Leading news: Opportunities Discussed in “Major Geothermal Resource” Areas

This post brings you news about the first-ever Caribbean Energy Security Summit; XL Pipeline debates; speakers for the upcoming State of the Geothermal Industry Briefing; news from our GEA member companies; and opportunities from Nevada, California and Kenya.

Geothermal Energy Association
Geothermal Energy Association

Above: Geothermal potential for power generation in Central America is estimated to be between 3,000 and 13,000 MW over approximately 50 sites, and several of the countries are already producing geothermal.

A new report from Geothermal Energy Association members looks at initiatives available for geothermal in the Latin America region as well as for specific countries around the region. The report will be made available to GEA members this week; contact leslie@geo-energy.org to request a copy.

Click below for this week’s leading geothermal news.

*Secretary Moniz: Caribbean has “Major Geothermal Resource” Potential
*Renewables PTC Extension Floated and Rejected in XL Pipeline Debates
*Speakers Announced for State of the Geothermal Industry Briefing 2015
*GEA Director Joins NCSE Session on Geothermal Energy
*Atlas Copco: Company Ranked Among World’s Most Sustainable Corporations
*Alternative Earth Resources: Progress Report Posted
*U.S. Geothermal Provides Company Update
*NV Energy Seeks Another 100 MW Renewables
*Comment Period Extended for California Desert Renewables/Conservation Plan
*KenGen Seeks Manufacturers, Equipment Dealers

Secretary Moniz: Caribbean has “Major Geothermal Resource” Potential
The first-ever Caribbean Energy Security Summit, hosted by Vice President Joe Biden this week in Washington, DC, welcomed leaders from across the Caribbean. Secretary of Energy Moniz spoke at the opening reception at Blair House and emphasized the geothermal potential in the region, calling it a “major” resource. GEA’s Executive Director Karl Gawell who attended the event joined Secretary Moniz and Mexico’s Undersecretary of Electricity, Dr. Ochoa, in a conversation about the significance of the resource during the reception.

The following day, at the opening session, Vice President Biden applauded the Caribbean region’s geothermal resource development efforts including St. Lucia’s work to “break down the barriers to geothermal energy.” He stressed a U.S. commitment to support renewable and geothermal power development in the region through OPIC, TDA, US AID and other agencies. He also announced U.S. support for the World Bank proposal to establish a coordinating mechanism for such investment in the region.

Biden-Caribbeanmtg-Jan2015
At the first-ever Caribbean Energy Security Summit, U.S. Vice President Biden applauded the Caribbean region’s geothermal resource development efforts including St. Lucia’s work to “break down the barriers to geothermal energy.”

Following the Vice President, former White House Chief of Staff Thomas McLarty spoke to the roughly 700 people assembled for the Summit. He remarked that “many states in the region have significant geothermal resources” and noted efforts for development in Dominica, Nevis and St. Kitts, and called geothermal drilling risk funding by the Central American Bank “very important.”

A White House Caribbean Energy Security Summit Joint Statement dated January 26, 2015 says that among its intentions the region’s countries will: “Where technically and commercially feasible, promote and develop affordable: (i) no- or lower carbon electricity generation through wind, solar, geothermal power, hydropower, bioenergy, ocean energy, energy recovery from waste, and other clean energies; and (ii) energy efficiency measures. Recognizing also, that alternative fuels, such as natural gas, can play a useful bridging role.”

The statement included the Governments of Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Canada, Colombia, Curacao, Dominica, Dominican Republic, France, Germany, Grenada, Guyana, Haiti, Jamaica, Mexico, New Zealand, Spain, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, United Kingdom, United States, together with the Caribbean Community (CARICOM) Secretariat, Caribbean Development Bank, European Union, Inter-American Development Bank Group, International Renewable Energy Agency, Organization of American States, and the World Bank Group.

