Geothermal, a company boldly pioneering the most abundant source of renewable energy on the planet, producing electricity from the tapping/harvesting of the planet’s own core temperature, reported signage of a memorandum of understanding to negotiate a key power purchase agreement on one of their concessions near the populous Guatemala City (El Ceibillo Project), between the company’s wholly-owned subsidiary, U.S. Geothermal Guatemala, S.A., and one Central America’s biggest distributors.
This vital 24.7k-acre concession, awarded to the company back in April, sits in the heart of the Aqua and Pacaya twin volcano complex. With nine existing 560 to 2k foot wells, six of which gauge in the 365°F to 400°F range and strong indications (high conductive thermal gradients) of a highly permeable, geometrically hotter with depth reservoir below the existing well field, HTM is sitting on a power gold mine just outside of Guatemala’s capital, one of Central America’s largest cities with a huge outlying population.
Today’s announcement of a memorandum of understanding, which will serve as a framework for the power purchase agreement, gives HTM a really solid footing in the region and contains stipulations for a 15-year purchase window at up to 50MW per year. Given the further stipulation of a regionally competitive pricing model that should account nicely for prevailing conditions, as per a yearly average of $145.00 per MWh (Guatemalan wholesale market administrator figure), we have a tidy little package deal emerging for HTM’s fourth project, in addition to the thriving generation projects in Idaho, Nevada, and Oregon.
With the geothermal reservoir confirmation via an independent engineering firm remaining, in addition to permitting and other clearances, as well as locking down the capitalization, the power purchase agreement will be well-served by due diligence over the coming months. U.S. Geothermal is bucking hard to make their Central American position into a real winner here.
Developing this kind of ultra clean, ultra renewable energy by harnessing the raw power of the earth’s core, far surpasses all other forms of conventional generation, which merely expend a fuel source to produce heat/stream in most cases anyways (to turn a turbine). U.S. Geothermal plans to not only work over the existing well set but deepen them and introduce new wells, ultimately gearing towards the choice heat down in the 410°F to 446°F range.
CEO of HTM, Daniel Kunz, outlined how the power purchase agreement secured by the memorandum would lead to some exceptional long-term economic viability, asserting that the planned roll out of an initial 25MW (double flash steam-based) system could start providing renewable power to the massive market soon, while helping to offset Guatemala’s lagging dependence on imported fossil fuels.
Logistical success should make the 2015 production target a snap, and beyond the sweet financial metrics, investors will have to marvel at how companies like HTM are today realizing the incredibly vast potential of geothermal. With operating assets in Raft River, Idaho, and San Emidio, Nevada, in addition to their startup in Malheur County, Oregon, the company is wielding around 69.5k acres of prime geothermal territory and stands poised to be one of the real success stories of the industry.
For more information on U.S. Geothermal, please visit the company’s website at: www.USGeothermal.com
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