Following completion of its initial funding phase, Raser Technologies is set to proceed with the construction of its 10 megawatt (MW) Thermo geothermal power project near Beaver, Utah. Tax equity capital has been provided in exchange for tax benefits provided by the renewable energy project.
The plant is designed to power approximately 9,000 homes with zero emissions and will utilize PureCycle® geothermal power systems from UTC Power, a subsidiary of United Technologies Corp. As the hands-on general construction contractor, Raser has guaranteed the completion of the project by October. The life of the plant will be approximately 35 years. However, the useful life of the geothermal resource is to be renewable and to outlast the life of the power plant itself.
Raser believes that the power plant could eventually produce additional power through “cascading” or “bottom cycling.” This finding is based on the results of an independent study done by GeothermEx, Inc., which found that Thermo resource and wells had sufficient heat and flow to eventually produce as much as 230 MW of geothermal power.
The thermo power plant is to be monitored by a “special purpose entity,” which will handle debt service, maintenance, operations expenses, and payment of fees to Raser and the tax equity partner. As part of the agreement, Raser will immediately receive approximately $14 million in reimbursement funds for construction costs incurred prior to closing the project financing. Financial details are disclosed on the company’s Website.
Under the purchase agreement plan, Raser will sell the renewable power generated by the Thermo plant at a price of $78 per megawatt hour, with a 2% annual price increase, for a blended average price of approximately $95 per megawatt hour over the 20-year term of the agreements.
“We are excited to have this important milestone completed. This closing allows Raser to continue moving forward with our rapid deployment plans. Further, we are proud to say that this first plant is scheduled to be on line, producing and selling power, in six months from our groundbreaking in May of this year, stated Brent M. Cook, Raser’s CEO.
Raser, a publicly traded company, operates in two business segments. Raser’s Power Systems segment is attempting to develop clean, renewable geothermal electric power plants and bottom-cycling operations, incorporating licensed heat transfer technology and Raser’s Symetron™ technology developed internally by its Transportation and Industrial Technology segment.
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