US Geothermal reports final completion of Neal Hot Spring plant

Neal Hot Springs project site, Oregon (source: U.S. Geothermal)

Alexander Richter 6 Aug 2013

U.S. Geothermal Inc., announced last week that Final Completion of the 22 MW (net) Neal Hot Springs Project has been achieved. On July 31, 2013, the project also received the final advance under the DOE loan guarantee.

The Neal Hot Springs Project was the first geothermal project to obtain a loan guarantee under the DOE’s Title XVII loan guarantee program, which was created by the Energy Policy Act of 2005 to support the deployment of innovative clean energy technologies. The DOE loan guarantee, guarantees a loan from the U.S. Treasury’s Federal Financing Bank. The project was authorized for a loan guarantee of up to $96.8 million.

The Neal Hot Springs project deployed a first of its kind binary cycle process, utilizing a supercritical cycle that uses R134a refrigerant as the working fluid, as well as pre-fabricated modular construction of major plant components.

The Neal Hot Springs project created high-quality American manufacturing and construction jobs through the construction of the power plant, which was supplied by Houston-based TAS Energy Inc., a provider of high efficiency modular energy systems. U.S. Geothermal estimates that about 95 percent of the power plant’s infrastructure and parts were supplied by U.S. based manufacturers. In addition, approximately 150 construction jobs and over a dozen permanent jobs were created during the project’s 20-month construction phase.

The project is selling electricity to Idaho’s largest utility, Idaho Power Company, under a previously signed 25-year power purchase agreement for up to 25 megawatts of power per year. Beginning in 2012, the base energy price is $96 per MW Hour and escalates annually.

The calculated 25-year levelized price is $117.65 per MW hour. “The success of this new first of its kind project at Neal Hot Springs is a major milestone for both our company, and the entire geothermal industry”, said Mr. Dennis Gilles, Chief Executive Officer of U.S. Geothermal Inc..

“The Neal Hot Springs project reflects the true success of the collaborative effort among U.S. Geothermal and our equity partner Enbridge, the Department of Energy who provided the low cost financing under their innovative technology program, and TAS Energy Inc. who provided the innovative plant equipment. We truly appreciate the formidable efforts on behalf of all those involved in this project.”

“Enbridge is excited to be part of the Neal Hot Springs project, which represents our first investment in geothermal energy. We are very pleased with the outcome, and look forward to additional opportunities in the future”, said Chuck Szmurlo, Vice President of Alternative & Emerging Technology of Enbridge Inc.

“The successful result of the Neal Hot Springs project has further strengthened our ability to confidently offer this advanced technology to the broader geothermal industry and implement in other countries,” said J.T. Grumski, Chief Executive Officer of TAS Energy Inc. “We expect that the global deployment of this reliable, clean and economic technology will only continue to grow.”

Source: Company release (pdf)