Geothermal power: ready to take off in the U.S.?
EnergySource LLC has broken ground on its $399 million, 49.9-megawatt Hudson Ranch I geothermal project in Imperial Valley, Calif., with financing from a banking consortium and GeoGlobal Energy – a developer backed by New Zealand’s Mighty River Power, Ltd.
The project, which is based on 65 acres of land near the Salton Sea geothermal region, will supply power to the Arizona-based utility Salt River Project for use in the Phoenix area.
Energy Source President Dave Watson called the project “one of the best geothermal resources in North America.”
Mighty River Power, a major geothermal operator owned by the government of New Zealand, will take a $107 million, 20 percent equity stake in the project through through the Denver-based GeoGlobal.
Debt financing for the project was raised by ING Capital, Societe Generale, West LB, Union Bank, MetLIfe, CIBC, Siemens Financial and Investec.
The plant will also receive stimulus funds.
The project, which was first explored in 2004, should come online by late 2011 and could be followed by two to four more phases, EnergySource Vice President of Development Larry Grogan told the Imperial Valley Press newspaper.
Geothermal development has been crawling along relative to other renewables, posting a mere 6 percent gain in capacity for 2009.
Geothermal also faced an image crisis in the winter brought on by reports that drilling in Switzerland and near San Francisco heightened earthquake risk.
But Mighty River Power is an expert operator and its doubling down on the technology: the company also announced that it is upping its commitment to the GeoGlobal Energy capital fund to $250 million and will pursue geothermal projects in Chile.
Mighty River Chief Executive Officer Doug Heffernan told Bloomberg of his company’s relationship with GeoGlobal,
“We think there are some other prospects that they may well bring to the table in the U.S. over the next two or three years.”
Image: Courtesy Mila Zinkova/Wikimedia Commons