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A Win for Global Value Chain and Manufacturing Analysis on Geothermal Power Plant Turbines

January 4, 2018

By Sertaç Akar, CEMAC Analyst

I had the pleasure of attending the 41st Geothermal Resources Council (GRC) annual meeting recently to give a presentation "Global Value Chain and Manufacturing Analysis on Geothermal Power Plant Turbines," which highlighted CEMAC's analysis work in this area. Little did I know, the GRC would later announce that my presentation was among the winners for best technical presentation!

Award certificate with the Geothermal Resources Council logo near the top,  and award text reading GRC Best Presentation Award.

Bringing CEMAC's findings to the world's largest annual geothermal energy event was a great experience, and I was happy to share highlights from my team's recent work on manufacturing analysis of turbines/turboexpanders designed for geothermal power generation.

The global geothermal power market has grown significantly over the last decade and is expected to reach a total installed capacity of 18.4 GWe in 2021. While the U.S. has the most geothermal installations, the geothermal market did not grow much in 2016. However, 784 MWe is expected to come online in the next 5 years if existing barriers could be removed to expedite project development. The world`s fastest-growing markets for geothermal power are now in Turkey, Indonesia, and Kenya.

To understand more about the opportunities to improve and expand the geothermal power market, CEMAC developed a manufacturing analysis methodology of geothermal power plant turbines including materials, manufacturing equipment, machining process and cost model.

Chart showing manufacturing analysis components and processes within materials, manufacturing, and assembly steps

Applying this methodology to three case studies, we compared the minimum sustainable price (MSP) of a custom design turbine to a standard turbine as a function of manufacturing volume.

  • 1 MW Organic Rankine Cycle (ORC) Turboexpander
  • 5 MW Organic Rankine Cycle (ORC) Turboexpander
  • 20 MW Geothermal Steam Turbine

The results showed that MSP could highly vary between 893 $/kW and 30 $/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.

Bar chart showing minimum sustainable price for 1 MW turboexpander with volume of manufacturing on the x axis and part minimum sustainable price ($/KW) on the y axis MSP - 1 MW Turboexpander, Custom Design Single Unit – 893,000$ - 893 $/kW, Standard Design Volume of 5 Units 226,000 $ - 226 $/kW, Standard Design Volume of 50 Units – 74,000 $ - 74 $/kW. MSP - 5 MW Turboexpander, Custom Design Single Unit – 1,080,000$ - 216 $/kW, Standard Design Volume of 5 Units 332,000$ - 66 $/kW, Standard Design Volume of 50 Units – 152,000 $ - 30 $/kW. MSP - 20 MW Turboexpander, Custom Design Single Unit – 6,350,000$ - 361 $/kW, Standard Design Volume of 5 Units 2,790,000 $ - 135 $/kW, Standard Design Volume of 50 Units – N/A – N/A

Currently, the geothermal turbine market is driven by the developer's demand for plant efficiency and custom turbines designed specifically for geothermal areas. Custom turbines are designed and sized to optimize efficiency and resource utilization for electricity production. But custom design manufacturing processes result in higher manufacturing setup costs, longer lead times, and higher capital costs. In contrast, standard design turbines that are manufactured at higher volumes typically have a lower total lead time and can operate at off-design conditions.

Our analysis includes these key findings:

  • Sensitivity analysis indicated savings come largely from reduced labor costs for design & engineering and manufacturing setup.
  • Standard size geothermal turbines manufactured at high volumes can lower manufacturing costs.
  • A significant barrier to implementing this strategy is currently insufficient demand for high volumes of these technologies.
  • As the global geothermal market continues to grow, opportunities in new markets will continue to increase, which may be an opportunity for reducing plant capital costs by standardized turbines.

To learn more, view my presentation on the CEMAC website. Watch for more updates on this analysis work in the future, including:

  • Off-design turbine performance and Balance of plant (BOP) analysis for standard size turboexpanders
  • Discounted cash flow (DCF) analysis of project economics to see if standard design makes sense and whether lower turbine costs (capital costs) compensate for lower efficiency/lost revenue.