1 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

The Parker Ranch installation in Hawaii

DOE 2009 Geothermal Risk Analysis:

Methodology and Results DOE Geothermal 

Technologies Program

arlene.anderson@ee.doe.gov February 1, 2010

Geothermal Technologies Program (GTP)

Arlene Anderson & Chad Augustine

NREL Strategic Energy

Analysis Center

Chad.Augustine@nrel.gov

Katherine R. Young (NREL)

Chad Augustine (NREL)

Arlene Anderson (DOE-2046GTP)

NREL/PR-6A2-47526

Presented at the Stanford Geothermal Workshop, 

1-3 February 2010, Stanford, California

Jim McVeigh (Sentech), Ed Eugeni, (Sentech), Joe 

Cohen (SAIC) 

Pacific Gas & Electric/PIX 00059

NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.
2 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

PURPOSE OF THE REPORT

USES OF RISK ASSESSMENT

Standardized annual risk process for all EERE programs used to:

1. Meet the National Academy of Science’s requirement to report uncertainty

2. Improve project, program, and portfolio design, performance, and likelihood of 

success

3. Clarify issues associated with accepting, 

managing, or rejecting risks

4. Link science research opportunities with 

applied energy RD&D

5. Increase decision-maker understanding 

of potential RD&D results

6. Obtain answers to key RD&D questions.

GTP uses risk information to:

1. Set technical goals 

2. Provide input for the supply curve used in 

estimating benefits under the GPRA
3 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

Risk Analysis and Supply Curve Process

EXPERTS

Knowledge

EXPERTS

Estimate high,

low, & median

values for

performance

Parameters

...

ANALYSTS

Aggregate

Estimates

MODELERS

Cost and

Performance

Analysis

GETEM

PROGRAM DECISIONS

• Critical issue identification

• Redundant R&D

• Improved understanding of 

potential 

PROGRAM BENEFITS

• Environmental Benefits

• Economic Benefits

• Energy Security

MODELERS

Market and 

Economic

Analysis

SEDS

NEMS/MARKAL

ReEDS

SUPPLY CURVE MARKET

PENETRATION

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

Vehicle Penetration

Probability

Market Penetration

0%

20%

40%

60%

80%

100%

0.6 0.8 1 1.2 1.4 1.6

Vehicle Performance

Probability 0%

20%

40%

60%

80%

100%

0.6 0.8 1 1.2 1.4 1.6

Vehicle Cost Ratio

Probability
4 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

Preparation

Step 1: Select energy systems to evaluate and technical 

improvement opportunities (TIOs) to assess

Geothermal Technology 2006 Risk Assessment 2009 Risk Assessment

Hydrothermal 2006 Risk:

Flash & Binary

Exploration only

Low-Temperature/Co-Production Not included Not included

EGS, including: 

1. Engineered Geothermal 

Systems

2. Enhanced Hydrothermal 

Systems

2006 Risk: 

Flash & Binary

Multiple TPMs

Direct Use (including Geothermal 

Heat Pumps)

Not included Not included

1. Funding Levels

a. No DOE funding

b. Target DOE geothermal funding

c. Over-Target DOE geothermal funding

2. Timeframes

a. 2015

b. 2025

3. Technologies

Addressing ubiquitous 

sources of EGS—beyond 

easily accessible resources—

mandated by Program 

appropriators when Program 

restarted in FY2008
5 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

Preparation

Reference Scenario

a. What parameters (e.g. resource temperature) needed to be 

assumed in order for experts to provide input on the requested 

TPMs?

b. What values (e.g. 200oC) should be assumed for each parameter 

needed?

Goal: Produce one scenario—which all expert groups will use—that:

a. Has potential for significant market penetration

b. Is more advanced than the first-step EGS power plant

c. Is not so advanced as to be unreasonable.

Step 1: Select energy systems to evaluate and technical 

improvement opportunities (TIOs) to assess
6 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

2006 Risk Assessment

Reference Scenario: 4 km, 200°C

• Some of the best resources

• Not very geographically widespread

2009 Risk Assessment

Reference Scenario: 6 km, 200°C 

• Good resource; more geographically widespread

• Technically able to drill that deep

• Same depth used by SNL in drilling assessment Map Source: SMU NOTE: Maps do not include anomalous, high-temperature hydrothermal locations

Step 1: Select energy systems to evaluate and technical 

improvement opportunities (TIOs) to assess

Preparation
7 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

Preparation

Reference Scenario

• Parameters selected by experts; values developed from extensive expert input

• Difficult to develop reference scenario because EGS is new technology.

