Exploration best practices for any natural resource commodity should aim to reduce the resource risk prior to significant capital investment, for a fraction of the cost of the planned investment. For geothermal energy, the high risks cost of proving the resource is one of the key barriers facing the industry. This guide lays out best practices for geothermal exploration to assist geothermal developers and their contractors to address these risks in a cost-sensitive manner, raising project quality. Companies that can demonstrate that their project has followed such best practices will find it easier to access finance. In the same way, this guide will be of use to financers of geothermal projects, assisting the assessment of projects to ensure project risks have been addressed.

A test of best practice for geothermal exploration is the degree to which each principal resource risk element is addressed. Principal resource risks for geothermal energy are temperature (or enthalpy) and depth of the resource, as well as output and sustainability of flow from producing wells. Each component of a geothermal exploration program should be clearly designed to address one or more of these risks, and each risk component should be addressed in some manner. By the completion of the Exploration Phase, a developer should be able to provide potential financiers with at least a qualified (if not quantified) estimate of the uncertainty associated with forecasting thermal energy production.

Formal “Geothermal Reporting Codes” now exist in at least two countries—Australia and Canada. These Codes expound the principles of transparency, materiality, and accountability with respect to the presentation of geothermal exploration results and estimates of future geothermal power generation. Exploration best practices should, at the very least, emulate these principles if not fully comply with one of the Codes. All relevant exploration results should be clearly and fully presented. A competent, qualified, and experienced person should accept responsibility for the interpretations.

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