Impact of U.S. stimulus legislation on Sierra Geothermal & other Canadian players

Alexander Richter 6 Jul 2009

A recent article on Sierra Geothermal looks into how this company could benefit from the U.S. stimulus legislation, and how the global recession could "be a catalyst for enhanced growth.

A very recent article on Sierra Geothermal looks into how this company could benefit from the U.S. stimulus legislation. The article talks about that the global recession could “be a catalyst for enhanced growth” and that “Sierra Geothermal Power Corp. (TSX:SRA) expects to capitalize on the renewed impetus for greenpower sources that both the recession (and the new U.S. administration) have inspired.”

“Another result of the global recession, or rather, its inciting event, was the stock market meltdown that has taken the prices of equities in the green power space to their lowest levels ever. And that is the opportunity for investors who want to incorporate the upside from the green energy future into their portfolios.”

Ian Tharp, senior analyst of cleantech and renewable energy with Toronto-based Dundee Capital Markets, noted in a recent report released that Canadian-listed geothermal companies with projects in the U.S. are likely to benefit from the stimulus, including U.S. Geothermal, Nevada Geo, Western GeoPower and Sierra Geothermal, because of the proposed extension of the eligibility period for receipt of the renewable energy Production Tax Credit.

The proposed stimulus package also includes a three-year extension of the production tax credit. This would mean the credit for wind energy would expire in 2012, while incentives for geothermal and other industries will remain in place through 2013.

The Recovery Act gives preference to activities that can rapidly assist in economic recovery. The Department of Energy (DOE) states that it will give “special consideration … to projects that promote and enhance the objectives of the [Recovery Act], especially job creation, preservation and economic recovery, in an expeditious manner.” Therefore, Sierra believes that having a completed environmental assessment (a process which can take more than two years) will be a key differentiator in the DOE’s assessment of grant applications as it will allow grant applicants to commence their proposed work programs sooner. Sierra has three projects with completed environmental assessments and a fourth project with its environmental assessment nearing completion.

Gary R. Thompson, President and CEO, said, “We are extremely excited about this opportunity and applaud the Obama Administration on this program that has stimulated interest in the geothermal space and should accelerate the pace at which clean, renewable geothermal megawatts are brought online. We believe we are well-positioned to meet the objectives set forth by the DOE. For example, with several of our projects ‘drill-ready’, we are prepared to quickly put grant funding to work, meeting one of the DOE’s criteria for selecting projects.”

Sierra Geothermal announced its intention to make an application for funds under this plan earlier this month.”

For the complete article use link provided below.

Source: Midas Letter