According to several U.S. Department of Energy and European Union Framework 7 Directive Program studies, an economically competitive geothermal power plant can cost as low as $3400 per kilowatt installed. While the cost of a new geothermal power plant is higher than that of a comparable natural gas facility, in the long run the two are similar over time. The initial construction costs of a geothermal facility represent two thirds or more of total costs, but geothermal energy acts as a price stabilizer that offsets western dependence upon highly volatile fossil fuel power markets. This is because geothermal power does not need outside fuel to operate—geothermal relies on a constant source of free fuel from the Earth with zero carbon footprint. Geothermal is capital intensive, thus all of the fuel is essentially paid for upfront. However, once the power project is built, most of its power production costs are known and few market parameters can modify them.
Many industry experts agree that geothermal is one of only a few alternative technologies that will compete economically with polluting technologies in the near term—even without considering the additional benefits of geothermal production.
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