Every geothermal project reaches a moment where optimism is no longer enough. The geological surveys are complete. The exploration wells have been drilled. The reservoir has been discovered. Now comes the question that determines whether hundreds of millions of dollars will actually be invested: Can this resource make money?

That is the purpose of a geothermal feasibility study.

It is not a technical report written to satisfy regulators. It is the document banks, development finance institutions and private investors use to decide whether a project deserves financing. The World Bank describes it as the document that demonstrates the technical, financial, environmental and commercial viability of a geothermal project before financial close.

A Feasibility Study Begins Where Exploration Ends

Many people confuse exploration with feasibility. They are different stages. Exploration answers whether geothermal resources exist. A feasibility study answers whether those resources can become a profitable business.

That distinction matters because geothermal reservoirs vary enormously. Two reservoirs may have identical temperatures, yet one becomes a successful power plant while the other never attracts investment because drilling costs, transmission infrastructure or electricity prices make the economics unworkable.

The reservoir is only one part of the equation. The business model determines everything else.

Resource Assessment Comes First

Every feasibility study starts by measuring the resource itself. Developers estimate reservoir temperature, pressure, permeability, steam chemistry, sustainable production rates and expected reservoir life. Production testing from exploration wells provides the first reliable estimate of how much electricity the field can generate over decades rather than months.

This stage also determines how many production and reinjection wells will be required. An underestimated drilling programme can add tens of millions of dollars in unexpected capital costs after construction has already begun. The World Bank recommends that every feasibility study include a detailed field development plan identifying existing wells, future drilling locations and long-term reservoir management strategies. 

Then the Financial Model Takes Over

Once engineers know what the reservoir can produce, economists determine whether the numbers work. The financial analysis combines capital expenditure, drilling costs, operating expenses, financing costs, projected electricity revenues, taxation, inflation and long-term maintenance requirements.

Investors typically evaluate metrics such as:

A geothermal project may possess an outstanding resource but still fail financially if transmission infrastructure is too expensive or electricity tariffs are too low. Heat alone does not create bankable projects.

Cash flow does.

Engineering Determines Whether the Numbers Are Realistic

Financial models are only as accurate as the engineering behind them. A feasibility study specifies the power plant technology, steam gathering system, cooling method, pipeline network, substation design, transmission connection and construction schedule.

It also identifies procurement risks. For example, geothermal turbines often require manufacturing lead times exceeding a year, while specialised drilling rigs may need to be secured long before construction begins. Without a realistic execution plan, even profitable projects become difficult to finance.

Risk Analysis Is What Investors Read First

Every geothermal project carries uncertainty. The feasibility study identifies those risks and explains how they will be managed. Typical risks include reservoir decline, drilling failures, environmental compliance, permitting delays, construction cost overruns, exchange-rate fluctuations and electricity market risks.

Unlike solar or wind, geothermal projects also carry geological risk—the possibility that underground conditions differ from expectations despite years of exploration. That single factor makes geothermal feasibility studies fundamentally different from those prepared for most other renewable energy projects. 

The Decision Document

The feasibility study is the document that decides whether a geothermal project is built. If the geology is proven but the economics fail, the project stops. If the engineering works but the financial returns fall below investor expectations, the project stops.

If environmental risks cannot be managed, the project stops. A geothermal feasibility study brings every discipline—geology, engineering, finance, environmental management and commercial strategy into a single investment decision. It does not ask whether geothermal energy is possible. It answers whether this geothermal project is worth building.

Geothermal Resource Assessment Guide

Every geothermal project begins with a belief. A geothermal resource assessment determines whether that belief is worth hundreds of millions of dollars. This is the stage where exploration data becomes investment evidence. Geologists, reservoir engineers and financial analysts work together to answer a single question:

How much usable energy exists underground—and how long can it produce electricity? The answer determines the size of the power plant, the number of wells to drill, the project’s financial value and whether investors move forward. According to the geothermal industry’s resource reporting standards, resource assessment is one of the most important decision points in the entire project lifecycle because it converts exploration results into measurable energy reserves. 

Step 1: Define the Reservoir

The first objective is understanding the reservoir itself. A geothermal reservoir is not simply hot rock. Engineers need to know its temperature, depth, permeability, thickness, pressure, fluid chemistry and lateral extent. These variables determine how much heat can realistically be extracted over decades without exhausting the resource.

This information comes from multiple sources. Geological mapping identifies faults that transport geothermal fluids. Geophysical surveys reveal subsurface structures. Geochemical analysis estimates reservoir temperatures from hot spring chemistry. Exploration wells then provide direct measurements of temperature, pressure and flow rates. Each dataset reduces uncertainty. Together, they define the reservoir.

Step 2: Estimate the Resource Size

Finding a geothermal reservoir is only the beginning. Developers must estimate how much electricity it can actually support. The geothermal industry commonly uses the volumetric method during the early stages of development. Rather than measuring steam production directly, the method estimates the amount of thermal energy stored within the reservoir by analysing its volume, rock properties, temperature and recoverable heat. It remains the most widely used approach for early-stage geothermal resource estimation worldwide because it can be applied before long-term production data exists.

Later in the project, numerical reservoir simulation becomes more important because it predicts how the field will behave under continuous production over many years.

Step 3: Convert Heat Into Megawatts

Heat underground has no commercial value until it becomes electricity. Engineers therefore estimate how many megawatts the reservoir can support over its expected operating life.

That calculation depends on several measurable variables:

These calculations allow developers to determine whether the reservoir supports a 20 MW, 100 MW or 500 MW power plant—and whether expansion will be possible in future. 

Step 4: Measure Uncertainty

Resource assessment is never about producing one number. It is about defining a range. Modern geothermal assessments use probabilistic models and Monte Carlo simulations to evaluate uncertainty. Instead of claiming a reservoir contains a fixed amount of recoverable energy, engineers calculate multiple development scenarios based on geological confidence, recovery factors and production behaviour.

This matters because geothermal investment decisions are made long before every underground condition is fully understood. Confidence becomes almost as valuable as the resource itself.

Step 5: Turn Science Into an Investment Decision

A resource assessment does not end with geology. It ends with economics. Once reservoir capacity has been estimated, developers decide whether additional drilling is justified, what generating technology should be installed, how many production wells will be required and whether the project can sustain commercial electricity generation for 25 years or more. In Kenya’s geothermal development framework, detailed resource assessment is the stage that significantly reduces exploration risk and allows developers to begin negotiations with investors and power purchasers.

Why Resource Assessment Matters

Many people assume geothermal projects succeed because they discover heat. Heat is rarely the problem. The challenge is proving that the reservoir can deliver commercial quantities of energy, continuously, economically and sustainably.

That is what resource assessment measures. It transforms underground geology into engineering data. Engineering data into financial models. And financial models into investment decisions. Until that happens, a geothermal field is simply a promising piece of geology. After it happens, it becomes an energy asset.