www.businessweek.com
May 17, 2010
May 18 (Bloomberg) -- Mighty River Power Ltd., operator of the world's largest single-turbine geothermal generating unit, has increased funding to help identify and build power projects in the US and Chile. The company today announced a $107 million investment in a $400 million, 49.9MW geothermal power plant in Southern California, its first in the US The New Zealand government-owned generator said it has also more than doubled to $250 million a fund available for projects identified by its Denver, Colorado-based associate GeoGlobal Energy LLC.
"GGE's capability in identifying potential projects in the US as well as Chile has really started to bear fruit," Mighty River Chief Executive Officer Doug Heffernan said in a phone interview from Auckland today. "We think there are some other prospects that they may well bring to the table in the US over the next two or three years."
Mighty River is among the world's 10 largest operators of underground steam fields. It's investing internationally to profit from its experience building large-scale geothermal power projects, its relationships with bankers and plant manufacturers, and increasing global demand for non-polluting energy.
Geothermal plants tap heat from the earth to power turbines and generate electricity 24 hours a day with minimal emissions. New Zealand, Chile and the west coast of the US lie on the 40,000-kilometer (25,000-mile) chain of active volcanoes that surrounds the Pacific Ocean. The zone, known as the Ring of Fire, also includes Japan and Indonesia.
Hudson Ranch
Today's investment gives Mighty River a 20% stake in EnergySource LLC, which is building the Hudson Ranch power station in the Salton Sea geothermal region of Southern California. It will use the Fuji Electric Systems Co, machines that Mighty River has installed in New Zealand the past two years, including its 140MW Nga Awa Purua plant, the world's largest single-turbine project.
"The construction experience that Mighty River has had with that technology provided a great fit for GGE and its new partners," Heffernan said. Mighty River runs four geothermal power plants in New Zealand and has just been granted planning approval to build a fifth. It plans to have a 70MW generator operating in Tolhuaca in Chile by 2013 in a project also managed by GeoGlobal.
The Hudson Ranch plant will take about two years to build and will supply Arizona-based utility Salt River Project, Heffernan said. The balance of the project cost is being met by EnergySource and a group of eight international banks, led by ING Capital LLC, Societe Generale and WestLB AG.
"It's an illustration that project financing for renewable and geothermal projects is underway," he said. "This will be one of the bigger projects that has got forward in the geothermal space, and I guess it's a demonstration that the US is serious about shifting to renewable energy."
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