Wasabi Energy acquires Husavik Kalina Geothermal Power Plant in Iceland
Kalina geothermal power plant, Húsavík, Iceland (source: flickr/ ThinkGeoEnergy, creative commons)
Alexander Richter
10 Jan 2011
Australian Wasabi Energy announces the acquisition of the Husavik Kalina geothermal power plant in the North of Iceland through its subsidiary Global Geothermal.
Just announced, Australian Wasabi Energy, listed on the Australian Stock Exchange and the London AIM market, through its subsidiary Global Geothermal Limited, has acquired the Orkuveita Húsavíkur (Húsavík) geothermal power plant, located in the small city of Húsavík in the North of Iceland. ThinkGeoEnergy already had reported on a signed Memorandum of Understanding in the spring of last year, where Wasabi’s intentions on acquiring the plant were announced.
In the announcement of this morning it reads: “This significant acquisition signals the commencement of Wasabi Energy’s Kalina Cycle(R)2 build-own-operate strategy and involves refurbishing the existing power plant to maximise power generation.
As the first geothermal Kalina Cycle(R) power plant installed over a decade ago, the Husavik geothermal power plant (the “Power Plant”) provides an important reference plant for the Kalina Cycle(R) technology and also provides a strong platform for targeting larger, low enthalpy geothermal projects, globally.
Since Wasabi Energy announced its intention to acquire the Husavik geothermal power plant in April 2010, extensive reviews of the project have been conducted, before a formal decision to acquire the Power Plant was made. The Power Plant is not currently operational, and refurbishment activities will commence immediately after receiving formal approval for the acquisition from the Foreign Investment Review Committee of the Government of Iceland with power generation expected to resume in the second quarter of 2012.
This significant acquisition signals the commencement of Wasabi Energy’s Kalina Cycle(R)2 build-own-operate strategy and involves refurbishing the existing power plant to maximise power generation.
As the first geothermal Kalina Cycle(R) power plant installed over a decade ago, the Husavik geothermal power plant (the “Power Plant”) provides an important reference plant for the Kalina Cycle(R) technology and also provides a strong platform for targeting larger, low enthalpy geothermal projects, globally.
Since Wasabi Energy announced its intention to acquire the Husavik geothermal power plant in April 2010, extensive reviews of the project have been conducted, before a formal decision to acquire the Power Plant was made. The Power Plant is not currently operational, and refurbishment activities will commence immediately after receiving formal approval for the acquisition from the Foreign Investment Review Committee of the Government of Iceland with power generation expected to resume in the second quarter of 2012.
Husavik Geothermal Plant: The Husavik geothermal power plant is an important power generation asset for Wasabi Energy, as it was, when built, the first geothermal application of the Kalina Cycle(R) technology. The power plant represents an innovative and highly efficient utilisation of geothermal energy through the design and operation of an integrated district heating and power generation system, in the form of a combined heat and power plant (CHP). Additional thermal energy is recovered from the geothermal brine leaving the Kalina Cycle(R) power plant, and is utilised for both residential and industrial uses.
Following the construction of the Husavik geothermal power plant, independent tests during November 2001 verified the Kalina Cycle(R) power plant’s net output exceeded the design specifications and operated reliably with a high level of availability, confirming the thermodynamic efficiency of the technology.
Global Geothermal intends to refurbish the power plant to maximise power output, and expects to resume power generation in the second quarter of 2012.
Outline of Acquisition: The rationale for the acquisition of the Husavik geothermal power plant consists of a number of key drivers and is an important component of Wasabi Energy’s Kalina Cycle(R) build-own-operate strategy. The acquisition is the first step in Wasabi Energy becoming an independent power producer and will position the Kalina Cycle(R) as the technology of choice for low temperature geothermal power plants. Key terms of the acquisition are outlined below, however specific details of agreements with the City of Husavik and Husavik Energy remain confidential, due to commercial sensitivities.
Executive Chairman of Wasabi Energy and Director of Global Geothermal Limited, Mr. John Byrne commented: “The acquisition of the Husavik power plant is a key step in transitioning Wasabi Energy’s Global Geothermal Limited subsidiary from purely a technology company, into a developer and operator of sustainable power generation assets, through our Kalina Cycle(R) build-own-operate strategy.
“The primary objective of the build-own-operate strategy is to develop an ongoing and profitable revenue stream through the sale of reliable and emission free power, whilst we establish the Kalina Cycle(R) as a major power generation technology.
“Our U.S. based engineering team, Recurrent Engineering LLC has worked diligently to comprehensively review this exciting opportunity since we first executed an MOU with the City of Husavik in April 2010. We are also committed to ensuring the safe and efficient operation of this innovative geothermal power plant.
“We are delighted to be making our first geothermal acquisition in Iceland and we look forward to providing the people of Husavik with a reliable, safe and clean source of power whilst working closely with the Icelandic geothermal community.”
Initial comments from Iceland are positive towards to the potential impact of this acquisition with regards to “significant ramifications for power generation from low-enthalpy geothermal resources, globally.”
Source: Company announcement via Wasabi Energy website, original at Wall Street Journal