Renewables PTC Extension Floated and Rejected in XL Pipeline Debates
As part of its work on Keystone XL pipeline legislation this week, the Senate voted down an amendment that was a “sense of the senate” on extending the PTC. A statement describes the amendment, introduced by Sen. Heidi Heitkamp (D-ND), to Increase Certainty for Wind Energy Industry Workers: “Heitkamp proposed two amendments to increase long-term certainty the wind power industry by putting in place a five-year extension on the Production Tax Credit to promote renewable fuels like wind energy for years to come. Heitkamp has long supported increasing wind power as part of an all-of-the-above energy strategy, and will continue to work with various utilities, manufacturers, and institutions that are playing a major role in the expansion of wind energy in North Dakota and throughout the country.”

The various amendments being debated in the process deal with aspects of climate change, natural-gas exports and renewable energy. Some of the rejected amendments looked at reauthorizing the Land and Water Conservation Fund, releasing certain wilderness study areas from management for preservation, increasing exports, providing extra rebates for photovoltaic systems, and analyzing the potential risks to public health and the environment from a leak or rupture of the pipeline.

Last week the Senate made a landmark vote in the affirmative acknowledging climate change to be real; but rejected a separate vote that stated climate change is affected by human activity. President Obama has said he would veto a fast-track decision. The House passed legislation approving the pipeline earlier this month.

Speakers Announced for State of the Geothermal Industry Briefing 2015
Geothermal Power a Leader in Permanent Job Creation — GEA Press Release (Washington, D.C.) January 28 -– Geothermal power plants are a leading provider of permanent, on-site employment in California and the West. As part of its annual industry assessment roll out, the Geothermal Energy Association (GEA) released preliminary data showing that there were 3,150 permanent, on-site employees at their power plants, or 1.17 permanent jobs per megawatt installed. This is 19 times reported onsite employment of wind projects and 5 times reported onsite employment for solar projects according to GEA.

“In addition to environmental and reliability benefits, geothermal power has important economic values to local communities,” noted Ben Matek, GEA’s Industry Analyst & Research Projects Manager. “While geothermal produces many more construction and manufacturing jobs, as do most technologies, we believe it is a leader in creating stable, permanent employment in the communities in which geothermal plants operate.”

GEA will be releasing employment and other data on the U.S .and global geothermal power industry at its State of the Geothermal Energy Industry Briefing less than a month away. The GEA today also announced its full slate of speakers including leaders in geothermal development, finance, technology and policy. The GEA will distribute the 2015 installation of its annual industry update to attendees of this event. It includes statistical updates on the U.S. and global geothermal market including new capacity online, how much is developing and in what regions around the world. The event will be held at the Hyatt Regency Capitol Hill on Tuesday, Feb. 24.

The event’s full-day agenda will include discussions on key opportunities and obstacles for industry growth in the United States and around the world, multilateral and private finance, the role of technological advancements in geothermal development, and policy and regulatory issues impacting the geothermal industry. Prominent industry and government speakers include Doug Glaspey, President, US Geothermal, Inc.; Bob Sullivan, Senior VP Business Development, Ormat Technologies, Inc.; Jack Thirolf , Head of Regulatory Affairs, Enel Green Power North America; Gunnar Orn Gunnarsson, COO, Reykjavik Geothermal; Pierre Audinet, Clean Energy Program Team Leader, ESMAP Program, The World Bank, Mafalda Duarte, Program Manager, Climate Investment Funds; Tracy Sizemore, Vice President of Business Development, Simbol Minerals Kathy Benedetto, House Resources Committee; Chuck Kleeshulte, Office of Senator Lisa Murkowski; Jeremy Harrell, Office of Senator Dean Heller; and Ryan Mulvenon, Policy Advisor, Office of Senator Harry Reid, among others.

To register for the State of the Geothermal Energy Industry Briefing, please visit http://www.geo-energy.org/events/2015/Geothermal_Industry_Briefing_2015.aspx. For sponsorship opportunities or to request press credentials, please contact Kathy Kent Schott 202 454 5263, kathy@geo-energy.org. Join the conversation on Twitter with #GEABriefing2015.

