Global Value Chain and Manufacturing Analysis on Geothermal Power Plant Turbines: Preprint

The global geothermal electricity market has significantly grown over the last decade and is expected to reach a total installed capacity of 18.4 GWe in 2021 (GEA, 2016). Currently, geothermal project developers customize the size of the power plant to fit the resource being developed. In particular, the turbine is designed and sized to optimize efficiency and resource utilization for electricity production; most often, other power plant components are then chosen to complement the turbine design. These custom turbine designs demand one-off manufacturing processes, which result in higher manufacturing setup costs, longer lead-times, and higher capital costs overall in comparison to larger-volume line manufacturing processes. In contrast, turbines produced in standard increments, manufactured in larger volumes, could result in lower costs per turbine. This study focuses on analysis of the global supply chain and manufacturing costs for Organic Rankine Cycle (ORC) turboexpanders and steam turbines used in geothermal power plants. In this study, we developed a manufacturing cost model to identify requirements for equipment, facilities, raw materials, and labor. We analyzed three different cases 1) 1 MWe geothermal ORC turboexpander 2) 5 MWe ORC turboexpander and 3) 20 MWe geothermal steam turbine, and calculated the cost of manufacturing the major components, such as the impellers/blades, shaft/rotor, nozzles, inlet guide lanes, disks, and casings. Then we used discounted cash flow (DCF) analysis to calculate the minimum sustainable price (MSP). MSP is the minimum price that a company must sell its product for in order to pay back the capital and operating expenses during the plant lifetime (CEMAC, 2017). The results showed that MSP could highly vary between 893 dollar/kW and 30 dollar/kW based on turbine size, standardization and volume of manufacturing. The analysis also showed that the economy of scale applies both to the size of the turbine and the number manufactured in a single run. Sensitivity analysis indicated these savings come largely from reduced labor costs for design and engineering and manufacturing setup.