Oregon Geothermal Project Wins $102 Million Federal Loan Guarantee
BOISE, Idaho, June 14, 2010 (ENS) – The renewable energy development company U.S. Geothermal, Inc. has been offered a $102 million loan guarantee by the U.S. Department of Energy to construct its planned 22-megawatt power plant at Neal Hot Springs in eastern Oregon.
Neal Hot Springs is the first geothermal project to be offered a conditional commitment for a loan guarantee under DOE’s Title XVII loan guarantee program, which was created by the Energy Policy Act of 2005 to support the deployment of innovative clean energy technologies.
Once certain conditions are satisfied, the deal will guarantee the $102 million loan to the Neal Hot Springs project from the U.S. Treasury’s Federal Financing Bank.
“There is tremendous potential for renewable geothermal energy and the jobs for Oregon that come with it,” said U.S. Senator Ron Wyden, an Oregon Democrat. “The announcement helps make commercial development of geothermal energy at the Neal Hot Springs a reality. This is good news for Oregon and the environment.”
Neal Hot Springs geothermal drilling site (Photo courtesy U.S. Geothermal)
Idaho’s largest utility, Idaho Power Company, has 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.
Idaho Governor Butch Otter said the Department of Energy’s support of U.S. Geothermal, a company headquartered in Boise, goes to the heart of the 60-year relationship between the agency and the state of Idaho, home to the Idaho National Laboratory since 1949.
“Advanced thinking and unsurpassed commitment have formed the bond between the Department of Energy and Idaho for more than six decades, and it has created this critical new opportunity to inject clean, renewable baseload energy into our region’s power grid,” Governor Otter said. “We couldn’t be prouder of our partners at U.S. Geothermal. They’ve shown once again the quality of their global leadership in renewable energy.”
“This loan commitment provides our company with access to low cost capital and is a major milestone accomplishment,” said U.S. Geothermal President CEO Daniel Kunz. “Neal Hot Springs is close to transmission lines and is in a great location to serve Idaho Power Company’s customer base and the rapidly growing Pacific Northwest energy market.”
The Neal Hot Springs project site, near Vale, Oregon, not far from the Idaho border, covers 8.5 square miles. The Neal project has been unanimously approved by the Malheur County Planning and Zoning Commission.
“Neal Hot Springs is one of several important development opportunities for U.S. Geothermal that we believe will emerge over the next year or two, and we are grateful for this critical vote of confidence from the Department of Energy,” said Kunz. “We look forward to continued growth as a producer of clean, green electricity to our home region and beyond for years to come.”
Geothermal power is growing rapidly across the globe, according to a new report by the Geothermal Energy Association.
“Geothermal Energy: International Market Update,” issued May 25, found that between 2005 and 2010 the United States retained its global leadership in production with most megawatts installed, while Germany was the fastest growing geothermal power producer.
The countries with the greatest increase in installed capacity between 2005 and 2010 were: (1) United States – 530 megawatts, (2) Indonesia – 400 MW, (3) Iceland – 373 MW, (4) New Zealand – 193 MW, and (5) Turkey – 62 MW.
In terms of percentage increase the top five countries were: (1) Germany – 2,774 percent, (2) Papua-New Guinea – 833 percent, (3) Australia – 633 percent, (4) Turkey – 308 percent, and (5) Iceland – 184 percent.
Seventy nations currently have projects under development, a 52 percent increase in just the past three years. Projects under development grew the most in Europe and Africa.
Ten countries in Europe were listed as having geothermal projects under development in 2007, but in 2010 this more than doubled to 24 nations.
Six countries in Africa were identified as having geothermal projects under development in 2007, compared to 11 now working to produce geothermal power.
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