The financial analysis framework that evaluates the costs, performance metrics, and economic returns of geothermal well construction and operation. Geothermal well economics must account for significantly higher drilling costs compared to oil and gas wells due to harder formations, higher temperatures, more corrosive environments, and often greater depths required to access commercially viable heat resources. Drilling costs represent a substantial portion of total geothermal project capital expenditure.

The dominant cost component in geothermal well construction is drilling time, which directly correlates with rate of penetration in hard crystalline rocks. Because geothermal reservoirs are typically found in granite, basalt, or other igneous formations with compressive strengths 2-3x higher than sedimentary rocks, conventional drilling approaches achieve substantially lower penetration rates compared to softer formations. This slow drilling drives both direct time-based costs (rig rates, personnel) and indirect costs from extended equipment exposure to harsh downhole conditions.

Improving geothermal well economics requires breakthrough drilling technologies that dramatically increase rate of penetration in hard rock while extending equipment life in high-temperature environments. Advanced drilling automation systems that optimize weight-on-bit control and eliminate vibration-induced failures can significantly improve drilling efficiency, substantially reducing well costs. For enhanced geothermal systems (EGS) projects requiring multiple wells for commercial development, these drilling performance improvements directly determine project viability, potentially reducing total capital requirements significantly and improving power generation economics to compete with other renewable energy sources.