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docs/Fervo_Project_Cape-4.md

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# Case Study: 500 MWe EGS Project Modeled on Fervo Cape Station
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The GEOPHIRES example `Fervo_Project_Cape-4` models a 500 MWe EGS Project based on
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The GEOPHIRES example `Fervo_Project_Cape-4` is a case study of a 500 MWe EGS Project modeled on
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on Fervo Cape Station with its April 2025-announced
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[upsizing from 400 MW to 500 MW](https://fervoenergy.com/fervo-energy-announces-31-mw-power-purchase-agreement-with-shell-energy/).
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Case study inputs are formulated using a combination of publicly available data, extrapolations, and estimates.
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## Approach & Methodology
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The case study is constructed to be representative of a 500 MWe EGS project similar to Cape Station,
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but is not intended to be an exact facsimile.
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although it is not intended to be an exact facsimile.
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This is because not all relevant data points are publicly available (e.g. full PPA terms) while others may not be
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applicable
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outside of Cape Station's first-of-a-kind status (such as drilling costs of initial wells which were more expensive
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| Reservoir Stimulation Capital Cost Adjustment Factor | 2.66 | Estimated cost of ~$2M per well. Typical range for Nth-of-kind projects may be $0.5–2M. |
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| Capital Cost for Power Plant for Electricity Generation | $1900/kW | US DOE, 2021. |
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| Discount Rate | 12% | Typical discount rates for high-risk projects may be 12–15% |
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| Inflated Bond Interest Rate (debt annual interest rate) | 5.6% | |
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| Inflated Bond Interest Rate | 5.6% | Typical debt annual interest rate |
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| 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. |
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| 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 |
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| Investment Tax Credit Rate (ITC) | 30% | Same as 400 MWe case study (Fervo_Project_Cape-3) |

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