Department of Energy Awards More Than $11 Million to Advance Innovative Geothermal Energy Technologies

U.S. Energy Secretary Steven Chu today announced that eight projects in five states - California, Connecticut, Louisiana, Texas, and Utah - have been selected to receive up to $11.3 million to support the research and development of pioneering geothermal technologies.  The projects selected today will foster innovation in the technologies and methods used to generate geothermal energy, which will help strengthen U.S. energy security and increase America's competitiveness in the global clean energy economy. Continued innovation and technical advances will also help geothermal energy to play an important role in achieving President Obama's goal of generating 80 percent of U.S. electricity from clean energy sources by 2035.

"Through these eight projects, the Department of Energy is investing in new technologies that will further develop the nation's geothermal resources and help diversify our energy portfolio," said Secretary Chu. "By investing in geothermal research and development, we are investing in our nation's energy future and creating opportunities for energy innovation in the U.S."

The projects aim to develop fundamentally new ways of producing electricity from the Earth's heat. Selected projects will conduct feasibility studies in Phase I, including technical and economic modeling and component design for technologies that recover geothermal heat for electricity production. If selected for Phase II, projects will then validate the designs in real-world environments. The selected projects are part of the Department's comprehensive efforts to reduce the cost of geothermal energy to be competitive with conventional sources of electricity.

Selected awardees are as follows:

GeoTek Energy, LLC (Midland, Texas) - up to $2.85 million
The Gravity Head Energy System project will study the technical feasibility of a new generation of gravity-driven downhole pump.

Gtherm, Inc. (Westport, Connecticut) - up to $200,000
The Single Well Engineered Geothermal Systems project will investigate the technical feasibility, heat extraction potential, and cost impact of a single well geothermal system.

Lawrence Berkeley National Laboratory (Berkeley, California) - up to $4.99 million
The Geothermal Energy Coupled with CCS: Heat Recovery Using an Innovative High Efficiency Supercritical CO2 Turboexpansion Cycle project will develop new ways to produce electricity from superheated and pressurized carbon dioxide (CO2) in deep geothermal formations.

Lawrence Livermore National Laboratory (Livermore, California) - up to $874,000
The Active Management of Integrated Geothermal - CO2 Storage Reservoirs: An Approach to Improve Energy Recovery and Mitigate Risk project will study the technical and economic feasibility of integrating geothermal energy production with carbon capture and storage.

Louisiana State University (Baton Rouge, Louisiana) - up to $997,000
The Zero Mass Withdrawal, Engineered Convection and Wellbore Energy Conversion project will evaluate the technical and economic feasibility of technologies that circulate reservoir fluids to increase heat extraction.

Physical Optics Corporation (Torrance, California) - up to $200,000
The Heat Extraction from Geothermal Systems project will investigate the technical feasibility, heat extraction potential, and cost impact of an innovative wellbore condenser technology. This technology converts hot vapor into cooler liquids at high efficiencies, which could help generate greater geothermal power. 

Terralog Technologies USA, Inc. (Monrovia, California) - up to $541,000
The Advanced Horizontal Well Recirculation Systems for Geothermal Energy Recovery project will investigate and develop advanced geothermal well designs that optimize combinations of vertical and horizontal wells.

University of Utah (Salt Lake City, Utah) - up to $671,000
The Novel Development of Geothermal Systems in the United States project will assess the electric generating capacity, economics, and environmental impacts of developing deep sedimentary and crystalline reservoirs throughout the entire United States.

DOE's Geothermal Technologies Program works in partnership with U.S. industry to establish geothermal energy as an economically competitive contributor to the U.S. energy supply.

Ormat Technologies Awarded BOT Agreement for 45 MW Geothermal Power Project in New Zealand

Ormat Technologies, Inc. today announced that its subsidiary has entered into a Build, Operate and Transfer Agreement ("BOT Agreement") with Tikitere Geothermal Power Limited ("TGL") to explore, develop, supply, construct, own and operate a geothermal power plant in the Tikitere geothermal area near Rotorua, New Zealand. Ormat was awarded the project following a competitive bidding process initiated by TGL.