Some capabilities are unknown. (e.g. producer/injector ratio, producer flow rate, thermal drawdown)

Parameter Value Parameter Value Parameter Value

Year of the $ Dec-08 Well Casing ID at TD 17.78 cm 7 in Pump Depth Setting 1 km 3,281 ft

Geothermal Type EGS Deviated Ramp Length (at 45°) 500 m 1,641 ft Total Dynamic Head (TDH) 1.2 km 4,000 ft

Resource Rock Temperature 225o C 437o F Well Separation 650 m 2,133 ft Injection Pumping none/low to prevent water 

losses downhole

Fluid Temp at Power Plant Inlet 200o C 392o F Producer-Injector Well Ratio 2:1 Number of Fractured Intervals 2

Ambient Temperature 15o C 59o F Producer Flow Rate 

(per well) 60 kg/s Pump horsepower 1065 HP

Exploration few to none O&G wells in area Injection Temperature 80o C 176o F Gross Capacity 30 MWe

Easy Drilling 

(e.g., Sed overburden) 1,500 m 4,922 ft Water Loss/Total Injected 0.02 Net Capacity 20 MWe

Resource Rock Type igneous Thermal Drawdown (fluid) 0.3%/yr Capacity Factor 0.95

Drilling Coat Curve (in GETEM) median cost curve Geofluid Pump Efficiency 0.6 Energy Conversion binary

Resource Stress Regime normal faulting transitional to 

strike-slip Flasked Wireline Tool Service Time 10 hours Cooling Technology air-cooled

Well Depth 6 km 19,686 

ft Permanent Tool Lifetime 6 years Plant Lifetime 30 years

Well Deviation from Vertical 0 degrees Pump Lifetime (then replace) 3 years

Step 1: Select energy systems to evaluate and technical 

improvement opportunities (TIOs) to assess
8 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

Preparation

Step 2: Define technology performance measures (TPMs) to

assess and map to TIOs and associated R&D activities

Exploration (Hydrothermal & EGS)

1. Non-Well Exploration Costs

2. Exploration Well Success Rate

Well Construction

1. Well Drilling/Construction Cost/ft

2. Production Pump Cost

3. Downhole Pump Temperature

4. Pump Horsepower

5. Wireline Tool Temperature

6. Permanent Equip. Temperature

7. Zonal Isolation Pressure

8. Zonal Isolation Temperature

Reservoir Engineering

1. Well Stimulation Cost

2. Production Well Flow Rate

3. Thermal Drawdown Rate

4. Producer-Injector Ratio

5. Short-Circuit Mitigation Probability

6. Reservoir Creation Probability

Energy Conversion

1. Binary System Capital Cost

2. Binary System O&M Cost/Yr

3. Brine Effectiveness

*EGS Enabling Technologies

While we could not risk ALL metrics required for EGS, we tried to identify those:

a. that are critical to the development of EGS

b. where future improvements could have significant impact on project costs
9 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

Step 3: Recruit Experts

Expert Group

Expert Team

Attended Responded

Exploration 

(well and non-well) 

3 - DOE national laboratory 

1 - USGS

3 - academia

3 - industry 

10 TOTAL

3 - DOE national laboratory

1 - USGS

3 - academia

3 - industry 

10 TOTAL

Wells

(drilling, construction, tools, pumps) 

3 - DOE national laboratory

1 - academia

5 - industry

9 TOTAL 

3 - DOE national laboratory

1 - academia

5 - industry

9 TOTAL 

Reservoir Engineering 1 - DOE national laboratory

1 - USGS

5 - academia

3 - industry 

10 TOTAL

1 - DOE national laboratory

0 - USGS

4 - academia

1 - industry 

6 TOTAL

Power Conversion 1 - DOE national laboratory

1 - academia

5 - industry

7 TOTAL 

1 - DOE national laboratory

1 - academia

5 - industry

7 TOTAL 

Preparation

Preferences

• More reservoir 

engineering experts—

these are key enabling 

technologies

• More reservoir 

engineering experts from 

industry—EGS experience

Next Analysis

• Recruit sooner

• Check availability

• Reserve time on schedule
10 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

Step 4: Expert Probability Assessment (2 weeks)

Green: Provided by Analyst

Yellow: Provided by Expert

Expert Assessment
11 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

 Distribution for Reference Pump Cost ($M)/P18

P18: 

Mean=1.485934

N22: 

Mean=1.336448

N23: 

Mean=1.213537

P18: X <=1

10%

P18: X <=2

90%

0

0.2

0.4

0.6

0.8

1

1.2

0 0.625 1.25 1.875 2.5

Step 5: Aggregate Expert Input & Review With Experts

Jim McVeigh (Sentech) completed all expert aggregation—

this made it clear when experts’ input did not make sense.

