Fervo_Project_Cape-4 Stimulation Costs Update
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…% inflation during construction hedge since we'll consider the unexpectedly-higher stimulation costs to have eaten it. (Inflation during construction is now $58.2M as dicated by 1-year construction time + 2.3% inflation rate)
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| Reservoir Stimulation Capital Cost per Injection Well, 3.48, -- Estimated cost of $4M per well including 15% contingency. | ||
| Reservoir Stimulation Capital Cost per Production Well, 3.48, -- Estimated cost of $4M per well including 15% contingency. |
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TODO: Should be "Estimated cost of $4M/well once 15% contingency is applied"
| @@ -54,7 +54,7 @@ in source code for the full set of inputs. | |||
| | Fraction of Investment in Bonds (percent debt vs. equity) | 60% | Approximate remaining percentage of CAPEX with $1 billion sponsor equity per Matson, 2024. Note that this source says that Fervo ultimately wants to target "15% sponsor equity, 15% bridge loan, and 70% construction to term loans", but this case study does not attempt to model that capital structure. | | |||
| | Exploration Capital Cost | $30M | Estimate significantly higher exploration costs than default correlation in consideration of potential risks associated with second/third/fourth-of-a-kind EGS projects | | |||
| | Investment Tax Credit Rate (ITC) | 30% | Same as 400 MWe case study (Fervo_Project_Cape-3) | | |||
| | Inflation Rate During Construction | 15% | Conservatively models the equivalent of a higher annual inflation rate (4.769%) over a 3-year period as a hedge against construction delays and short-term inflation volatility. | | |||
| | Construction Years | 1 | Calibrated to a 2-6 year construction time for a 1 GW plant (Yusifov & Enriquez, 2025) | | |||
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FIXME re: line 50 above - needs to be updated!
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Adjust Fervo_Project_Cape-4 stimulation cost to $4M per well. Remove 15% inflation during construction hedge since we'll consider the unexpectedly-higher stimulation costs to have eaten it. (Inflation during construction is now $58.2M as dicated by 1-year construction time + 2.3% inflation rate)