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Canadian-Israeli Geo-Thermal project, backed by Reid, supported by grants & guarantees, failing

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posted on Oct, 2 2011 @ 11:09 PM
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With the Obama Dept. of Energy rushing billions of $$ in new loan guarantees before 09/30/11 deadline, comes news that a foreign consortium with hundreds of millions in DoE grants, guarantees and Harry Reid's support is losing money hand-over fist and is about to default on its loans, kicking-in more taxpayer guarantees.


In a remote desert spot in northern Nevada, there is a geothermal plant run by a politically connected clean energy start-up that has relied heavily on an Obama administration loan guarantee and is now facing financial turmoil. The company is Nevada Geothermal Power, which like Solyndra, the now-famous California solar company, is struggling with debt after encountering problems at its only operating plant.

After a series of technical missteps that are draining Nevada Geothermal’s cash reserves, its own auditor concluded in a filing released last week that there was “significant doubt about the company’s ability to continue as a going concern.”

www.nytimes.com...

The company is based in Canada and is working with an Israeli company run, in part, by associates of Nev. Sen. Harry Reid. Reid recently helped obtain $350 million in guarantees for the Israeli affiliate.

Just last month, again with Mr. Reid’s support, Ormat secured its own Energy Department loan guarantee, worth $350 million, to help support three other Nevada geothermal projects that are expected to produce 113 megawatts of power.

During the tour, Mr. Reid had a chance to see electric generation equipment installed by a company called Ormat Technology, which is a Nevada Geothermal partner. Ormat’s lobbyist in Washington, Kai Anderson, and one of the company’s top executives, Paul Thomsen, are former aides to Mr. Reid.

Mr. Reid has received some support from the industry, in the form of at least $43,000 worth of campaign contributions from the geothermal industry since 2009, according to an analysis of federal campaign finance records.


The plant has failed to deliver as promised or projected, and has lost over 90% of its investment capitalization since opening and receiving the DoE's backing.


Yet when the plant started up in October 2009, only 27 megawatts of net power were initially generated from the hot water pumped from the earth. That was not enough for the company to honor its commitment to the electric utility company, or to pay back a $91 million loan — carrying 14 percent interest — that it has with a Washington-based investment firm.

Through modifications at the Blue Mountain site in Nevada — drilling new wells to produce more steam — the company has been able to get the net power output up to a steady 35 megawatts. But, as the annual report released last week reiterated, that was still not enough production to cover the company’s loans and operating costs.

Early last year, it was forced to shut down for more than a month, after a “faulty layout of underground cables” caused a short circuit, a company statement said. Tests by the company also show that because of mistakes made in how the wells were set up, the water temperature is dropping, potentially meaning a drop in future power production.

That explains why in recent months, shares of geothermal companies have collapsed, dropping far more than the shares of most renewable energy businesses. Nevada Geothermal, as of the market close Friday, was trading at 10 cents a share, down from $1.24 when its plant opened in 2009.

Obama administration officials knew about most of these difficulties before the Energy Department agreed in September 2010 to partly guarantee a second major loan to Nevada Geothermal, worth $98.5 million.

Nevada Geothermal executives, meanwhile, are working to renegotiate their $91 million, high-interest loan to avoid a default, which could come as soon as December. They have teamed up with Ormat to drill at a new Nevada site, and hope perhaps to do future drilling at the Blue Mountain site to increase the energy output there.

MacMurray D. Whale, an engineer and research analyst at Cormark Securities, wrote a report last week on Nevada Geothermal warning that “looming default overshadows financial results.”

“If there is not sufficient cash flow to service that debt, then the loan guarantee will be invoked,” Mr. Whale said.


So, what did the DoE give us for its support of a company it knew was in trounle before it agreed to $150 million in grants and guarantees?

27 megawatts of electricity (and dropping) and 22 jobs!

jw
edit on 2-10-2011 by jdub297 because: quote




posted on Oct, 3 2011 @ 06:51 AM
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I have to wonder if every clean energy company they're helping prop up with loans is being sabotaged to ensure that they fail financially.
That way they can say "See? there is no clean energy solution, OIL is the only sensible energy source".
We've seen how many nuclear power plant incidents in the last year? I can name 5 or 6. More than all the last decade put together.
Are the oil companies the ones making sure every alternative fails?
Just wondering out loud here.



posted on Oct, 3 2011 @ 10:03 AM
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Definately a good thought.The Nuke plants are nearng the end of their planned life times are they not\\\\\\\\\\/
some at least, are over due for replacement.Perhaps the accidents are mostly from running them for too long ?



posted on Oct, 3 2011 @ 04:49 PM
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Originally posted by Asktheanimals
I have to wonder if every clean energy company they're helping prop up with loans is being sabotaged to ensure that they fail financially.


