Last February we checked in on a geothermal power project at Neal Hot Springs in Eastern Oregon and, at the time, the U.S. Department of Energy (DOE) had made a $96.8 million conditional loan guarantee that would help support construction of the facility. However, one of those conditions was a “key reservoir certificate” that had to be signed off by a DOE independent engineer. Now, according to US Geothermal, the company responsible for the project, that certificate has been issued and a green light has been given for construction to continue.

In the late 70’s, Chevron Mineral drilled at the site and discovered a “geothermal resource” over 2800 feet under ground. Since then, US Geothermal reports it had an independent consulting firm analyze the geothermal fluid from Neal Hot Springs. The results indicated the reservoir temperature was likely to be around 311ºF to 320ºF, with temperatures further down estimated to be around 347ºF to 356ºF. With everything in place, US Geothermal has directed Houston-Based TAS Energy to proceed with manufacturing the the power plant, Idaho Power to construct a 10-mile transmission line and Industrial Builders to commence site construction. US Geothermal has also had its subsidiary, USG Oregon, start the final stage of drilling the remaining injection wells needed for the project.

Neal Hot Springs Geothermal
image via US Geothermal

When completed, the geothermal plant is expected to generate about 23 megawatts. Idaho Power Company has signed a 25-year power purchase agreement with USG Oregon for up to 25 MW of electrical power per year. US Geothermal says that, 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.

The Neal Hot Springs facility is the first geothermal project to receive one of the conditional loan guarantees that are being dished out as part of the Energy Policy Act of 2005. The project is expected to to create or retain more than 50 permanent jobs in the Pacific Northwest  and create or retain another 400 jobs or so through the equipment supply chain, plant manufacturing and site construction activities during the project’s 18-month construction phase.

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