An Economic Prefeasibility Study of Geothermal Energy Development at Platanares, Honduras

Abstract

The expected economic benefits from development of a geothermal power plant at Platanares in the Department of Copan, Honduras, are evaluated in this report. The economic benefits of geothermal plants ranging in size from a 10-MW plant in the shallow reservoir to a 20-, 30-, 55-, or 110-MW plant in the assumed deeper reservoir were measured by computing optimal expansion plans for each size of geothermal plant. Savings are computed as the difference in present value cost between a plan that must rely on other alternatives and one that contains a geothermal plant. Present value savings in 1987 dollars range from $25 million for the 10-MW plant to $110 million for the 110-MW plant—savings of 6 percent to 25 percent over the time period 1988 through 2008.

The existence of the shallow reservoir is relatively well-characterized, and much indirect scientific evidence indicates the existence of the deeper reservoir. Based on probability distributions estimated by geologists of temperature, areal extent, depth, and porosity, the expected size of a power plant that the deep reservoir can support was calculated with the following results: 0MW-16 percent (i.e., there is a 16 percent chance that the deep reservoir cannot support a power plant); 20-MW-38 percent; 30-MW-25 percent; 55-MW-19 percent; and 110-MW-2 percent. When the cost savings from each size of plant are weighted by the probability that the reservoir will support a plant of that size, the expected monetary value of the deep reservoir can be computed. It is $42 million in present value 1987 dollars—a cost savings of 10 percent. The expected savings from the 10-MW plant in the shallow reservoir are expected to be close to the computed value of $25 million, i.e., the probability that the shallow reservoir can support the plant is high.