GEA Director Joins NCSE Session on Geothermal Energy
The National Council for Science and the Environment held its National Conference and Global Forum on Science, Policy and the Environment this week in Washington DC. At the event GEA Executive Director Karl Gawell spoke in a panel discussion on Geothermal Energy with perspectives from government, industry and academia. Gawell was joined by Chris Bromley, a Geophysicist with GNS Science in New Zealand; Jonathan Glen, Research Geophysicist and the new head of Geothermal Research with U.S. Geological Survey; and Arlene Anderson, Geothermal Technologies Office, U.S. Department of Energy.

Atlas Copco: Company Ranked Among World’s Most Sustainable Corporations
Press Release, January 23 — Atlas Copco, an industrial group with world-leading positions in sustainable productivity solutions, ranks 23rd among the 2015 Global 100 Most Sustainable Corporations in the World index – a list presented on Jan. 22 at the World Economic Forum in Davos, Switzerland. The company was also listed first overall in the machinery industry. This is the ninth time that Atlas Copco has appeared in the Global 100 rankings.

“Atlas Copco has a presence in over 180 countries, and being recognized as one of the top sustainable companies in the world reflects our commitment to global sustainability practices,” said Jim Levitt, president, Atlas Copco North America LLC. “In the United States, we have a number of ongoing initiatives that ensure we remain a good corporate citizen and contribute to Atlas Copco’s global efforts.”

Creating business value through sustainability is at the core of Atlas Copco’s products and service. Atlas Copco sustainability initiatives, both globally and in the U.S., include:

• Boosting customer energy-efficiency by at least 20 percent between 2010 and 2020
• Decreasing CO2 emissions
• Working actively to eliminate corruption
• Promoting access to clean drinking water in countries in need

In the U.S., sustainability initiatives include the purchase of renewable energy certificates to offset carbon emissions; reducing energy consumption through investments and upgrades along with establishing programs to increase recycling rates.

The Global 100 Most Sustainable Corporations in the World index evaluated 4,609 publicly listed global companies, which are measured against key sustainability indicators such as safety, performance and revenues in relation to consumption of energy and water. For more information, visit http://global100.org.

Atlas Copco is a world-leading provider of sustainable productivity solutions. The Group serves customers with innovative compressors, vacuum solutions and air treatment systems, construction and mining equipment, power tools and assembly systems. Atlas Copco develops products and service focused on productivity, energy efficiency, safety and ergonomics. The company was founded in 1873, is based in Stockholm, Sweden, and has a global reach spanning more than 180 countries. In 2013, Atlas Copco had revenues of BSEK 84 (BUSD 12.8) and more than 40 000 employees. Learn more at http://www.atlascopco.com.

Alternative Earth Resources: Progress Report Posted
Press Release (Vancouver, B.C.) January 27 — Alternative Earth Resources Inc. (“Alternative Earth” or “the Company”) (TSX.V: AER) today outlined progress in transitioning from geothermal to mineral resource development. The Company has cash or cash equivalents of approximately C$2.4M as a result of divesting itself of all of its former geothermal project assets.

Alternative Earth is currently reviewing several mineral exploration and development projects for potential acquisition. Additionally, the Company will attend AME BC’s Mineral Exploration Roundup conference through the week of January 26, 2015 to assess new project opportunities. Roundup is the largest gathering of mining and exploration companies, geologists, prospectors and other stakeholders in Western Canada held annually in Vancouver, BC.

Alternative Earth currently remains responsible for two geothermal wells at its former New Truckhaven property in California which is optioned to a third party. Well abandonment liabilities are approximately US$200,000; however, these wells are expected to be transferred along the well bonding responsibility to the Optionee, or alternatively, to the underlying geothermal rights owner(s) in the first quarter of 2015. Alternative Earth has previously recovered well bonds from former properties in Oregon and Nevada and would recover a further US$125,000 when the New Truckhaven wells are transferred.