TGL was established as a joint venture vehicle for the various Maori trusts that own and administer the land.  TGL's shares are held by the Tikitere Trust. The field from which the energy will be drawn is owned by the Tiki Tere Trust, Paehinahina Mourea and Tiki Tere A (Aggregated) and the Manupirua Ahu Whenua Trust. The wells will be sited on land owned by the Paehinahina Mourea Trust.

Under the BOT Agreement, the parties will jointly develop a geothermal power plant with an estimated capacity of approximately 45 MW. The project will be operated by Ormat, which shall be the project's beneficiary for an initial period of 14 years following commercial operation and then 100 percent of ownership interests in the project shall be transferred to TGL. During the BOT period, TGL will receive an income stream while a coordination committee, comprised of representatives from both parties, will monitor the operations of the project in order to protect and promote the heritage and cultural values of the Maori land owners.

The project will utilize Ormat's generating units, similar to those already deployed in 12 geothermal projects in New Zealand, totaling approximately 260 MW.

The BOT Agreement is conditional upon receiving regulatory approval. Construction of the power plant will commence following the obtaining of local permits, as well as satisfactory feasibility results following exploration and development activities to be carried out by Ormat.

Jim Gray, Director of TGL, said, "Following the competitive bidding process we ran to find the most suitable project partner, we are pleased to be joining forces with Ormat on this project, the true value of which goes far beyond its economic and commercial success. Through the involvement of Ormat Technologies, and the human, cultural and community values shared by all those involved, this is truly a paradigm shift for New Zealand Maori in the fulfillment of our vision."

"We thank TGL and the trusts for their confidence in Ormat," said Lucien Y. Bronicki, Chairman of the Board and Chief Technology Officer of Ormat Technologies. "As the first BOT project for Ormat in New Zealand, this will diversify Ormat's portfolio that today includes operations in the U.S., Guatemala, Nicaragua and Kenya. Upon completion, it will expand our existing portfolio by approximately 8 percent. As with previous developed projects in New Zealand, Ormat will maintain close cooperation with local contractors and engineering firms."

The new plant will optimize energy utilization by converting the heat of both geothermal steam and brine from geothermal wells into electrical power. Like all Ormat plants in New Zealand, the Tikitere plant will reinject 100 percent of the geothermal fluid by using air cooling without any water consumption.  The 100 percent reinjection serves both to sustain the reservoir and produce electrical power with virtually no environmental impact.

Ormat Technologies Offered Conditional Commitment for DOE Loan Guarantee

Ormat Technologies, Inc. today announced its subsidiary, Ormat Nevada Inc. (“Ormat Nevada”) received an offer of a conditional commitment from the DOE that would provide a partial guarantee for up to a $350 million loan to support a geothermal power project expected to generate up to 121 MW of power from three Nevada based facilities built in two phases.

The three facilities -- McGinness Hills, Jersey Valley and Tuscarora -- will provide clean and baseload power through 20-year power purchase agreements with Nevada Power Company, a subsidiary of NV Energy.

Dita Bronicki, CEO of Ormat Technologies said, “The DOE 1705 program provides us with financing terms that enables us to finance a portfolio of facilities that are being developed in two phases. This innovative approach to project finance was made possible thanks to the DOE loan guarantee. We are thankful to the DOE’s Loan Programs Office and the rest of the team that moved the project thus far, and will continue working towards the closing of this transaction.”

The facilities utilize Ormat’s proprietary OEC technology, which are commercially proven and installed in approximately 1,370 MW of geothermal power plants and other electricity generating systems around the world. The OEC employs a binary organic Rankine cycle, with hot water drawn from wells deep below the Earth’s surface. The water’s thermal energy is used to heat a secondary fluid that is vaporized and then forced through a turbine to generate electricity.

Lender-applicant, John Hancock Life Insurance Company (USA) submitted the application under the Financial Institution Partnership Program (FIPP).

Ormat Technologies Secures $20 Million Contract for its Product Segment Backlog

Ormat Technologies, Inc. announced this week that its subsidiary entered into a supply contract with Norske Skog Tasman Limited of New Zealand ("Norske Skog") to supply a new geothermal power plant that is to be constructed in the Kawerau Geothermal Field in New Zealand. The contract is valued at a total of approximately $20 million and delivery of the power plant is expected to be completed within 13 months from the contract date.