Many of the projects funded have been "in the works" in one form or another for several years.
Some were proof-of-concept tests that were not really expected to produce returns, but were scaled-up when "free money" became available. Others were supposed to be self-sufficient, such as the energy-independent campus at LACCD, but were money pits instead.

Billions to Spend: Part 6
Grand dream loses sheen in glare of daylight
L.A. community colleges' green energy plan proves wildly impractical. The blunders cost taxpayers $10 million.

www.latimes.com...

I think the real problem is that the DoE is under tremendous pressure from Chu and Obama to fund these projects at any cost, forgetting that cap-and-trade and Copenhagen failed to make traditional sources so expensive as to make alternative projects comparatively competitive.
See Walter Mead's recent commentary for an excellent summary. Obama was commited even though he and Chu had failed to make electricity and gasoline go higher than they have otherwise.

Green Energy Industry Staggers
As the Energy Department hustled to get another $4.7 billion in loan guarantees for green tech companies out the door before time ran out and the program ended last week, yet another solar panel manufacturer was wilting in the sun, and the green jobs scam was looking more threadbare than ever.

blogs.the-american-interest.com...



That way they can say "See? there is no clean energy solution, OIL is the only sensible energy source".


The problem is that alternative energy IS prohibitively expensive compared to the huge domestic and Western gas and oil reserves that Obama is still trying to obstruct access to.
His energy agenda would have worked if Cap'n Trade and his first mate Copenhagen would've resulted in the "European gas prices" Chu hopes for and the "skyrocketing" energy prices Obama promised in his campaign.
They didn't, so it doesn't; yet they still funded the speculative projects hoping that the 1 in 100 success would "prove" they were "right." They didn't, and they aren't.


We've seen how many nuclear power plant incidents in the last year? I can name 5 or 6. More than all the last decade put together.


Maybe you didn't notice, but the US is the largest producer of commercial nuclear power; accounting for almost 20% of all electric power generation. All nukes were built or begun almost 40 years ago! "Incidents" occur in coal-fired plants (and their ash pits), gas-fired plants, and refineries every day. A broken water valve (I had one in my 40-year-old kitchen last week) can be an "incident" at any of these now-ancient plants.


Are the oil companies the ones making sure every alternative fails?


No, economic reality does that all by itself; especially when alt. energy advocates fudge the numbers in their own favor to help a little. Our best "green" projects are based on principles of conservation instead of substitution and replacement. Increased efficiency has tremendously increased productivity while reducing per-capita carbon. (The "market" actually works, if you let it).


Just wondering out loud here.


No, you weren't.
You were being provocative and unjustifiably accusatory.
A moderator surely should have been able to find the answers to all of these questions with a bit of effort.

deny ignorance.
jw
edit on 3-10-2011 by jdub297 because: quote



posted on Oct, 3 2011 @ 04:58 PM
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thinking about the current adminstration and their push for green technology

it reminds of of watching the news where in some third world country at war with each other and the dude shooting the gun never trained to ever fire one.

just sprays and prays and hope they hit something

that analogy works here the bullets is our money and they have their eyes closed sitting their thinking happy happy thoughts and hope they hit something and create wealth.

22 jobs is ridiculous the only thing sitting at capitol hill are a bunch of neanderthal hedonist self righteous baffoons.

spending our money how ever they see fit and the sad reality of this whole fiasco is they would never be that stupid with their own money just ours.

just speaking as one seriously irritated citizen tired of stupid washington aristocrats
edit on 3-10-2011 by neo96 because: (no reason given)



posted on Oct, 3 2011 @ 08:15 PM
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reply to post by neo96
 


This isn't just a dig at the Obama admin. The temptation to appeal to the "green" constituency cuts both ways.
Note also that this particular project received "bipartisan" support!

jw




 
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