Sierra Geothermal Power to apply for newly announced DOE grants

Alexander Richter 3 Jun 2009

Sierra Geothermal Power Corp. announced its plans to apply for grant funding made available by the US Government under three Funding Opportunity Announcements.

In an announcement today, “Sierra Geothermal Power Corp. (TSX-V:SRA) today announced that it plans to apply for grant funding made available by the US Government under three Funding Opportunity Announcements (“FOAs”).”

“The FOAs set out the criteria for evaluating grant applications under this initiative and the amount of funding available per grant.

SGP intends to submit several of its projects under the Geothermal Technologies Program FOA which has a funding ceiling of US$5 million per application. The grant will fund between 50 and 80 percent of a program’s cost. SGP also intends to submit its Reese River project under The Enhanced Geothermal Systems (“EGS”) Component Research and Development / Analysis FOA, and is considering submitting the project under The Enhanced Geothermal Systems Demonstrations FOA. These EGS grants have a funding ceiling of US$5 million and US$25 million per application respectively, and will fund 80 percent and 50 percent of a program’s cost respectively. The results of exploration activities conducted at Reese River suggest the potential for both conventional geothermal and EGS power generation projects. If SGP is successful in its applications, the DOE grants will provide a portion of the funding required to move SGP’s more advanced projects to feasibility.

The Recovery Act gives preference to activities that can rapidly assist in economic recovery. The 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, SGP 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. SGP has two projects with completed environmental assessments and a third 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.”

The DOE has indicated that it intends to give notification of awards to applicants for the two EGS FOAs in September 2009, and for the Geothermal Technologies Program FOA by November 15, 2009.”

Source: Company announcement