Contact: Brian D. Fairbank, P. Eng. President & CEO, http://www.alternative-earth.com, Telephone: 604-688-1553, Toll Free: 866-688-0808, Email:bfairbank@alternative-earth.com. Investor Inquiries: Telephone: 604-688-1553, Toll Free: 866-688-0808, Email: info@alternative-earth.com. This Press Release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “potential” and similar expressions. These statements reflect our current belief and are based upon currently available information. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company’s actual results, performance or achievements to differ materially from those expressed in or implied by such statements. We undertake no obligation to update or advise in the event of any change, addition, or alteration to the information catered in this Press Release including such forward-looking statements.

U.S. Geothermal Provides Company Update
Press Release, January 26–U.S. Geothermal Inc. (TSX:GTH)(NYSE MKT:HTM), a leading renewable energy company focused on the development, production and sale of electricity from geothermal energy, provides this update on the results of its three operating projects for the fourth quarter of 2014, and the status of development activities.

OPERATIONS
Neal Hot Springs, Oregon: All three units have been, and are operating smoothly, with fourth quarter availability of 98.3%. Total generation for the fourth quarter was 54,472 megawatt-hours, which is a result of excellent availability and low seasonal temperatures. This compares to 32,246 megawatt-hours for the third quarter, 40,629 for the second quarter, and 56,047 for the first quarter, for a total generation at Neal Hot Springs for 2014 of 183,394 megawatt-hours. This compares to 155,428 megawatt-hours of generation for 2013, reflecting an 18% increase over the prior year.

Under the terms of our Power Purchase Agreement (“PPA”), November and December generation for 2014 was paid at a seasonally adjusted price of $123.34 per megawatt-hour, which is 120% of the 2014 average contract price, while October was paid at the average 2014 contract price of $102.78. For 2015, the average contract price will increase from $102.78 to $106.79 per megawatt-hour.

San Emidio, Nevada: The plant performance was exceptional, with fourth quarter availability of 99.2%. Total generation for the fourth quarter was 21,745 megawatt hours. This compares to 18,240 megawatt-hours for the third quarter, 15,686 for the second quarter, and 21,223 for the first quarter, for a total generation for 2014 of 76,894 megawatt-hours. This compares to 76,697 megawatt-hours of generation for 2013 reflecting continued, steady state operation of the facility.

Under the terms of our PPA, generation during the quarter was paid at the price of $91.17 per megawatt-hour. There is no seasonal adjustment under this power purchase agreement. For 2015, the contract price will increase from $91.17 to $92.08 per megawatt-hour.

Raft River, Idaho: The plant performance was exceptional, with fourth quarter availability of 97.3%. Total generation for the fourth quarter was 20,614 megawatt-hours, as a result of excellent availability and low seasonal temperatures. This compares to 18,501 megawatt-hours for the third quarter, 18,069 for the second quarter, and 21,614 for the first quarter, for a total generation for 2014 of 78,798 megawatt-hours. This compares to 77,560 megawatt-hours for the same period of 2013, reflecting continued steady state operation of the facility.

Under the terms of our PPA, November and December generation for 2014 was paid at a seasonally adjusted price of $72.86 per megawatt-hour, which is 120% of the 2014 average contract price, while October was paid at the 2014 average contract price of $60.72. For 2015, the average contract price will increase from $60.72 to $62.00 per megawatt-hour. In addition to the price paid for energy, Raft River currently receives $4.75 per megawatt-hour under a separate contract for the sale of Renewable Energy Credits.

“Our operations team has done an outstanding job during the year maximizing production from all of our facilities. Our units are all performing with exceptionally high availabilities, and with output that is at or above what we had expected. The total generation from all of our units for the full year of 2014 was 339,086 megawatt-hours, compared to 309,685 megawatt-hours for the full year of 2013, reflecting a fleet wide increase of 9.5% over the prior year period,” said Dennis Gilles, Chief Executive Officer of U.S. Geothermal. “As a result of this strong performance, we anticipate our projected year-end results should be at the higher end of the guidance range previously provided, and we look forward to continued excellent results for the coming year.”