Norske Skog is a world leader in the use of renewable energy in the production of newsprint, with a history of over 50 years of utilization of geothermal energy from the Kawerau field in New Zealand. This new project will mean a substantial proportion of the Mill's electricity needs will be provided directly or indirectly from renewed geothermal energy.

Dita Bronicki, CEO of Ormat Technologies, said, "This new contract is Ormat's fourth geothermal installation in the Kawerau field. We are excited for the opportunity to once again supply our equipment in New Zealand and take part in the efforts to achieve the New Zealand government's target for greenhouse gas emissions reductions to between 10% to 20% below 1990 levels by 2020 and increased renewable electricity generation to 90% by 2025."

Ms. Bronicki concluded, "This contract increases our products backlog as of March 31, 2011 to $104 million. We view this contract as a demonstration of the reliability of Ormat's solutions and it further reinforces the applicability of our renewable energy solutions to the world electricity markets."

Ormat has been actively designing and supplying geothermal power solutions in New Zealand since 1986. The Norske Skog plant will mark over 250 MW, and the 13th geothermal power plant, built by Ormat in New Zealand. The new plant will use air-cooled condensers and allow 100% geothermal fluid reinjection, which serves both to sustain the reservoir and to produce electrical power with virtually no environmental impact. The geothermal power plant will utilize the hi-performance, hi-efficiency ORC turbine developed by Ormat for geothermal and recovered-energy applications.

World Geothermal Leaders Come Together for International Agreement

The members of several leading national geothermal trade and business associations have joined together to establish an international geothermal business coalition in conjunction with the Geothermal Energy Association (GEA) 2011 Geothermal Energy Technology and International Development Forum.

The new International Geothermal Business Coalition, founded by the European Geothermal Energy Council, the US Geothermal Energy Association, the Canadian Geothermal Energy Association, the Australian Geothermal Energy Association, and the Chilean Geothermal Energy Association, will represent the leading companies involved in developing geothermal resources to meet energy needs across the world.

“Supporting a range of government policies that can provide support for the development of geothermal resources is our priority,” said Philippe Dumas of the European Geothermal Energy Council. “We will call upon each country to assess the potential of geothermal and develop effective long-term incentives and policy supports for this growing renewable industry.”

Geothermal power presently supplies the world with 10,715 Megawatts of electricity in 24 countries on six continents. The potential to use geothermal resources is much greater. With the technology available today and under development for the future, geothermal resources could supply more than 300,000 Megawatts of power, while producing far fewer carbon emissions than from legacy sources.

"Geothermal energy can provide competitively priced, renewable, round-the-clock energy to the markets our organizations represent and beyond that. At the same time geothermal energy can be a part of the solution to growing concerns about securing sustainable, cost-effective energy sources," said Alexander Richter, Director of the Canadian Geothermal Energy Association. "We are therefore looking very much forward working together as part of this international geothermal business coalition, to promote the vast potential of geothermal energy worldwide, but also the tremendous market opportunity for companies participating in the growth of the industry."

The new geothermal coalition will work to expand efforts to utilize these valuable geothermal resources in every nation. With the vast potential that geothermal has to create clean, renewable baseload energy and bring jobs to the nations that embrace it, the coalition leaders will work to ensure that geothermal resources are not ignored in national and international energy plans.

“International and multi-national organizations will also be vital to supporting geothermal resource assessment, technology development, and the development of global policies and financial incentives to expand the use of geothermal resources,” said Fernando Allendes, President of the Chilean Geothermal Energy Association, ACHEGEO

The GEA International Forum, where this new coalition was announced, brought over two hundred industry leaders, foreign diplomats, financiers and government officials together to participate in discussions on the geothermal market today, projects under development in the U.S. and internationally, and the outlook for the future of the geothermal market.

“This gathering has again shown the importance of the growing global geothermal market and how supportive government policies are key to fueling its growth,” said Karl Gawell, GEA Executive Director and Chairman of the Department of Commerce Renewable Energy and Energy Efficiency Advisory Committee. “As we see people across the globe clamoring for safe, clean, and renewable power, the geothermal industry can help meet those demands if government policies recognize the potential of geothermal energy.”

