MidAmerican’s CalEnergy has a new PPA; Ormat Technologies comments in California; US Geothermal receives Guatemala license

MidAmerican’s CalEnergy signs a 24-year geothermal contract. Ormat Technologies and GEA submit comments to the California Energy Commission on station service and RPS eligibility. US Geothermal receives its license to construct and operate the El Ceibillo geothermal project in Guatemala.

MidAmerican Energy Holdings: CalEnergy Signs 24-Year Geothermal Contract
Ormat Technologies: Ormat, GEA File Comments on Station Service Definition to California
US Geothermal: El Ceibillo Project Receives License to Construct and Operate 25-MW Project

MidAmerican Energy Holdings: CalEnergy Signs 24-Year Geothermal Contract
CalEnergy, a joint venture between TransAlta and MidAmerican Energy Holdings, has executed a 50-MW contract to deliver geothermal power to Arizona utility Salt River Project. The power purchase agreement is for a duration of 24 years, with power delivery expected from 2016 to 2039. The new contract reflects 15% of the capacity of CalEnergy’s geothermal facilities, bringing the total contracted capacity to 40%. CalEnergy continues its work to market the remainder of the capacity from the 10 geothermal facilities, as the existing contracts roll off. Online.wsj.com

Ormat Technologies: Ormat, GEA File Comments on Station Service Definition to California
Ormat Technologies is this week submitting comments to the California Energy Commission regarding the Definition of Station Service Load, as shared by CEC Staff in a concept paper on station service.  The comments pertain to how geothermal is considered in rules for Eligible Renewable Facilities that participate in the Renewables Portfolio Standard (RPS). Ormat has been engaged throughout the process of the CEC’s decision-making on this issue, and the letter points out the unusual classification CEC has used, terming geothermal brine as a “heat transfer fluid” and not as a “fuel.” This terming, says Ormat, results in “subsequent treatment of geothermal production pump load as station service and not as an offsite fuel transportation. This is discriminatory towards geothermal generators, inconsistent with existing government policies, and harmful to operators of geothermal generating facilities in California.” Ormat’s key points are outlined here:

1. Staff’s approach is unfair because it discriminates against geothermal power plants that utilize geothermal brine as their energy source
a. Staff’s proposed definition that “Fuels are substances that are burned or otherwise modified to produce energy” violates the first law of thermodynamics
b. Staff’s claim that “Brine, unlike a biofuel, does not undergo any chemical reaction or other modification to release its energy; it is simply a fluid with a high thermal potential that is allowed to expand, or, in binary systems, is exposed to a low thermal potential (as in a heat exchanger) allowing it to dissipate heat” is wrong
c. Staff’s claim that “it is reasonable to conclude that a geothermal facility is powered by the internal heat of the earth and not by the geothermal brine,…” has no merit.
d. Staff’s claim that geothermal brine in a geothermal power plant is equivalent to thermal oil in a SEGS power plant is flawed

2. Staff’s approach is inconsistent with existing policies with regards to station service and geothermal power plants

3. Staff’s Position Creates a Significant Harm to Operators of Binary Geothermal Power Plants

The Geothermal Energy Association also submitted comments to CEC on the issue, noting: “we would urge the California Energy Commission to exclude the energy used to move the geothermal fluid from the underground resource to the power plant from being considered as “station usage.” To do otherwise would be to penalize geothermal technologies that the state should be seeking to promote as it expands California’s commitment to carbon free power. We understand this is consistent with the position FERC policies, as well.”

US Geothermal: El Ceibillo Project Receives License to Construct and Operate 25-MW Project
US Geothermal Press Release (Boise, ID) September 18 — US Geothermal Inc., (NYSE MKT:HTM)(TSX:GTH) a leading renewable energy company focused on the development, production, and sale of electricity from geothermal energy, announced today that the Guatemalan Ministry of the Environment and Natural Resources (“MARN”) has issued an Environmental License for the construction and operation of the planned, first phase, 25 megawatt power plant at the El Ceibillo site.

The El Ceibillo development project is an advanced stage, steam geothermal prospect within a 24,710 acre (100sq km) energy rights concession located 8.5 miles (14 km) from Guatemala City, the largest city in Central America.

Temperatures in excess of 500deg F (275deg C) have been encountered during recent drilling at this project.

The license is based on the Environmental Impact Assessment Study that was submitted in December 2012, describing the initial design of the 25 megawatt facility, and requires the submittal of final design specifications for review by MARN prior to starting physical construction of the plant. Additionally, the license requires compliance with all legal and regulatory requirements under Guatemalan law, submittal of an air quality monitoring plan, and that final design comply with the strict guidelines for noise, dust and hydrogen sulfide emissions. Prior to issuance of the license, an environmental bond of $344,850 Quetzals (approximately US $45,000) was posted with the Ministry of Environment and Natural Resources.

“The issuance of this license is an important step in our development plans for the El Ceibillo Project,” said Dennis Gilles, CEO of US Geothermal. “While we are still working on developing the geothermal reservoir, having the environmental license in hand will allow us to move the project forward within an efficient timeframe.”

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