DEVELOPMENT
WGP Geysers, California: A new transmission interconnection agreement has been applied for to the California Independent System Operator. Engineering optimization of the power plant design continues. The current well field reservoir model is being updated to reflect a new hybrid plant design that includes both water and air cooling, which will dramatically increase the volume of water available for injection back into the reservoir. Traditional water cooled steam plants re-inject approximately 20% of the water that is removed during power generation, while a hybrid design may re-inject up to 65% of the water. This higher injection rate will provide longer term, stable steam production, and will result in increased power generation over the life of the project.

A new conditional use permit application is being prepared for submittal to local regulatory agencies to replace the current conditional use permit that expires in July. A flow testing program for the production wells is being designed and will be scheduled during the first half of the year. During the quarter we responded to RFP’s from WAPA-Navy and Stanford University for renewable energy PPA’s, but unfortunately neither of the bids was selected.

San Emidio Phase II, Nevada: To further define the resource and confirm that it can support the Phase II plant, two additional wells (OW-14 and OW-15) were completed on the BLM administered land. While the wells extended the high temperature outline of the South Zone, neither well encountered the commercial permeability seen in Well 61-21 (OW-10). A cross tie pipeline was installed between the San Emidio Phase I and Phase II projects. Well 61-21 was connected and is producing 620 gpm of 297°F fluid to the San Emidio Phase 1 power plant as part of a long term flow test of the South Zone portion of the reservoir. San Emidio Phase I plant generation has increased approximately a half of MW.

Permitting for an expanded temperature gradient drilling program is underway for an area south west of the current resource. Results from the recent OW drilling program combined with 1970s era, shallow temperature gradient data, indicate a high temperature trend into this south-west zone. Geophysical surveys have also identified structural trends in this area. Several 1,000 foot deep temperature gradient wells are being permitted to follow up on this portion of the resource.

NV Energy issued a Request for Proposal (“RFP”) from NV Energy for 100 megawatts of renewable energy on October 1st. We submitted a bid for an air cooled power plant to be developed on the Phase II project site. In early December, NV Energy submitted a request to the Nevada Public Utilities Commission (“NPUC”) that the 2014 solicitation be combined with the 2015 solicitation for a total of 200 megawatts to be procured in 2014. The request also allows re-submittal of any projects that had been previously submitted for the original 2014 RFP. We plan to submit an alternative option into the new solicitation that uses a water cooled plant as the basis if the NPUC approves the request.

El Ceibillo, Guatemala: During the year we completed the drilling associated with our resource delineation program, and obtained surface leases for an additional 97 acres. A new drill pad, pond and cellar for EC-2, our planned new well, was completed. EC-2 is located on the new surface leasehold. Drilling of EC-2 is expected to begin as soon as the approval to extend the development schedule contained in the concession agreement has been obtained from the Guatemalan Ministry of Energy.

Our attempts to obtain approval of our modified development schedule from the Guatemala Ministry of Energy (“MEM”) continue. Our request has been approved by the MEM legal department and is now being evaluated by the technical department. As a result of the delays in approval of the modified schedule, we requested an extension of our Memorandum of Understanding for a Power Purchase Agreement with the regional electricity broker. Our initial request was declined, but discussions are continuing regarding the terms of the memorandum and how it may be re-instated or renegotiated.

Crescent Valley, Nevada: In light of recently passed federal legislation that extended the qualification for the 30% Investment Tax Credit to projects that began construction prior to December 31, 2014, drilling of the first production well CVP-001 (67-3) was initiated in December of 2014 following completion of gravity surveys, and analysis of prior temperature gradient drilling data. The first string of production casing was set and cemented before year end, and drilling operations on Well 67-3 are continuing.

Neal Hot Springs, Oregon: A permit has been applied for to drill a water well at the Neal Hot Springs project. The water well will be tested for sustainable delivery, and if commercially successful, it would be used to support the installation of a water cooling system for the facility. The ability to use water cooling during the 5-6 months of summer and fall would increase power generation, when current air cooling results in a dramatic reduction in plant output.

Gerlach, Nevada: Drilling of well 18-10A was completed in late November. The well was drilled to a total depth of 2,889 feet, and encountered a maximum temperature of 275F.

