DOE Offers Loan Guarantees to Nevada and Oregon Geothermal Projects
DOE recently offered loan guarantees for geothermal projects in northwestern Nevada and southeastern Oregon, drawing on funds from the Recovery Act.
For the Nevada plant, DOE announced on June 15 a conditional commitment for 80% of a $98.5 million loan guarantee to the Nevada Geothermal Power Company (NGP). The company is the developer of Faulkner 1, a 49.5 MW project at its Blue Mountain site. NGP has a 20-year power purchase agreement (PPA) to sell electricity and renewable energy credits from the project to NV Energy (formerly the Nevada Power Company).
NGP's Blue Mountain project is the first to access a DOE loan guarantee through the Financial Institution Partnership Program (FIPP), a program supported by the Recovery Act. In a FIPP financing, long-term lenders apply on behalf of project sponsors or developers and must hold at least 20% of the credit exposure to the project.
FIPP expedites the loan guarantee process for renewable energy projects that use commercial technologies, while expanding the capacity for financing U.S. renewable energy projects. For the Blue Mountain project, John Hancock Financial Services is the lead lender and the applicant for the DOE loan guarantee. See the DOE press release and DOE's Loan Guarantee Program Web site.
For the Oregon plant, DOE announced a $102.2 million conditional loan guarantee to U.S. Geothermal, Inc. to construct a 22 MW plant. The project would be the first commercial geothermal plant in the state, and the electricity generated will be sold to Idaho Power Company under a long-term PPA.
The project will use an improved, more efficient technology to extract energy from geothermal hot water. In typical "binary-cycle" geothermal, hot water is used to vaporize a secondary ("binary") fluid that is then directed through a turbine to generate electricity, after which it is condensed and reused, forming a closed cycle.
U.S. Geothermal's supercritical binary geothermal cycle is more efficient than other systems in extracting heat from the hot water, thereby increasing the output of the power plant. The technology could help extract more energy from existing sites, while sites that previously would not have been considered for geothermal projects could now be feasible to develop. See the DOE press release and DOE's Geothermal Technologies Program Web site.
DOE-Backed Project Will Demonstrate Innovative Geothermal Technology
As part of DOE's Geothermal Technologies Program, two geothermal companies, AltaRock Energy and Davenport Newberry, announced plans to conduct a demonstration of Enhanced Geothermal Systems (EGS) technology at a site near Bend, Oregon.
The demonstration project will extract energy from an underground "hot spot" in the Earth's crust by creating an underground reservoir of water near the hot spot. The demonstration will take place on an existing federal lease located outside the Newberry National Volcanic Monument, about 30 miles south of Bend. The companies will seek to extract energy from the Newberry Volcano, a 500-square-mile dormant volcano with a magma chamber thought to lie only 1-3 miles below the surface.