Discussion among the experts revealed:

1. Sometimes calculated minimums fell below minimum specified—yet experts were adamant that both 

numbers were specified correctly—they did not feel triangular distributions best fit the distributions

2. Experts were accounting for potential failure of all manufactured products, so distributions showed 

metrics potentially getting worse. These would be adjusted by experts in Round 2.

Zone Temperature (oC)

P42: Mean=149.0602

N46: Mean=187.8963

N47: Mean=213.0431

P42: X <=184.99

90%

P42: X <=119.99

10%

0.00

0.00

0.00

0.01

0.01

0.01

0.01

0.02

0.02

0.02

50 150 250 350 450

 Permanent Tool Temp (oC)

N22: Mean=232.5532

N23: Mean=252.7785

 X <=260

0.00

0.00

0.00

0.01

0.01

0.01

0.01

0.02

0.02

0.02

100 150 200 250 300 350 400

Round 1 draft improvement distributions for $30M funding level

Expert Assessment
12 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

GETEM Modeling

RD&D Investment - Potential LCOE impacts

EGS Reference Scenario

Summary of 50th Percentile LCOE

• Values for 50th percentile LCOE (in Year 2008 ¢/kWh) for EGS reference scenario for single TPM improvements under 

no budget, target budget ($30 million), and over-target budget ($60 million) levels

• For comparison: Current estimate of LCOE = 26.4 ¢/kWh. LCOE calculated for reference scenario binary EGS plant. 

Binary EGS plant reference scenario assumptions: reservoir temperature = 225°C, reservoir depth = 6,000 m, power 

plant design temperature = 200°C. EGS “enabling technologies” assumed constant: production well flow rate = 60 kg/s, 

thermal drawdown rate = 0.3%/year, and producer-injector ratio = 2:1. 

Varied Metric (TPM)

Total Potential LCOE for EGS Reference Scenario

2015 2025

ANNUAL FUNDING LEVEL: No DOE

Funding

DOE 

Planned

DOE 

Expanded

No DOE

Funding

DOE 

Planned

DOE 

Expanded

Well Drilling/Construction Costs 

25.3

24.3 23.3

23.9

22.2 21.0

Plant Capital Costs 25.2 24.5 23.6 23.0

Well Stimulation Costs 25.3 25.1 23.7 23.5

Plant O&M Costs 25.3 25.1 23.8 23.6

Pump Costs 25.3 25.3 23.8 23.8

Exploration Success Rate 25.3 25.3 23.9 23.8

Non-Well Exploration Costs 25.3 25.3 23.9 23.9
13 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

GETEM Modeling

RD&D Investment - Potential LCOE impacts

Hydrothermal Exploration Scenario

Summary of 50th Percentile LCOE

• Values for 50th percentile LCOE (in Year 2008 ¢/kWh) for reference hydrothermal plant for single TPM improvements 

under no budget, target budget ($30 million) and over-target budget ($60 million) levels. Current estimate of LCOE is 

12.8 ¢/kWh. LCOE calculated for reference scenario hydrothermal EGS plant (reservoir temperature = 175°C, reservoir 

depth = 1,524 m, power plant design temperature =175°C, production well flow rate = 44.2 kg/s, thermal drawdown rate 

of 0.3%/year, and producer-injector ratio of 3:1).

Varied Metric (TPM)

Total Potential LCOE for EGS Reference Scenario

2015 2025

ANNUAL FUNDING LEVEL: No DOE

Funding

DOE 

Planned

DOE 

Expanded

No DOE

Funding

DOE 

Planned

DOE 

Expanded

Exploration Success Rate 12.512.5 12.5

12.2

12.1 12.1

Non-Well Exploration Costs 12.5 12.5 12.2 12.2
14 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

GETEM Modeling

Metrics Affecting LCOE

Producer Price Index for “Drilling oil, gas, dry, or service wells”

• Recent rise in drilling costs partly responsible for the large role drilling costs 

play in overall EGS economics. 

