Hawaii Electric Light Company, Inc. (HELCO) and Ormat Technologies, Inc. (NYSE: ORA) today announced the signing of a Power Purchase Agreement (PPA) to add more renewable energy, with pricing independent of oil prices, to the Hawaii Island grid.
As part of the contract, Ormat Technologies’ wholly-owned Puna Geothermal Venture (PGV) agrees to provide an additional eight megawatts (MW) of dispatchable geothermal power at fixed prices for over 20 years, providing a valuable hedge against fluctuating oil prices that benefits Hawaii Island electric customers. PGV, located in the lower Puna district of Hawaii Island, currently provides approximately 30 MW under two contracts.
The PPA is subject to approval by the Hawaii Public Utilities Commission (PUC), with input from the Hawaii Division of Consumer Advocacy. The construction of the power plant is substantially complete and is expected to reach full commercial operation after HELCO completes electric grid modifications by the third quarter of 2011.
“Our continued partnership will help us reach our clean energy goals even sooner,” said Jay Ignacio, Hawaii Electric Light Company president. “With long-term pricing that’s not tied to the price of oil, this contract will help stabilize electricity bills as fuel prices move higher.”
Hawaii Island is a world leader in renewable energy, with more than one-third of the energy supplied to its customers from geothermal, wind, hydro-electric and solar resources. Future renewable energy sources also include biomass as well as the use of sustainable biofuel in existing HELCO generating units.
“This agreement reinforces our commitment to increase our diverse portfolio of renewable energy resources,” Ignacio said.
Puna Geothermal Venture has provided baseload power to the island’s grid since 1993. Ormat, a world leader in geothermal technology, acquired PGV in 2004 and has been continuously investing capital to improve efficiency and environmental controls.
“We have enjoyed a long and successful relationship with HELCO and are grateful for its support of geothermal power. Ormat is committed to providing Hawaii’s market with the best geothermal technology, working with the community and sharing with it the benefits of the new development,” said Yoram Bronicki, president and COO of Ormat Technologies. “The power that the expansion will contribute will be generated from a more efficient utilization of the resource which allows us to reduce the overall cost of power and to provide improved stability to the overall electrical grid of the island.”
Focusing on reducing the upfront costs of geothermal development as well as improve its effectiveness, the U.S. Department of Energy (DOE) today announced plans to leverage oil and gas expertise to test the reliability and efficiency of geothermal power generation at oil and gas fields. DOE’s Office of Fossil Energy and Office of Energy Efficiency and Renewable Energy will combine efforts to have experts test and validate low temperature geothermal power generation technologies at the Rocky Mountain Oilfield Testing Center (RMOTC) near Casper, Wyoming.
The goal of this project is to leverage the resources of both program offices to support state-of-the-art research and development into geothermal power generation technology using co-produced fluids from older oil and gas operations. This hybridization combines traditional fossil energy operations with emerging renewable technologies to evaluate low temperature geothermal power production from oil fields. Leveraging existing oil and gas infrastructure reduces the upfront costs of geothermal development. The potential to produce renewable energy from existing sites extends beyond the work with RMOTC to oil and gas fields worldwide.
DOE’s Geothermal Technologies Program (GTP) is currently funding 17 projects demonstrating low temperature, co-produced and geopressured resources in different geological conditions to help enable online capacity of 3 gigawatts, approximately the capacity to power 2.4 million homes a year from these resources by 2020. RMOTC received funding from GTP in 2009 to develop infrastructure for future geothermal testing at the Naval Petroleum Reserve No. 3 (NPR-3).
NPR-3, located near Midwest, Wyoming, produces oil and 45,000 barrels of 190o F water per day from the Tensleep formation and 28,000 barrels of 210o F water per day from the Madison formation. The Tensleep hot water was previously treated as a waste stream. Then a test conducted with Ormat Technologies, Inc. of Reno, Nev., extracted heat from the water to operate a 250-kilowatt generator. To date, the total produced power from the unit is 1,918 megawatt hours from 10.9 million barrels of co-produced hot water. This on-going test was the first in the world to use the co-produced hot water to generate electricity in an operating oil field and will continue through 2011. There are a large number of oil and gas wells in the United States that produce hot water as well as hydrocarbon products, generally at temperatures below 220° F, which are capable of generating renewable geothermal power.
RMOTC is located within NPR-3, 35 miles north of Casper, Wyoming. NPR-3, known historically as Teapot Dome, is operated by the Department of Energy as a producing oil field and a test site for new energy technologies. The 10,000-acre facility hosts traditional oil and gas testing as well as field research into renewable technologies, including wind, solar, and low-temperature geothermal. It is managed through DOE’s Office of Fossil Energy.
