The U.S. Department of Energy (DOE) is interested in homegrown renewable energy, and has been backing the loans to prove it. The latest area of development seems to be geothermal power, as the DOE recently signed on to nearly $200 million on loan guarantees for major projects in Oregon and Nevada.
In southeastern Oregon, U.S. Geothermal, Inc. will use $102.2 million in DOE conditional commitment funds to construct a 22 megawatt geothermal power plant, which the company estimates will create 150 jobs during the 20-month construction period and employ 10 skilled full-time workers when it begins operating in 2012. The project will make use of a technology known as a supercritical binary geothermal cycle in order to extract energy from rock and fluids in the earth’s crust more efficiently than traditional geothermal binary systems, allowing lower-temperature geothermal resources to be used for power generation.
In Nevada, Nevada Geothermal Power, through its subsidiaries Nevada Geothermal Power Company and NGP Blue Mountain I LLC (“Blue Mountain”), will use a $98.5 million loan from the Federal John Hancock Financial Services (backed by the DOE) to develop the Blue Mountain project, a 49.5 megawatt geothermal power plant located in northwestern Nevada. The project will consist of a geothermal well field, fluid collection and injection systems enabling energy to be extracted from rock and fluid below the earth’s surface, as well as a power plant that will convert geothermal energy into electricity. The project has a 20-year power purchase agreement to sell electricity and renewable energy credits.
NGP, 100% owner of the Blue Mountain project, and John Hancock Financial Services, the lender-applicant and lead lender, are the first geothermal proponents to access a DOE commercial loan guarantee through the Financial Institution Partnership Program (“FIPP”), a program supported by the 2009 American Recovery and Reinvestment Act.
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