For this goal, the reference system is based on the more challenging geothermal conditions likely to be encountered in many locations: moderate fluid temperatures (circa 150°C) and depths (1525 m). These conditions will require substantially more drilling, a binary cycle conversion system, and air cooling, all of which contribute to a Levelized Cost of Electricity (LCOE) that is estimated to exceed 7 cents per kWh with current (2005) technology. The LCOE is a function of exploration, wellfield construction, stimulation, and energy conversion costs. Although a 30 percent cost reduction will require major improvements in all of these cost areas, this goal is achievable, given historic trends. Goal 2: Increase the economically viable geothermal resource to 40,000 megawatts The thirty-year-old USGS assessment of geothermal resources appears to be optimistic. While an updated resource assessment is likely to reduce hydrothermal resource estimates, the current hydrothermal estimate does not include resources that can be developed using EGS technology. EGS may dramatically increase commercial development potential. Identifying 40,000 MWe of economic resources will require improved exploration capabilities and development of technologies that do not currently exist or are unproven. Approximately 30,000 MWe is expected to come from EGS, with the remainder from conventional hydrothermal systems. This amount of resource will assure long-term growth in geothermal development. Goal 3: Decrease the levelized cost of electricity from EGS to less than 5 cents per kWh by 2040 (in 2004 dollars) Enabling development of a large portion of the resource base requires reducing the cost of EGS energy to competitive levels. Attaining this goal will enable development even under challenging geothermal conditions (low permeability, unsaturated, deep, hard rock) but will require a more than an 80 percent reduction in LCOE from current estimates of EGS costs. The strategies for achieving the program goals involve increasing the resource base by identifying additional geothermal resources, and reducing the cost of developing those resources through improved technology. By 2010, the program will have completed an assessment of resources susceptible to enhancement, and tested the feasibility of technologies to be used for modifying these resources Strategic Goal The program’s strategic goal is to improve technology performance and reduce market entry costs of geothermal energy to competitive levels, thereby making the large geothermal resource available to the Nation Outputs The program’s primary outputs are technologies and practices that lead directly to reductions in the levelized cosof electricity. The expected outputs that will result in completion of the program’s strategic goal are expressed in terms of cost: t Hydrothermal (binary and flash) power plants will produce electricity at less than 5 cents/kWh, and EGS power plants will produce electricity at less than 5 cents/kWh. Figure Developing more geothermal resources in the U.S. translates to more jobs at home and a more robust economy. Page 10 of 145