• At the time of the risk elicitations, drilling costs were near historic highs due to:

• high rig rental rents caused by high crude oil and natural gas prices (which led to 

increased demand for oil and gas drilling) 

• the scarcity of steel and cement. http://www.bls.gov/ppi/ 
15 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

GETEM Modeling

Aggregated Expert Distribution

Distribution of LCOEs 

for reference scenario EGS plant 

assuming current costs 

as provided by experts for all TPMs 

Distribution of LCOEs with EGS 

enabling-technology TPMs 

fixed at constant values

production well flow rate: 60 kg/s 

thermal drawdown rate: 0.3%/year 

producer-injector ratio: 2:1
16 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

GETEM Modeling

Metrics Affecting LCOE

Summary of 50th Percentile LCOE 

for EGS reference scenario plant

Prod. Well Flow Rate: 30

kg/s

60

kg/s

90

kg/s

Thermal Drawdown LCOE (2008 ¢/kWh)

3.0%/yr 75.8 44.5 38.0

1.0%/yr 49.1 30.2 26.6

0.3%/yr 42.4 26.4 23.4

(assumes producer-injector ratio of 2:1) 0.3%

1.0%

3.0%

0

10

20

30

40

50

60

70

80

30 60 90

Thermal

Drawdown

Rate (%/year)

LCOE (cents/kWh)
17 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

GETEM Modeling

Budget Adjustments - Potential LCOE impacts

0 2 4 6 8 10 12 14 16 18 20 22 

0 

500 

1000 

1500 

2000 

2500 

3000 

0%

20%

40%

60%

80%

100%

120%

0% 20% 40% 60% 80% 100%

Drilling Costs (M$/well)

Plant Capital Costs ($/kW)

Plant Capital Costs (% of Mean Value)

Drilling Costs (% of Mean Value)

100% Stimulation Costs

75% Stimulation Costs

50% Stimulation Costs

25% Stimulation Costs

10%ile Value

10%ile Value

EGS Reference Case

22.5 cents/kWh LCOE

Mean Value

Mean Value

Assumes "Goal" EGS Reservoir

• 0.3%/yr Thermal Drawdown

• 60 kg/s Production Well Flowrate

• 2:1 Injector Producer Ratio

• Drilling, power plant and stimulation cost scenarios that give 22.5 

cents/kWh EGS reference case LCOE. 

• Axes show plant and capital costs as both actual dollar values and as 

percentage of mean value from aggregated expert distributions. 

• Dotted red lines indicate 100% of mean value and 10th percentile values 

from aggregated expert distributions.
18 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

Conclusions

1. Considerable strides made in establishing a risk analysis protocol to be used by the 

GTP on an annual basis. 

2. Greatest potential for reduction in levelized cost of EGS power:

• reducing well drilling/construction costs

• reducing power plant costs. 

3. The near-historic high drilling costs is partly responsible for the large role it plays in 

overall EGS economics. 

4. Reduce costs through RD&D investment in:

• reducing well costs will lower the LCOE

• reservoir engineering and plant performance to reduce the number of wells 

needed.

5. All experts believed that:

• RD&D needs to first occur in enabling technologies for EGS 

• RD&D funding should not all be spent in only a few areas. The industry has the 

potential to benefit from investment in all four areas: exploration, 

wells/pumps/tools, reservoir engineering, and power conversion technologies.

6. Trade-off studies should be conducted to improve on the reference scenario design
19 | 2009 DOE GEOTHERMAL RISK ANALYSIS: Prepared by the National Renewable Energy Laboratory (NREL) eere.energy.gov

Thank You

Katherine R. Young

National Renewable Energy Laboratory 

1617 Cole Blvd.

Golden, CO, 80401-3305, United States

e-mail: Katherine.Young@nrel.gov

Chad Augustine

National Renewable Energy Laboratory 

1617 Cole Blvd.

Golden, CO, 80401-3305, United States

e-mail: Chad.Augustine@nrel.gov

Arlene Anderson

U.S. Department of Energy (DOE)

Office of Energy Efficiency and Renewable Energy (EERE)

Geothermal Technologies Program (GTP) 

1000 Independence Ave SW

Washington, DC, 20585, United States

e-mail: Arlene.Anderson@ee.doe.gov