Document ATB PPA reference, typical levered returns

softwareengineerprogrammer · softwareengineerprogrammer · commit 20a99a79caa7 · 2025-05-28T14:28:06.000-07:00
diff --git a/docs/Fervo_Project_Cape-4.md b/docs/Fervo_Project_Cape-4.md
@@ -19,7 +19,7 @@ comparison of results with reference values.
 | Maximum Drawdown                                          | 0.009                                                                    | Tuned to keep minimum net electricity generation ≥ 500 MWe and number of times redrilling = 1                                                                                                                                                                                                                                                                                                                                                                                                                                   |
 | Reservoir Impedance                                       | 0.001 GPa.s/m³                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
 | Inflation Rate                                            | 2.3%                                                                     | US inflation rate as of April 2025                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
-| PPA Price                                                 | Starting at 9.5 cents/kWh, escalating to 10 cents/kWh by project year 11 | Both PPAs 'firm for 10 years at less than $100/MWh' estimate given in a podcast                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
+| PPA Price                                                 | Starting at 9.5 cents/kWh, escalating to 10 cents/kWh by project year 11 | Upper end of ranges given in https://atb.nrel.gov/electricity/2024/geothermal. Both PPAs 'firm for 10 years at less than $100/MWh' estimate given in a podcast.                                                                                                                                                                                                                                                                                                                                                                 |
 | Well Drilling Cost Correlation                            | Vertical large baseline correlation                                      | Akindipe, D. and Witter. E. 2025. "2025 Geothermal Drilling Cost Curves Update". https://pangea.stanford.edu/ERE/db/GeoConf/papers/SGW/2025/Akindipe.pdf?t=1740084555.                                                                                                                                                                                                                                                                                                                                                          |
 | Reservoir Stimulation Capital Cost Adjustment Factor      | 2                                                                        | Estimated cost of ~$1.5M per well falls within typical range of $0.5–2M                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
 | Discount Rate                                             | 7.5%                                                                     | Intended to be approximately equivalent to the 8% inflated equity interest rate used in the 400 MWe BICYCLE case study (Fervo_Project_Cape-3)                                                                                                                                                                                                                                                                                                                                                                                   |
@@ -37,4 +37,5 @@ comparison of results with reference values.
 | Minimum Net Electricity Generation            | 502.72 MW                                                                  | 500 MW          | https://fervoenergy.com/fervo-energy-announces-31-mw-power-purchase-agreement-with-shell-energy/. The 500 MW PPA is interpreted to mean that Cape Station's net electricity generation must never fall below 500 MWe. |
 | Well Drilling and Completion Cost Correlation | $4.72M/well                                                                | $4.8M/well      | https://houston.innovationmap.com/fervo-energy-drilling-utah-project-2667300142.html                                                                                                                                  |
 | WACC                                          | 8.3%                                                                       | 8.3%            | https://www.linkedin.com/pulse/fervo-energy-technology-day-2024-entering-geothermal-decade-matson-n4stc                                                                                                               |
+| After-tax IRR                                 | 18.28%                                                                     | 15–25%          | Typical levered returns for energy projects                                                                                                                                                                           |
 | Number of times redrilling                    | 1                                                                          | 1–2             | Redrilling expected to be required within 5–10 years of project start                                                                                                                                                 |
diff --git a/tests/examples/Fervo_Project_Cape-4.txt b/tests/examples/Fervo_Project_Cape-4.txt
@@ -5,7 +5,7 @@
 # *************************************
 Economic Model, 5, -- SAM Single Owner PPA
 
-Starting Electricity Sale Price, 0.095, -- Both PPAs 'firm for 10 years at less than $100/MWh' estimate given in a podcast
+Starting Electricity Sale Price, 0.095, -- Upper end of ranges given in https://atb.nrel.gov/electricity/2024/geothermal. Both PPAs 'firm for 10 years at less than $100/MWh' estimate given in a podcast.
 Ending Electricity Sale Price, 0.1
 Electricity Escalation Rate Per Year, 0.00057
 Electricity Escalation Start Year, 1
