Technical, financial, economic and environmental pre-feasibility study of geothermal power plants by RETScreen – Ecuador's case study

Abstract A technical, financial, economic and environmental analysis of geothermal power plant developments in the Ecuadorian context was analysed by RETScreen-International Geothermal Project Model. Three different scenarios were considered. Scenario I and II considered incentives of 132.1 USD/MWh for electricity generation and grants of 3 million USD. Scenario III considered the geothermal project with an electricity export price of 49.3 USD/MWh. Scenario III was further divided into IIIA and IIIB case studies. Scenario IIIA considered a 3 million USD grant while Scenario IIIB considered an income of 8.9 USD/MWh for selling heat in direct applications. Modelling results showed that binary power cycle was the most suitable geothermal technology to produce electricity along with aquaculture and greenhouse heating for direct use applications in all scenarios. Financial analyses showed that the debt payment would be 5.36 million USD/year under in Scenario I and III. The corresponding values for Scenario II was 7.06 million USD/year. Net Present Value was positive for all studied scenarios except for Scenario IIIA. The equity paybacks were 3.2, 3.7, 16 and 5.6 years for Scenario I, Scenario II, Scenario IIIA and Scenario IIIB, respectively. Overall, Scenario II was identified as the most feasible project due to positive NPV with short payback period. Interestingly, Scenario IIIB could become financially attractive by selling heat for direct applications. Direct applications, public incentives and clean funding mechanisms are essential for the success of geothermal energy projects in the Ecuadorian context. The total initial investment for a 22 MW geothermal power plant was 114.3 million USD (at 2017 costs). Economic analysis showed an annual savings of 24.3 million USD by avoiding fossil fuel electricity generation. More than 184,000 tCO 2 eq. could be avoided annually. Thus, greenhouse emissions avoided by using geothermal energy would bring out environmental benefits and improve the socio-economic benefits in communities.