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Radius Gold Jumps into Geothermal

Ormat's Zunil Geothermal Facility in Guatemala

Radius Gold Inc. (TSX-V: RDU) announced that it has nearly 500,000 acres either under lease or application in Guatemala broken into 7 different tracts. Given that Radius has been in the exploration business for gold in the region for a decade and has run across several hydrothermal systems during that time, this is an interesting shift into an adjacency. In fact, one might call it smart taking the unnaturally high gold prices and using that leverage along with the experience they have in region to partner with an established producer to bring these projects to fruition.

Past studies have indicated that there is large geothermal potential in Guatemala, perhaps as much as 4GWe, but more likely around 1GWe. Presently, Ormat has two plants producing a net of around 46MWe in the region.

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Utilities, Co-ops, & Public Power Workshop

The Geothermal Energy Association will host this workshop in Las Vegas, July 22 2010. For more details:

On July 22, the Geothermal Energy Association (GEA) will explore the future of utility-scale geothermal power at an industry conference held in Las Vegas. With geothermal production expanding to 15 states, many new utilities, coops and public utility districts are considering geothermal for the first time. This session brings together utilities, coops, and PUDs familiar with geothermal to discuss how they have achieved success with geothermal developers and companies. Sessions will focus on approaches and challenges for utility-scale projects in the U.S., federal and state support for utilities and renewables, risk management, transmission issues, and more.

Read more…

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Geothermal Stocks on a Run

Geothermal stocks run up in June 2010

According to TickerSpy’s *GEOTH index, geothermal stocks have had a run up of nearly 20% since June 8, 2010. This move seems to be related to the US Government project loan guarantees and has breathed new life into developers.

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NRG bids for Calpine

Calpine Turbine at the Geysers
Calpine Turbine at the Geysers
Attribution: KQED

This morning there is news on the wire that New Jersey utility NRG has bid over $11B in an all stock deal to acquire Calpine. This is a 6% premium over the closing price of Calpine yesterday. With 26GW of generation capacity (a little less than 1GW geothermal, the rest natural gas) Calpine is a significant generator who only emerged from bankruptcy protection 4 months ago. Should the deal be consummated, the combined utility would have nearly 50GW of generation capacity in hydro, geothermal, petrochemical, coal, and nuclear powered generation.

The Calpine board is considering the offer at present. This is the latest in a wave of consolidate of the fossil fuel generators. Let’s hope the significant geothermal operation is not lost/damaged in the shuffle.

AP Story on Bid

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$98/MWh PPA

Western GeoPower scored a nice deal yesterday inking a 20 year PPA with the Northern California Power Association for around $26M/year and a purchase price of $98/MWh. We thought the $78/MWh + wheeling costs that was cut earlier this year between the City of Anaheim and Raser was lucrative. $98/MWh is great and reflects the new CPUC pricing model.

With the deal, WGP has a $500M+ revenue stream set against a ~$120M capital expenditure. With operating costs of $30/MWh, that leaves a whopping $68/MWh for debt service, other SG&A, taxes, and net income.

Western GeoPower
Raser Technologies
Northern California Power Association (NCPA)
California Public Utilities Commission (CPUC)

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