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New wells, work-overs and deep drilling project to help regain full capacity of Reykjanes geothermal plant

Drilling rig on site of the IDDP (source: IDDP/ HS Orka)
Alexander Richter 14 Aug 2017

With additional wells, well work-overs and potentially the ongoing deep drilling project in Iceland, HS Orka hopes to increase the power output of its 100 MW Reykjanes geothermal power plant, currently operating at 75 MW.

In its recent release on quarterly results, Canadian Alterra Power Corp. provides details on the geothermal operations of HS Orka in Iceland.

In recent months, HS Orka has made some significant improvements to its geothermal field at Reykjanes. With well venting, turbine pressure adjustments and more, the company increased generation capacity to 75 MW, the highest output level in 14 months. The Reykjanes geothermal power plant has an installed capacity of 100 MW and is performing below that capacity.

Quarterly generation increased 5% compared to the fourth quarter of 2016 and 3% over the previous quarter. The Company expects further increases in plant output in 2018 from the drilling of planned new wells, well work-overs, and potentially from the recent deep drilling project.

The company also announced the Termination of Blue Lagoon sales process, as we reported earlier. The sales process was for the 30% stake in the Blue Lagoon held by HS Orka. Although multiple offers were received in excess of EUR 90 million, Alterra’s partner, Jarðvarmi slhf, whose consent was required, decided against selling the stake at this time.

The company also announced having settled a $71 million bond for its Icelandic holdings. On July 27, the Company’s subsidiary Magma Energy Sweden signed an agreement to fully settle and extinguish the $71.3 million liability associated with the Reykjanesbær bond. Under the terms of the settlement agreement, the Company obtained a release of the $71.3 million liability under the bond and delivered the collateral (a 12.7% ownership stake in HS Orka).

Source: Company release