MERGERS AND ACQUISITIONS
Our focus on M&A activities remains very active. As noted previously, the merger of Earth Power Resources (“EPR”) into U.S. Geothermal was completed on December 12, 2014. The EPR acquisition adds high quality development projects to the company’s pipeline, including the Crescent Valley prospect which is discussed above.

We are continuing due diligence on a number of other excellent opportunities that encompass operating projects, advanced development projects and green field opportunities.

REGULATORY UPDATE
Recent developments in the market are encouraging for the growth of renewable energy, and more specifically to geothermal energy in our opinion.

In Washington, D.C., legislation was passed by the house and senate that extended the tax credits available to new geothermal plants. Under the approved legislation, projects that began construction by December 31, 2014 would be eligible for a 30% Investment Tax Credit (“ITC”), or alternatively a 10 year Production Tax Credit (“PTC”).

In California, the signing into law of AB-2363 earlier this year by the California Governor, will require the California Public Utilities Commission to establish the appropriate adders (integration cost) for each technology that must be used when evaluating bids for long term wholesale power contracts. We believe this change will add appropriate costs to wind and solar power generation due to their intermittent deliveries of power, which then should allow base load renewables like Geothermal and Biomass to compete for PPAs with Investor Owned Utilities based on a more accurate comparison of the full cost for power. That has not been the case in the past.

In the State of Nevada, in 2013 the legislature mandated that the utilities in the state must purchase 300 megawatts of renewable energy from independent power producers to replace retiring coal generation. NV Energy has issued their first of 3 Requests for Proposal for 100 MW of renewable energy. This creates a solid market of 100 MW per year for each of the next three years, which provides our company with a local option for selling power from both our existing and new projects.

“We are very pleased with our accomplishments to date, and are optimistic with the growth opportunities that lie ahead for our company and its shareholders,” said Dennis Gilles, Chief Executive Officer of U.S. Geothermal Inc. “We are currently well capitalized, and with the addition of our positive cash flows from operations, are well positioned to fund internal development, and growth through strategic M&A activities, as was demonstrated this year with our Geysers and Earth Power acquisitions which we acquired without going to the market for capital.”

NV Energy Seeks Another 100 MW Renewables
NV Energy is seeking proposals for another 100 MW of new renewable energy resources in southern Nevada. Combined with a previous 100-MW 2014 RFP this means up to 200 MW of new green energy. For clarification: the utility seeks revised bids for the first 100 MW RFP and new bids for the second 100 MW RFP. NV Energy has a portfolio of 20 geothermal energy plants as well as solar, hydro, wind, biomass, methane and waste-heat recovery projects. On February 3 there will be a Bidder’s Conference Webinar, and Revised or New Bids are due February 16. The Bidders Registration and Contact Information Form and more information is available at www.nvenergy.com.

Comment Period Extended for California Desert Renewables/Conservation Plan
The agencies behind the Desert Renewable Energy Conservation Plan (DRECP) have extended the public comment period to February 23. The Geothermal Energy Association has been a member of the Stakeholder Group throughout the DRECP study process. Karen Douglas, commissioner with the California Energy Commission, told press she “hopes to see a final document this summer and a record of decision within the year.” The 8,000-page report is intended to facilitate development for projects cited in less sensitive areas. It addresses issues related to endangered species conservation, cumulative development impact and related matters. See the draft, instructions for commenting, and more at http://www.drecp.org/.

KenGen Seeks Manufacturers, Equipment Dealers
The Kenya Electricity Generation Company (KenGen) is looking for manufacturers and authorized dealers to supply parts and equipment to their power stations. A call for expressions of interest has been released inviting eligible, experienced and qualified companies to express interest in being shortlisted to submit proposals for the contract. One tender is for “Pre-qualification of manufacturers and authorized dealers for supply of all types of filters for KenGen Power Stations” (PDF) and the second is for “Pre-qualification of manufacturers and authorized dealers for supply of pumps, spares, and repairs” (PDF). Both tenders share a closing date of February 9 for EOI submission.

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