Geothermal updates from Alterra, Calpine, Enel, GeoTek, Ram Power, and US Geothermal

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Alterra Power: Company Value is Building
Calpine Corp.: Marin Energy Authority Signs PPA
Enel Green Power: Company Invests Big in Geothermal
GeoTek: Texas Energy Technology Company Advances with DOE Research Award
Ram Power: Nicaragua Refurbishment Drilling Commences
U.S. Geothermal: Innovative Technology Neal Hot Springs Power Plant Reaches Final Completion

Alterra Power: Company Value is Building
An article on features Alterra Power Corp., a GEA member, and its executive chairman Ross Beaty. Noting that the geologist and mineral financier made a fortune mining gold, silver and copper, the article says: “Surprisingly, investors have been slow to follow Beaty from mining to renewable energy.” The Vancouver-based company was born of the previous Magma Energy and Plutonic Power companies. It has assets in the western U.S., Chile, Argentina and Peru.

Beaty is quoted: “I think the company is incredibly undervalued and the market doesn’t reward companies like this today. They did back in 2006-2007 and they will again in the future. In the meantime, we’re simply building fundamental value,” Beaty says. “We’ve had many companies interested in taking us over, but we wouldn’t consider that at these prices.”

Calpine Corp.: Marin Energy Authority Signs PPA
Marin Energy Authority has signed a Power Purchase Agreement for 10 MW of geothermal power, which will come from Calpine’s field, The Geysers. Calpine is expected to deliver more than 900,000 MWh, enough to power 13,600 local homes. Calpine’s proposal was chosen out of 135 project proposals — all ranked based on location, portfolio fit, project viability, counterparty strength, and contract terms. This is MEA’s first geothermal PPA and its 11th contract for renewable electricity generation. It actually includes two contracts: 3 MW for 2014 as well as a long-term 10 MW contract starting in January 2017 for 10 years.

Calpine (NYSE: CPN ) is expected to report Q2 earnings on July 25. A Motley Fool article notes average analyst estimates predict Calpine’s revenues will increase 55.6% and EPS will expand 166.7%. See also

Enel Green Power: Company Invests Big in Geothermal
Enel Green Power is planning to invest 900 million euros in geothermal over the next four years. Based in Italy, the company has geothermal plans for the U.S., Turkey, El Salvador, Peru, Guatemala, and Chile, notes

In the U.S., Enel is installing a further 25 MW at its plant in Cove Forth, Utah. The company was also selected by the U.S. Army in May of this year as one of 5 companies that will be considered for its future Power Purchase Agreements using geothermal technology.

Elsewhere, Enel is also stepping up its goals. In Turkey, where the government has set a goal of 600 MW by 2015, the company has 142 licenses to explore with local partner Uzun Group. In Chile, Enel was awarded three exploration licenses totaling 165,702 hectares last year. And in Peru, Enel was authorized in February for geothermal exploration for the Carmen area in Ayacucho, and in April for the Carumas District.;

GeoTek: Texas Energy Technology Company Advances with DOE Research Award
Press Release (Dallas, TX) August 1 — GEOTEK ENERGY, LLC, a geothermal power and downhole pump technology leader, is pleased to announce approval by the Department of Energy for reimbursement of up to $1.08 Million for the fabrication and initial testing of its Gravity Head Energy System (“GHES”). Dave Marshall, CEO, explained that “GeoTek completed last year the first of three phases in the DOE program, under budget.” The third phase of this $2.85 Million DOE research award is expected to commence next year with an additional $1.32Million in potential funding for GHES field tests. GeoTek is required to supplement these DOE cost-share research funds with private capital which GeoTek is currently raising.

The Gravity Head Energy System is meant to eliminate pumps and motors typically needed in binary geothermal energy production, as well as a sub-surface Gravity Head pump for use in geothermal wells and moderate to high temperature oil wells.