“Given its unique and wide ranging benefits including its baseload capability, relative low cost to other generation technologies and that it doesn’t produce waste materials that need to be dealt with by future generations, it is vital that governments provide funding and support to develop their geothermal industries equal to, if not greater than, that provided to other technologies,” said Susan Jeanes, Chief Executive of the Australian Geothermal Energy Association.

U.S. Department of Commerce and U.S. Department of Energy Join with GEA for Geothermal Energy Technology and International Development Forum

Geothermal industry leaders from the United States and abroad are set to come to Washington, DC on Wednesday, May 4 for the Geothermal Energy Association (GEA) 2011 Geothermal Energy Technology and International Development Forum at The Ronald Reagan Building and International Trade Center. The event, hosted by GEA with participation by the U.S. Department of Commerce and U.S. Department of Energy, will paint a clear picture of the rapidly growing geothermal markets at home and abroad.

“Geothermal markets continue to grow at a strong pace even as some other technologies have faltered lately,” said Karl Gawell, GEA Executive Director and Chairman of the Department of Commerce Renewable Energy and Energy Efficiency Advisory Committee. “The baseload power that geothermal creates safely and renewably 24 hours a day is in increasingly high demand across the world. It’s a smart solution to our energy needs and that is being recognized more and more.”

Along with The U.S. Department of Commerce, the U.S. Department of Energy and industry partners including Gold Level Sponsor Atlas Copco and conference sponsors Enel Green Power, Pratt and Whitney, GeothermEx, and the Institute of Earth Science and Engineering, the forum will be widely attended with over two hundred industry leaders, foreign diplomats, financiers and government officials expected to participate.

The program will showcase geothermal projects, trends, and governmental policies in the U.S. and around the world, including the geothermal market today, projects under development in the U.S. and internationally, outlook for the future of the geothermal market, jobs and money, new technologies, and federal agency support at home and abroad.

The forum will feature speakers from the U.S. Senate Energy & Natural Resources Committee, Chadbourne & Parke LLP, University of Nevada at Reno, Gradient Resources, US Geothermal, Ormat, Export-Import Bank, USAID, U.S. Trade and Development Agency, and many others.

For more information, including the full agenda, visit: http://www.geo-energy.org/events/May2011_ShowcaseForum.aspx.

Mustang Geothermal Launches New Website

MUSTANG GEOTHERMAL CORP announced today the launch of its redesigned corporate website that delivers the very latest information about the Company and its exploration and development activities. The new website address is www.mustangeothermal.com.

Richard Bachman, the President and CEO of the Company stated, "We want our website to provide a snapshot of the Company and an up to date description of our most advanced projects as they move forward. There is significant interest in the renewable energy industry generally, and specifically in the geothermal energy segment, so, we are very pleased to launch our website with a new look and comprehensive navigation to facilitate our commitment to communicate with our shareholders."

Geothermal energy refers to the power generated using heat from the Earth's core. It is considered renewable energy because this energy captures the nearly infinite heat that is generated by ongoing heat-processes at the molten core of our planet. The world's first geothermal power plant was constructed in 1911 in Larderello, Italy, and continues to generate power to the present day!

It is Mustang's objective to discover, develop, and operate a geothermal power plant within the next three years.  Mustang owns a 100% interest in 6,620 hectares (16,350 acres) of Federal geothermal leases in five project areas in the State of Nevada.  

In 2010 the State of Nevada had 19 privately owned, geothermal power plants, producing a total 2.06 million megawatt hours (MWH) of renewable electrical power for sale, providing the power needs to approximately 180,000 households for one year. The value of geothermal power generated in Nevada in 2010 is estimated at 268 million dollars based on price of $0.13 per kilowatt-hour paid by the average Nevada household.

Nevada ranks second in geothermal electrical power production in the United States behind California.  Mustang is planning for the commencement of exploration activities on high priority targets identified on its geothermal properties in Nevada. The Company is negotiating with contractors on the availability of a drill rig for the 2011 field season in Nevada.  Additionally, the Company has mobilized geologic field teams for ground truthing and water testing of thermal springs on its Nevada properties.