A new methodology for a "Level 2" Seismic Hazard Assessment has been developed for a geothermal project. Geomechanical models were created to understand the thermo-mechanical effects in the lifetime of a specific geothermal operation. Two types of geomechanical models are used, a 3-D Mohr-Coulomb model using both a deterministic and a probabilistic methodology, and a 2-D elastoplastic finite element model, simulating the lifetime and the associated mechanical changes caused by the geothermal operation. The simulated results show that, under maximum production conditions, there is a <1% likelihood of induced seismicity. Using published correlations, the movement along a fault is used to calculate the maximum magnitude of the unlikely seismicity, projected to be the order of 1.5 to 2 Mw. As a mitigation method, a Traffic Light System is proposed. This allows the geothermal operation to continue while staying within the expected safety margins.