Recovery Act Funds Support Geothermal Project Loan Guarantee
WASHINGTON, DC, February 28, 2011 (ENS) – A geothermal power project in southeastern Oregon has received a $96.8 million loan guarantee from the U.S. Department of Energy, suppported by the Recovery Act.
Known as Neal Hot Springs, the 26 megawatt project consists of 9.6 square miles of geothermal energy and surface rights 90 miles northwest of Boise, Idaho leased by U.S. Geothermal Inc.
Headquartered in Boise, U.S. Geothermal already operates geothermal power projects at Raft River, Idaho and San Emidio, Nevada.
The Neal Hot Springs project will be the company’s third. It is expected to create some 150 construction jobs, over a dozen permanent jobs and many more supply chain jobs across several states, including Texas, California and Ohio.
Drill rig at Neal Hot Springs (Photo courtesy U.S. Geothermal)
The DOE loan guarantee will guarantee a $96.8 million loan from the U.S. Treasury’s Federal Financing Bank which represents 75 percent of total project cost. When combined with the previously announced equity investment by Enbridge Inc., the loan provides 100 percent of the capital needed to construct the project, the company said in a statement.
“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 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.”
The project uses an improved technology to extract energy from rock and fluids in the Earth’s crust more efficiently than previous techniques.
The technology, called a supercritical binary geothermal cycle, is estimated to be more efficient than traditional geothermal binary systems, allowing lowertemperature geothermal resources to be used for power generation.
Unlike coal-fired and natural gas-fired power plants, geothermal plants produce virtually no greenhouse gas emissions.
“Increasing the supply of renewable energy through projects like U.S. Geothermal’s will help us reach the President’s goal of generating 80 percent of our electricity from clean energy by 2035,” said Secretary Steven Chu on Thursday, announcing the loan guarantee.
“The Neal Hot Springs project will provide clean renewable energy directly from our nation’s vast natural resources while simultaneously creating jobs and helping to promote energy independence,” said Chu.
“U.S. Geothermal’s project means new jobs in Oregon communities that need them most,” said Oregon Governor John Kitzhaber, a Democrat. “This is important step in achieving one of my top priorities – ensuring rural incomes grow along with urban incomes – and reason for optimism about a more prosperous future with Oregon leading the way in clean energy technologies.”
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.
Idaho Governor Butch Otter, a Republican, said, “This major new development by Idaho-based U.S. 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.”
“With the finalizing of this loan, southeastern Oregon’s economy can heat up thanks to geothermal energy technology,” said U.S. Senator Ron Wyden, an Oregon Democrat. “This loan will create more than 150 construction jobs, more than a dozen permanent jobs and will be a real economic shot in the arm and another example that when it comes to renewable energy technology, Oregon is on the right side of history.”
“Right now Oregonians need jobs and that is exactly what this project will deliver,” said U.S. Senator Jeff Merkley, an Oregon Democrat. “This is great news for Vale and for the future of clean energy jobs in Oregon. Our state can be the worldwide leader in geothermal energy production, and this project brings us closer to that vision.”
Neal Hot Springs is the first geothermal project to complete a loan guarantee under the Department of Energy’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.
The Department of Energy, through the Loan Programs Office, has issued loan guarantees or offered conditional commitments for loan guarantees totaling nearly $18 billion to support 19 clean energy projects.
The program’s eight generation projects will produce nearly 23 million megawatt-hours of energy or enough to power almost two million homes.
The DOE-supported projects include two of the world’s largest solar thermal projects, the world’s largest wind farm, and the nation’s first nuclear power plant to be constructed in three decades.