Department of Energy Finalizes $96.8 Million Loan Guarantee for Oregon Geothermal Project

February 24, 2011

Project will use First-of-a-Kind Technology that could Expand Geothermal Resource Development

Energy Secretary Steven Chu today announced that the U.S. Department of Energy (DOE) finalized a $96.8 million Recovery Act supported loan guarantee to a project sponsored by U.S. Geothermal, Inc. to construct a 23 megawatt (net) geothermal power project in Malheur County, in southeastern Oregon. The company estimates that the project, known as Neal Hot Springs, will create approximately 150 construction jobs, over a dozen permanent jobs and many more supply chain jobs across several states, including Texas, California and Ohio.

"Increasing the supply of renewable energy through projects like U.S. Geothermal's will help us reach the President's goal of generating 80% of our electricity from clean energy by 2035," said Secretary Chu. "The Neal Hot Springs project will provide clean renewable energy directly from our nation's vast natural resources while simultaneously creating jobs and helping to promote energy independence."

"With the finalizing of this loan, southeastern Oregon's economy can heat up thanks to geothermal energy technology," U.S. Senator Ron Wyden said. "This loan will create more than 150 construction jobs, more than a dozen permanent jobs and will be a real economic shot in the arm and another example that when it comes to renewable energy technology, Oregon is on the right side of history."

"Right now Oregonians need jobs and that is exactly what this project will deliver," said U.S. Senator Jeff Merkley. "This is great news for Vale and for the future of clean energy jobs in Oregon. Our state can be the worldwide leader in geothermal energy production, and this project brings us closer to that vision."

The project uses an improved technology to extract energy from rock and fluids in the Earth's crust more efficiently. The technology, referred to as a supercritical binary geothermal cycle, is estimated to be more efficient than traditional geothermal binary systems, allowing lower-temperature geothermal resources to be used for power generation. Unlike coal-fired and natural gas-fired power generation plants, geothermal plants produce virtually no greenhouse gas emissions.

The company anticipates about 95% of the power plant's infrastructure and parts will be supplied by U.S.-based manufacturers. In addition, the project's total output will be sold to Idaho Power Company under a long-term power purchase agreement. With the 25-year agreement in place, the project is well positioned to accommodate anticipated population growth and renewable energy demand in the region.

The Department of Energy, through the Loan Programs Office, has issued loan guarantees or offered conditional commitments for loan guarantees totaling nearly $18 billion to support 19 clean energy projects. The program's eight generation projects alone will produce nearly 23 million megawatt-hours or enough to power almost two million homes. Additional DOE-supported projects include two of the world's largest solar thermal projects, the world's largest wind farm, and the nation's first nuclear power plant in three decades. For more information, please visit the DOE Loan Programs Office website.