The Department of Energy’s Geothermal Technologies Program works to establish geothermal energy as a significant contributor to the nation’s future electricity generation by partnering with industry, academia, and the national laboratories to discover new geothermal resources, develop innovative discovery and generation methods, and demonstrate high-impact geothermal technologies. For more information on the Rocky Mountain Oilfield Testing Center visit the Rocky Mountain Oilfield Testing Center website. For more information on the Geothermal Technologies Program visit the Geothermal Technologies Program website.
Ormat Technologies, Inc. was successful in bringing its 15 MW Jersey Valley geothermal power plant online. Jersey Valley was the only utility-scale geothermal plant completed in the U.S. this past year, providing additional renewable energy to northern Nevada’s electricity grid. The plant is currently in commissioning, operating at partial load with final completion expected in the second quarter.
“We are proud with the accomplishments of this project,” said Yoram Bronicki, President and Chief Operating Officer of Ormat. “We were able to implement innovative power plant solutions and complete the construction a short time after all permits were granted.”
Located at the northern end of Dixie Valley, Jersey Valley rests along the Pershing-Lander County, Nevada line. Ormat’s power solutions are utilized in the plant design; this includes the Ormat Energy Converter (“OEC”), a power generation unit that converts low, medium and high temperature heat into electrical energy. The electricity being produced is sold to NV Energy under a 20-year power purchase agreement.
The Company’s financial position and financing capabilities enabled Ormat to build this project with equity and corporate debt and plan to refinance it upon completion with DOE guarantee funds. This funding strategy shortened the development time and provided flexibility during construction.
“Advanced techniques and plentiful amounts of data, combined with a motivated team of skilled individuals and proven equipment brought this project to fruition,” Bronicki said. “In addition to providing a new source of renewable energy, the completion of the Jersey Valley project contributes to the success of the geothermal industry as a whole and will provide essential insights for future exploration and development efforts.”
Raser Technologies Inc., an energy technology company, announced today that its subsidiary project company, Lightning Dock Geothermal No. 1, HI-01, LLC, signed a term sheet with Ormat Nevada, Inc., a subsidiary of Ormat Technologies, Inc., to provide the Engineering, Procurement and Construction (EPC) of the Lightning Dock, New Mexico geothermal project.
“We are excited to work with a veteran in the geothermal business,” said Project Manager Mike Hayter. “Ormat is a known leader in manufacturing binary-cycle geothermal equipment and we recognize the benefits Ormat would bring to the Lightning Dock project. We are also pleased to announce that, in conjunction with Evergreen and FE Clean Energy, we found a solution that will provide the financing needed for this project.”
The term sheet names Ormat the provider of equipment for the project. The broad scope of work includes the installation of two large Ormat binary turbo generators and all associated above-ground plant equipment including, but not limited to, well field pumps, pipelines, cooling towers, electric interconnection equipment and transmission equipment.
Ormat President and COO Yoram Bronicki said, “We are pleased to work with Raser Technologies on their Lightning Dock geothermal development and we look forward to contributing to the success of this project with our best-in-class, bankable power plant technology and proven execution skills.”
The current project schedule slates the above ground construction to be completed within 24 months from the issuance of the notice to proceed.
Energy Secretary Steven Chu today announced a partial guarantee for a $98.5 million loan to the 49.5 megawatt Blue Mountain geothermal project in Humboldt County in northwestern Nevada. The loan guarantee is being issued to John Hancock Financial Services to support a loan to a subsidiary of the Nevada Geothermal Power Company.
“Our support for the Blue Mountain project is part of the Administration’s commitment to reducing carbon emissions while creating clean energy jobs,” said Secretary Chu.
“Thanks to the leadership of Senator Reid and others in the Nevada delegation, Nevada continues to be a leader when it comes to generating clean, renewable sources of energy,” said the Secretary.
“As I led passage of the stimulus bill, I worked to include the loan guarantee program to help finance clean energy projects like Blue Mountain geothermal that will put Nevadans back to work and bring us closer to energy independence,” said Nevada Senator Harry Reid. “Secretary Chu has been to Nevada many times and I thank him for recognizing the Silver State as a leader in developing these clean energy resources.”
The Blue Mountain project consists of a geothermal well field and fluid collection and injection systems that enable energy to be extracted from rock and fluid below the Earth’s surface, and a power plant that converts geothermal energy into electricity. The energy produced by the power plant is free of greenhouse gas emissions and other air pollutants. The project has a 20-year power purchase agreement to sell electricity and renewable energy credits to the Nevada Power Company.
The loan guarantee was issued under the Financial Institution Partnership Program (FIPP), a Department of Energy program supported by the American Recovery and Reinvestment Act. FIPP is designed to expedite the loan guarantee process for renewable energy generation projects that use commercial technologies and to expand credit capacity for financing of U.S. renewable energy projects. In a FIPP financing, DOE provides a partial guarantee for up to 80 percent of a loan provided to a renewable energy project by qualified financial institutions.
Including today’s announcement, the Department of Energy has issued loan guarantees or offered conditional commitments for loan guarantees to support 14 clean energy projects.
