BOISE, IDAHO, Nov 09, 2015 U.S. Geothermal Inc. (GTH)(nyse mkt:HTM) has announced that it has entered into an agreement to acquire all of the major and long lead equipment for the construction of three binary geothermal power plants at a significant discount.
The equipment was part of an order for six power plant units by another geothermal developer, but only three were installed. The components for the three units being purchased are all new and unused, and have been held in storage. Upon closing of the transaction, they will be moved to a Company owned site.
The equipment is from the same manufacturers, and is of a similar size and design, to that installed at the Company’s Neal Hot Springs and San Emidio power plants. The design output of the acquired units totals approximately 35 megawatts (MW). Actual output of each unit will be determined by resource conditions found at the sites at which the equipment is ultimately installed.
"Since we already operate this same equipment at two of our projects, it will fit in perfectly with our existing operations" said Dennis Gilles, CEO of US Geothermal. "We paid $1.5 million, which is approximately 5% of the equipment’s original cost, a saving of roughly $28 million. This equipment gives us the ability to expand our megawatt output at our existing portfolio of advanced stage development projects at significantly lower cost, and in much shorter construction timeframes."
The three equipment packages which represent approximately 70% of the components needed for the complete plants, will meet the major and long lead equipment requirements for the Company’s proposed Crescent Valley I power plant (25 MW) and San Emidio II power plant (10 MW).
The company plans to grow its portfolio by developing an additional 95 MW over the next 3 years, through a combination of expanding existing operations and constructing new projects. This will positively impact our cash flow and strengthen our commitment to becoming the North American leader in geothermal energy.
KenGen confirms a leasing contract for geothermal power plants expected to add 50 MW in geothermal power generation at the Olkaria field in Kenya by the end of 2016.
Reported locally, a contested tender for a leasing project of up to 50 MW of geothermal power generation at the Olkaria field in Kenya, has been confirmed in late August 2015.
KenGen has contracted three local and international companies to do the job at an estimated cost of Sh21 billion ($200 million) and is expected to be complete by November next year. Toshiba Corporation of Japan, Rentco East Africa Ltd and Lantech Africa, were contracted to lease, operate and maintain the wellheads at the Olkaria Geothermal field for 15 years. The tender win by the three companies had been contested by other bidders but the Public Procurement Oversight Authority (PPOA) gave the lease plans a clean bill of health on August 21, 2015. “This will be a big boost to the 430 MW of Geothermal power we already produce at Olkaria. We expect work to begin fourteen months after signing the lease,” said KenGen Managing Director, Mr Albert Mugo.
Already, 10 steam turbine generators are operational in the Olkaria fields. KenGen has 248 geothermal wells so far and more wells will be rehabilitated in the next three years when the company will have achieved its 700 MW target. 14 prospective sites Mr Mugo said the parastatal will earn its money from the difference in the cost of leasing and the revenue from the electricity generated from the leased wells which will be sold to Kenya Power.
The project’s tender documents show the three companies had convinced the parastatal that the revenues from the deal will be at least Sh850 million ($8 million) every year.
Currently, KenGen is finalizing the installation of 75 MW of geothermal wellhead power generation at Olkaria.
With a fund of US $ 20 million, President Barack Obama´s administration pledged his support to Caribbean and Central American nations to encourage investment projects in clean energy projects. The so-called Clean Energy Finance Facility for the Caribbean and Central America (CEFF-CCA) aims to finance the early stages of green energy project development, such as feasibility studies and environmental impact assessments.
There are a lot of interesting and viable projects that get discarded due to the high risk and the lack of financial support for the early stage development and having the assistance of the CEFF-CCA will surely aid in the growth of green energy in the region.
Local news from Indonesia reflect that new proposals to restart the suspended geothermal power-generating project in Bedugul Bali are again meeting with strong opposition.
Public opposition to PT Tenaga Bumi Bali’s (TBB) geothermal power-generating project grows despite having recently received pledges of support from members of the Bali House of Representatives (DPRD-Bali); and the PDI, Gerinda and Golkar parties.
The project was suspended in 2005 after widespread community protests and a formal resolution in opposition from the DPRD-Bali.
Governor Pastika has restated his refusal to allow the geothermal project in Bedugul in a statement from his office on May 6, 2015. The Governor’s spokesman said that despite Bali continuing power shortage, there are still many other sources of energy that can be explored, even though geothermal energy sources are considered environmentally friendly.
The Governor’s office said that the people of Bali would never tolerate any geothermal project that trespasses on protected forest area in a religiously sacred area of Bali. Balinese religious belief holds that the forested areas in the hills at Bedugul are home to the headwaters of Bali and must remain undisturbed.
Because the opposition to the project was formalized with a DPRD-Bali resolution in 2005, any permission to now allow the Bedugul Geothermal project to resume would require a new resolution and majority approval from the House.