthier economies. Nearly half of the U.S. annual trade deficit would be erased if imported oil were displaced with domestic energy resources.

Geothermal energy production in the United States is a $1.5-billion-dollar-per-year industry.⁴⁰ Nevada’s geothermal plants produce about 210 MW of electricity, saving energy imports equivalent to 800,000 tons of coal or 3 million barrels of oil each year. In addition, state governments receive tax revenue. In 1993, Nevada’s geothermal power plants paid $800,000 in county taxes and $1.7 million in property taxes. The U.S. Bureau of Land Management collects nearly $20 million each year in rent and royalties from geothermal plants producing power on federal lands in Nevada—half of these revenues are returned to the state.⁴¹

Economic Impacts in Developing Countries
Nearly half of the developing countries have rich geothermal resources, which could prove to be an important source of power and revenue.⁴² Geothermal projects can reduce the economic pressure of developing country fuel imports and can offer local infrastructure development and employment. For example, the Philippines have exploited local geothermal resources to reduce dependence on imported oil, with installed geothermal capacity and power generation second in the world after the United States. In the late 1970s, the Philippine government instituted a comprehensive energy plan, under which hydropower, geothermal energy, coal, and other indigenous resources were developed and substituted for fuel oil, reducing their petroleum dependence from 95% in the early 1970s to 50% by the mid-1980s.⁴³

Developing countries will likely require increasing amounts of power in the coming years. Through technology transfer programs, some industrialized countries are helping developing countries make use of their local sustainable and reliable geothermal energy resources.