Why resource risk changes the funding sequence
A geothermal project can have strong surface evidence and still face material subsurface uncertainty. Before a proven production resource exists, a financing proposal must explain what is known, what remains uncertain and which evidence the next expenditure will produce.
Do not apply operating-asset financing assumptions to an exploration programme. Development funds need an explicit stage-gate logic and a consequence if the results do not support the planned capacity.
Read the diagram as text
Screen: Rights + geoscience → Explore: Drilling + interpretation → Develop: Resource + contracts → Operate: Performance + reinjection
A practical development sequence
- Preliminary screening
Establish the concession or access position, available geological information, environmental setting and a development hypothesis.
- Exploration
Integrate geoscience evidence and define a drilling plan, budget, access and decision criteria.
- Resource confirmation
Review well results, reservoir assumptions and the evidence for a deliverable production plan.
- Project development
Coordinate steam-field design, power plant, grid connection, permissions, offtake and construction interfaces.
- Construction and commissioning
Track contractor responsibilities, testing and completion requirements.
- Operation
Monitor resource performance, reinjection, well maintenance, plant availability and contract obligations.
Put each risk beside its evidence
| Resource | Well data, reservoir interpretation and independent technical review. |
| Drilling | Well design, contractor capability, contingency, schedule and unsuccessful-well exposure. |
| Environmental and social | Site-specific assessment, water and land issues, engagement and required permissions. |
| Commercial | Offtake conditions, tariff, dispatch, payment security and change-of-law exposure. |
| Interface | Clear responsibilities between steam field, power plant and grid connection. |
Questions for a financing discussion
Which expenditure is needed before the next capacity decision? What evidence would justify proceeding? Which outcomes would reduce the project scope or stop development? Who owns the interpretation and who independently reviews it?
Keep exploration results separate from a production forecast. If mitigation relies on insurance, a guarantee or a public facility, verify current eligibility, exclusions, payout conditions and programme availability from the provider.
About the historical page
The archived April 2012 catalogue listed Brief Notes on Geothermal Project Development: Stages, Risks and Mitigation Measures as a forthcoming resource. A finished historic document was not recovered. This page is an original 2026 guide to the same subject and makes no claim to reproduce a missing publication.
Sources & further reading
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