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New York Times talking about the financing challenges for geothermal power

Alexander Richter 11 Nov 2009

In an article by New York Times Green Inc., Jim Witkin looks at the financing challenges for geothermal power and writes about the report on the U.S. Geothermal Energy Market published by Islandsbanki.

In an article published yesterday by the New York Times Green Inc., Jim Witkin looks at the financing challenges for geothermal power and writes about the report on the U.S. Geothermal Energy Market published by Islandsbanki.

“Geothermal resources also have the advantage of providing continuous base-load power at a competitive cost compared with alternatives, the study suggested. “Taking into account the long life span of a geothermal plant, its up-time, base-load capacity and predictability, it provides a levelized cost of electricity that is very cost competitive against not only renewable, but also traditional energy sources.”

Still, “financing and the availability of equity will remain the key challenge for the geothermal sector,” as interest in geothermal projects by investors lags behind wind and solar projects.

The grant system, administered by the Treasury Department, allows the project developers to receive an upfront payment equivalent to the value of any tax credits, which should prove especially useful for geothermal projects.

“These will all help to get some banks back into the lending business for geothermal,” said Alex Richter, the director of Islandsbanki’s Sustainable Energy group in an e-mail message.”

The article also interviews CJ Arrigo of a New York based advisory firm.

Continuing the article states that “Utilities obligated to comply with state quotas for renewable-energy sourcing will also favor geothermal and “pay a higher price for electricity from geothermal in power-purchase agreements,” Mr. Richter said, because it provides reliable, base-load power compared with wind and solar.

Twenty-nine states have enacted standards that will require utilities to use a specified percentage of renewables in their energy portfolio.”

For the full article see link below.

Source: Green Inc., New York Times