As referenced earlier today, ArcLight Capital and Caithness Energy LLC have entered into a deal where ArcLight will take an interest in 824MW of power generation in geothermal, solar thermal, and wind projects.

Upon reviewing the remaining Caithness Energy LLC portfolio the company is left with one undisclosed hydro power project and the remainder of its portfolio is now fossil fuel based with the largest component being natural gas (one diesel and one coal project exist as well.)

With the transfer of the geothermal, solar thermal, and wind assets and their operation to ArcLight, Caithness has effectively exited the renewable energy business after 25 years. Once operating agreements with eneXco and Seapower West lapse in the wind projects, it is likely ArcLight will take over operation of those projects as well.

With renewable energy’s move toward the mainstream, it’s interesting that Caithness would take this opportunity to exit. Perhaps it is because of the current hot market the management team looked for a high dollar value exit, on asset value alone, this is a billion dollar deal. Does the Caithness management team believe that the sector valuation has peaked?

The flip side of that is ArcLight’s asset acquisition positions them to enter the renewable power business in a big way. The Caithness assets join CPV Wind Ventures in the portfolio. ArcLight has vast experience in the power industry and has extensive interest in coal and gas fired power plants, along with transmission and pipeline operations.

Comments are off for this post

COSO Geothermal Field


ArcLight Capital has invested an undisclosed amount in Caithness Energy, LLC in exchange for interest in 18 different renewable energy projects in the geothermal, wind, and solar thermal areas totally more than 800MW. In addition to securing an interest, ArcLight will assume operations and maintenance responsibilities for 10 of the 18 projects. Caithness benefits from this transaction by attracting capital to help complete their 350MW Long Island project. Subject to regulatory approval, the anticipated close of the deal should occur in the 3rd quarter of 2007.

The specific projects included in the deal are:

• Geothermal: Coso (240 MW), Dixie Valley (66 MW) and Beowawe (18 MW)
• Wind: Cameron Ridge (60 MW), Pacific Crest (47 MW), San Gorgonio (43 MW), Foote Creek II-IV (43 MW), Texas Big Spring (34 MW), Ridgetop (31 MW), Peetz (30 MW), Oak Creek (23 MW), 251 (18 MW), VG Repower (7 MW), and Chandler (2 MW)
• Solar: SEGS VIII (80 MW), SEGS IX (80 MW)

The full press release is available from the ArcLight Capital website.

1 comment

Glitnir Bank of Iceland has extended a $20M loan to Nevada Geothermal to help ease the cash crunch in the preconstruction phase of the Blue Mountain project. Upon entering the construction phase, the previously announced $100M loan from Morgan Stanley will be used to repay the bridge loan from Glitnir. The near-term financing should help the project move along into the construction phase.

Comments are off for this post

Glitnir Bank and Geysir Green Energy have jointly invested $18M through a combination shares and warrants. Western Geothermal has been working to raise funds to build its 25MW plant on the site of old PG&E Unit 15 at the Geysers and further develop its Canadian project at South Meager. The $90M price tag on the Geysers project means there is still a significant sum of money to be raised, likely through debt financing like Nevada Geopower arranged with Morgan Stanley.

Comments are off for this post

Morgan Stanley extended a $100M loan to Nevada Geothermal to construct the Faulkner I project at Blue Mountain, Nevada. This comes on the heels of a 20 year duration power purchase agreement that Nevada Geothermal entered into with Nevada Power. In addition to building the plant infrastructure and more drilling, a 20 mile transmission line will need to be completed to bring the power to the grid. Nevada Geothermal projects the plant to be online in 2009.

2 comments