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Fervo_Project_Cape-4.md - documenting input assumptions and result comparisons with references
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‎docs/Fervo_Project_Cape-4.md

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# 500 MWe EGS Case Study Modeled on Fervo Cape Station
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This case study is modeled
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on Fervo Cape Station with
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its [announced 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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using a combination of publicly available data and estimated values. The tables below highlight key assumptions and
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results of the case study.
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## Inputs
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| Parameter | Input Value(s) | Source |
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|-----------------------------------------------------------|--------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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| Well diameter | 9⅝ inches | Next standard size up from 7", implied by announcement of "increasing casing diameter" |
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| Flow Rate per Production Well | 115 kg/s | Project Red stable and peak flows: 93–120 kg/s. Estimate on higher end of range chosen due to increased casing diameter implying higher flow rates. |
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| Number of doublets | 50 | Estimate based on extrapolation from Project Red |
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| Reservoir size & geometry | 149 rectangular 1400m×1400m fractures; 30m fracture separation | Actual number and size of fractures not known; inputs chosen to create reservoir volume that is compatible with required heat extraction profile. |
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| Water Loss Rate | 15% | Water loss rate estimated to be between 10 and 20% |
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| Maximum Drawdown | 0.009 | Tuned to keep minimum net electricity generation ≥ 500 MWe and number of times redrilling = 1 |
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| Inflation Rate | 2.3% | US inflation rate as of April 2025 |
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| 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 |
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| 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. |
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| Reservoir Stimulation Capital Cost Adjustment Factor | 2 | Estimated cost of ~$1.5M per well falls within typical range of $0.5–2M |
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| Inflated Bond Interest Rate (debt annual interest rate) | 5.6% | |
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| Fraction of Investment in Bonds (percent debt vs. equity) | 28.6% | It is estimated that Fervo currently has more equity financing than debt financing. This particular value is tuned to create a WACC of 8.3% per https://www.linkedin.com/pulse/fervo-energy-technology-day-2024-entering-geothermal-decade-matson-n4stc. 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 FOAK EGS projects |
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## Results
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| Metric | Result Value | Reference Value | Reference Source |
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|-----------------------------------------------|----------------------------------------------------------------------------|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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| LCOE | $74.1/MWh | $80/MWh | https://www.nature.com/articles/s44359-024-00019-9 |
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| Plant capital costs | $4581/kW (based on maximum net total electricity generation of 523.68 MW) | $4500/kW | https://www.nature.com/articles/s44359-024-00019-9 |
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| 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. |
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| Well Drilling and Completion Cost Correlation | $4.72M/well | $4.8M/well | https://houston.innovationmap.com/fervo-energy-drilling-utah-project-2667300142.html |
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| WACC | 8.3% | 8.3% | https://www.linkedin.com/pulse/fervo-energy-technology-day-2024-entering-geothermal-decade-matson-n4stc |
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| Number of times redrilling | 1 | 1–2 | Redrilling expected to be required within 5–10 years of project start |

‎tests/examples/Fervo_Project_Cape-4.txt

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Property Tax Rate, 0
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Capital Cost for Power Plant for Electricity Generation, 1900, -- (peak production)
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Exploration Capital Cost, 30, -- TODO source/citation
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Exploration Capital Cost, 30, -- Estimate significantly higher exploration costs than default correlation for FOAK EGS projects
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Well Drilling Cost Correlation, 3, -- VERTICAL_LARGE correlation. Correlation-calculated value of $4.72M/well aligns with paper-reported value of $4.8M/well.
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Reservoir Stimulation Capital Cost Adjustment Factor, 2, -- Estimate; cost of ~$1.5M per well falls within typical range of $0.5-2M.

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