GEOCITY is a computer simulation model developed to study the economics of district heating/ cooling using geothermal energy.1 GEOCITY calculates the cost of district heating/cooling based on climate, population, resource characteristics, and financing conditions. The principal input variables are minimum and maximum temperatures, heating degree-days and cooling degree-hours, population size and density, resource temperature and distance from load center, housing type, and the interest rate. From this input data the model designs the transmission and district heating/cooling systems. From this design, GEOCITY calculates the capital and operating costs for the entire system, including the production and disposal of the geothermal water.

The basis for the geothermal energy cost analysis is the unit cost of energy which will recover all the costs of production -- capital investment, operating expenses, taxes, and the specified rates of return on capital. The calculation of the unit cost of energy is based on life cycle costing and discounting cash flow analysis. A wide variation can be expected in the range of potential geothermal district heating and cooling costs. The range of costs is determined by the characteristics of the resource, the characteristics of the demand, and the distance separating the resource and the demand. In this paper, costs were developed for each of the main parts of the production process. The sensitivity of these costs to several significant parameters under a consistent set of assumptions were also determined.