U.S. Geothermal Inc., a renewable energy company focused on the development, production and sale of electricity from geothermal energy, yesterday announced the financial closing with the U.S. Department of Energy (“DOE”) of a $96.8-million loan guarantee to construct its planned 23-megawatt-net power plant at Neal Hot Springs in Eastern Oregon.
Neal Hot Springs is the first geothermal project to complete a loan guarantee under DOE’s loan guarantee program, which was created by the Energy Policy Act of 2005 to support the deployment of innovative clean energy technologies.
The project uses an improved technology to extract energy from rock and fluids in the Earth’s crust more efficiently. The technology, referred to as a supercritical binary geothermal cycle, is estimated to be more efficient than traditional geothermal binary systems, allowing lower-temperature geothermal resources to be used for power generation. Unlike coal-fired and natural gas-fired power generation plants, geothermal plants produce virtually no greenhouse gas emissions.
The company anticipates about 95 percent of the power plant’s infrastructure and parts will be supplied by U.S.-based manufacturers. In addition, the project’s total output will be sold to Idaho Power Company under a long-term power purchase agreement. With the 25-year agreement in place, the project is well positioned to accommodate anticipated population growth and renewable energy demand in the region.
The Neal Hot Springs project currently consists of 9.6 square miles of geothermal energy and surface rights leased by U.S. Geothermal Inc. The property is located in eastern Oregon; approximately 90 miles northwest of Boise. Chevron Minerals drilled at the site in the late 1970s and made a discovery of a commercial geothermal resource at a depth of 2,820 feet. A Chevron drill hole encountered high temperature and massive lost circulation of drill fluids within the geothermal zone, which indicates the potential for prolific production.
The project will create high-quality American manufacturing and construction jobs through the construction of the power plant, which is being supplied by Houston-based TAS Energy, Inc., a provider of high efficiency modular energy systems. U.S. Geothermal anticipates about 95 percent of the power plant’s infrastructure and parts will be supplied by U.S.-based manufacturers. Approximately 150 construction jobs and over a dozen permanent jobs are expected to be created during the project’s 18-month construction phase.
Geothermal makes a significant contribution to our Project 60 goal of growing Idaho’s gross domestic product to $60 billion and is a shot of good news to our region’s economy.”
Idaho’s largest utility, Idaho Power Company, previously signed a 25-year power purchase agreement with U.S. Geothermal’s wholly owned subsidiary, USG Oregon LLC, for up to 25 megawatts of power per year. Beginning in 2012, the base energy price is $96 per MW Hour and escalates annually. The calculated 25-year levelized price is $117.65 per MW hour.
“U.S. Geothermal’s consistent supply of base load power – generating and regenerating electricity from underground natural resources – is established as a cornerstone of smart economic development, and we are an energized partner to the country to build out resources that make a difference in our communities,” said Daniel Kunz, President and Chief Executive Officer of U.S. Geothermal. “The Department of Energy’s renewable-energy programs are making a real difference in the sustainable economic health of our country.”