Ram Power: Nicaragua Refurbishment Drilling Commences; San Jacinto-Tizate Phase II Construction Loan Converted to Term Loan
Ram Power Press Release (Reno, NV) July 18 — Ram Power, Corp. (TSX: RPG), a renewable energy company focused on the development, production and sale of electricity from geothermal energy, is pleased to announce that the Company, through its subsidiary Polaris Energy Nicaragua, S.A., has begun drilling operations at the San Jacinto-Tizate power project:

The remediation drilling program calls for the refurbishment of two existing production wells with a targeted increase in steam availability of approximately 9 to 14 MW, or 70-110 tonnes/hour of additional net capacity. The Company will utilize the knowledge based on extensive geoscience analysis and the production performance of the wells during the first several months of operations. Drilling operations are being led by Sinclair Knight Merz, the resource consultant for the Company, in consultation with PENSA and Thermasource Inc. The program is expected to be completed by late October 2013, and all increased steam resources from the remediation program would be available for plant production during the latter part of the year.

Antony Mitchell, Executive Chairman of the Company, stated, “Our current two-well drilling program is aimed at increasing our San Jacinto production and improving our existing positive cash generation. We are committed to operating the San Jacinto operation at its design capacity, providing additional base load energy to the people of Nicaragua and increasing the value of the Company for our shareholders.”

The company also announced in a separate press release (Reno NV, August 1) that the San Jacinto-Tizate Phase II loan has been converted from a construction loan to a term loan. The complex terms of the loan are explained in the release:

“Under the terms of the agreement, the Lenders agreed to waive the minimum steam requirement set forth in the original agreement and permit the Company to complete its resource remediation program over the next five months. While the Company will not be permitted to receive distributions until the completion of the resource remediation program, the Company will receive administrative fee payments from Project revenues of $0.5 million per month effective July 31, 2013, August 15, 2013, September 15, 2013 and October 15, 2013.

To expedite the resource remediation drilling program currently in progress, the Company funded $3 million in June 2013 to the Major Maintenance Reserve Account from Project equity. The Company has also agreed to fund from Project equity an additional $2.95 million to the Major Maintenance Reserve Account by December 15, 2013 for other potential resource remediation efforts if necessary. In conjunction with the conversion, the Company from Project equity funded $2.4 million to a reserve account to satisfy certain power purchase agreement obligations not currently met by the off-taker. Once the off-taker fulfills their guarantee requirements under the terms of the power purchase agreement, the $2.4 million will be released from the reserve account and be eligible for distribution to the Company under the Project distribution conditions.

Following the completion of the resource remediation drilling program on or before December 15, 2013, the Company will conduct a plant capacity test to be concluded no later than January 22, 2014. The test includes a 30-day stabilization period of the resource field followed by a 7-day performance test to determine the net operating output of the plant. Upon completion of the plant capacity test, the Company is eligible for distributions if it is able to meet certain debt service coverage ratios and other operational requirements.

Should the plant capacity test result in a net operating output below 55 MW (net), the Phase II Credit Facility will be in default. If the plant capacity test results in a net operating output equal to or greater than 65 MW (net), the $2.95 million Project equity deposited into to the Major Maintenance Reserve Account will be released and be eligible for distribution under the Project distribution conditions, and quarterly contributions to the Major Maintenance Reserve Account will be approximately $1 million per quarter. For net operating output results below 65 MW (net), the $2.95 million will remain in the Major Maintenance Reserve Account for future drilling efforts and quarterly Major Maintenance Contributions will increase by $0.2 million per MW for production levels below 65 MW (net). The Company has the option to re-test the plant capacity at any time and upon any re-test resulting in the plant operating at or above 65 MW (net) will result in the Major Maintenance contributions resetting to approximately $1 million per quarter.”

U.S. Geothermal: Innovative Technology Neal Hot Springs Power Plant Reaches Final Completion
Press Release (Boise, Idaho) August 1 — U.S. Geothermal Inc., (nyse mkt:HTM) CA:GTH +10.00% a leading renewable energy company focused on the development, production, and sale of electricity from geothermal energy, announced today that Final Completion of the 22 megawatt (net) Neal Hot Springs Project has been achieved. Yesterday, 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.”

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