Geothermal Financing Woes Hamper CA Energy Goals

Source:

"California energy woes highlight need for geothermal project financing."

Riverside Public Utilities is the 8th largest electric power utility in California, serving 107,000 customers. Like its bigger cousins in the sunshine state, it is aggressively pursuing renewable energy targets. But its high goal is threatened by the collapse of financing for a geothermal project it signed a contract for—that would have raised the supply of its renewable energy to 37%.

While the other state utilities plan to meet the 33% target by 2020, it has plans to be 50% renewable by then. But it has just had an obstacle to meeting its next target, according to Leora Broydo Vestel at Energy Prospects.

In 2008 it signed a contract for a 30-year power-purchase agreement with tribally owned Shoshone Renaissance for the energy from a 46 MW geothermal project to be built in Utah. But the company has been unable to secure financing for the project. The power was to have been supplied at a very competitive $77 per megawatt hour.

The utility expected that the first 32-MW phase of the project would be complete and producing energy in early 2010, with the second 32-MW unit coming on line a year later, but as the company had difficulties in finding financing, the size of the project was scaled back to 46 MW.

The Riverside Board of Public Utilities recently approved the termination of the PPA for failure by Shoshone Renaissance to meet milestones set forth in the contract.

So Riverside Public Utilities remains—for now—with its current level of renewable energy. It currently gets just over the typical (because it was mandated) Californian utility rate of 20% renewable energy—although it counts hydro-electric power towards that goal: the big utilities are not allowed to include hydro as a renewable source.

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