DOE recently offered loan guarantees for geothermal power projects located in northwestern Nevada and southeastern Oregon, drawing on funds from the American Reinvestment and Recovery Act. Geothermal power plants generally draw on underground reservoirs of hot water or steam, using that energy to drive a turbine, which spins a generator to produce power. For the Nevada plant, DOE announced on June 15 a conditional commitment to provide a partial guarantee for a $98.5 million loan to the Nevada Geothermal Power Company (NGP). The company is the developer of Faulkner 1, a 49.5-megawatt (MW) geothermal power project at NGP's Blue Mountain site in northwestern Nevada. DOE is acting as loan guarantor for up to 80% of the $98.5 million loan to NGP for the Blue Mountain project. NGP has a 20-year power purchase agreement to sell electricity and renewable energy credits from the project to NV Energy (formerly the Nevada Power Company).
NGP's Blue Mountain project is the first to access a DOE loan guarantee through the Financial Institution Partnership Program (FIPP), a program supported by the Recovery Act. In a FIPP financing, long-term lenders apply on behalf of the project sponsors or developers and are required to hold at least 20% of the credit exposure to the project. FIPP was designed to expedite the loan guarantee process for renewable energy generation projects that use commercial technologies, while expanding the capacity for financing U.S. renewable energy projects. For the Blue Mountain project, John Hancock Financial Services is the lead lender and the applicant for the DOE loan guarantee. See the DOE's Loan Guarantee Program website.
For the Oregon plant, DOE announced on June 10 the offer of a $102.2 million conditional commitment for a loan guarantee to U.S. Geothermal, Inc. to construct a 22-MW power plant. The project could be the first commercial geothermal power plant in the state, and the electricity generated will be sold to Idaho Power Company under a long-term power purchase agreement. The project will use an improved technology to extract energy from the geothermal hot water more efficiently. In typical "binary-cycle" geothermal power projects, geothermal hot water is used to vaporize a secondary ("binary") fluid that is then directed through a turbine to generate electricity, after which it is condensed and reused, forming a closed cycle. U.S. Geothermal's supercritical binary geothermal cycle is designed to be more efficient than other systems in extracting heat from the geothermal hot water, thereby increasing the output of the power plant. The technology could help extract more energy from existing sites, while sites that previously would not have been considered for geothermal projects could now be feasible to develop. The company estimates that the planned project will create 150 jobs during the 20-month construction period and employ 10 skilled full-time workers when it begins operating in 2012.