Geothermal Project Nets $350M Loan Backing

On the heels of a recent U.S. Department of Energy (DOE)  announcement that puts $70 million over three years toward geothermal energy research and development projects, comes word from DOE Secretary Stephen Chu and Senate majority leader Harry Reid about a conditional commitment to provide a partial guarantee for a $350 million loan for a geothermal power generation project in Nevada. The project’s developer, Ormat Nevada, has been seeking DOE funding assistance since December 2010.

Ormat’s project involves three different geothermal electricity generation plants that, combined, are expected to produce about 121 megawatts of clean power. The Jersey Valley facility will be located in Pershing County, the McGinness Hills facility in Lander County and Tuscarora facility in Elko County, Nevada.

Ormat Geothermal

image via Ormat Technologies

The project is expected to produce over one million megawatt hours of power annually, which is meant to be  enough to power nearly 88,000 homes.  The combined  output from each of the three plants is expected to be sold to Nevada Power Company under a long-term power purchase agreement (PPA).

Geothermal energy is promising as an energy source because, unlike solar and wind power,  it can provide electricity 24 hours a day without the need for advanced storage technology. However, geothermal projects have been slow to get moving due to a lack of funding, according to a report from the Geothermal Energy Association. The $70million research and development funds the DOE announced earlier are intended to accelerate geothermal energy development and, perhaps, attract private investors and their much needed capital.