Bringing the Neal Hot Springs Geothermal Power Plant to Life

Transcription

1 Bringing the Neal Hot Springs Geothermal Power Plant to Life Kevin Kitz U.S. Geothermal Inc. March 23, 2010 Topics o About U.S. Geothermal Inc. o Putting the Key Pieces in Place Exploration Strategy and Activities Transmission PPA USDOE 1703 Loan for Innovative Technology o TAS Geothermal Power Plant Technology and Construction Approach o Moving To Completion Development Schedule 1

2 Bringing the Neal Hot Spring Geothermal Project to Life ABOUT U.S. GEOTHERMAL INC. 3 US Geothermal Inc. -- Background o Publicly Traded: HTM NYSE Alternext GTH TSX Headquartered in Boise, Idaho o Cash Equity Invested: $73.4 Million Debt: None o Operating Geothermal Power Projects: Raft River (Idaho) San Emidio (Nevada) 2

3 U.S. Geothermal Inc. Project/Locations 5 Raft River: Pacific Northwest s First Geothermal Power Plant Online 10/07 3

4 Raft River Construction Summer 2007 San Emidio Geothermal Power Plant Acquired in May 2008 Four 1 MW Ormat Units Operating Since 1986 In 2012, a single 8 MW turbine will replace these small units with no flow rate change. 4

5 Bringing the Neal Hot Spring Geothermal Project to Life PUTTING THE PIECES TOGETHER 9 Project Summary Neal Hot Springs o 9.6 Square Miles Leased All On Private Land o Owner/Developer: US Geothermal Inc. Wholly-Owned Project Subsidiary: USG Oregon LLC o Planned About 20 MW of Base Load Power Binary geothermal power plant o Schedule Development Drilling Ongoing Final Completion 1 st Half

6 11 The First Step is Resource Control o Explored by Chevron in the 1970 s Too Cold for then-current Technology The potential was there (see picture) o Acquired by U.S. Geothermal in 2006 All private mineral rights within the resource area 6

7 Chevron Well from Late 1970s Red outline is steam plume from well blowout Exploration Process o Geophysics Surface Geology Gravity Resistivity Temperature Gradient Wells o Drill when confidence is very high $3 - $5M for first well is typical 14 7

8 Production Well #1 - May 2008 Drilled near original Chevron discovery well 8

9 Production Well #1 Flow Test - Prolific - Self-flowed, throttled, at 2,300 gpm w/ 3 psi drawdown Reservoir Simulation is MW for 20+ years Transmission Availability A Critical Early Element o Best Exploration Dollars Option 1: $50k of transmission study waiting on $5M drilling results Option 2: $5M waiting on $50k o Interconnection Agreement Signed Feb, miles from PP substation to interconnection point o Transmission Line Construction Initiated Right-of-Way Acquisition, Mapping and Engineering EPC Contractor: Idaho Power Company Transmission Line Located on Private Land 9

10 Transmission Line Signed a Model Geothermal Power Purchase Agreement (PPA) o 25 Year PPA is with Idaho Power Is a very good model for use by any Utility and Developer Approval by the IPUC is pending o Recognizes Uncertainty in Geothermal Development Installation size of MW without renegotiation Annual output guarantee Based on yearly Independent Engineer report o Information is Primary Risk Management Tool Monthly reports starting at resource confirmation through start of ops Daily week-ahead generation forecast o Bundled Environmental Attributes Delivery at meter 10

11 DOE 1703 Innovative Technology Loan o Timeline Application: 2/09 Notice of Acceptance: 6/09 Loan Due Diligence: In-process o Criteria New or Significantly Improved 3 or fewer US installations, operating for <5 years o General Terms of DOE 1703 Loan Program up to 80% Rate: Treasury Disbursement, plus 37 basis points 21 Bringing the Neal Hot Spring Geothermal Project to Life A LOW TEMPERATURE SUPERCRITICAL GEOTHERMAL POWER PLANT 22 11

12 Power Plant Supplied By Turbine Air Systems (TAS) o Binary Cycle Supercritical Power Plant Employs R-134a Working Fluid High Efficiency Proven Equipment No Cutting Edge Technology o Pre-Fabricated Construction TAS Specializes in Modularization of Process/Power Equipment o Three 7.5MW Units Price, Schedule, and Performance Guarantees Qualified for a DOE 1703 Loan for Innovative Technology Project Description: Power Plant Innovative Use of Proven Technology One Radial Inflow Turbine Air-Cooled Condenser (~ 39 bays with 3 fans) Two SupercriticalEvaporators Two Cycle Pumps R-134a Supercritical Organic Rankine Cycle Description A B R-134a Pumped to Supercritical Pressure by Conventional Pumps B C Liquid Heated to Supercritical Vapor in Conventional Heat Exchanger C D Vapor Expanded in Conventional Radial Inflow Turbine D A Vapor Condensed in Commercially Available R-134a Condenser 24 12

13 Heat Exchanger Pump Turbine Condenser Comparison of Supercritical and Subcritical Cycles 25 Power Plant Design No Technology Risk -- Significant Advantages o Efficiency of Supercritical Design Supercritical Cycle More Efficient Than Boiling Vapor Optimal Temperature Approach with Single Turbine 10% to 15% More Efficient than Air-Cooled Iso-Pentane 7% More Efficient than Complex Ammonia-Water Cycles o Environmental and Safety Benefits of R-134a Non-Flammable: Eliminates Fire System Capital Reduces Risk of Loss of Use Reduces Insurance Cost Non-Hazardous: Eliminates Risk to Personnel and Community New Application Proven Technology 13

14 R-134a does not have the risk of fire that occurs with isopentane 27 Project Description: Power Plant Advantages of Modularization & Prefab o Advantages of TAS Approach Shop Assembly in Controlled Environment Improves Quality Less Field Construction Lowers Capital Cost Field Installation of Modules Shortens Schedule Multiple Units increases availability 14

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17 Construction Approach o TAS: Power Plant Fixed-Priced Contract Very similar to a full wrap EPC o Transmission Line: EPC with Idaho Power o EPC for site assembly of TAS skids and construction of cross-country geothermal pipelines Industrial Builders of Caldwell, ID o US Geothermal Directly Manages: Overall Project Well Drilling & Testing Approach Proven Successful at Raft River 17

18 Project Development Schedule o March 2010 Raised equity for Resource Confirmation o April to Fall 2010 Idaho PUC approval of PPA Drill 4-5 Production Wells and 1 Injection Well Finalize Power Plant optimization work o Fall 2010 Independent Engineer Report confirming 100% of Reservoir Capacity Sign EPC Fixed Price Plant and BOP Contracts DOE Loan Closing Issue Notice to Proceed to All Contractors o Power Delivery Skids Delivered to Site: 15 months after NTP 1st Unit in Operation: 17 months after NTP Final Completion: 19 months after NTP (Spring 2012) Bringing NHS to Life o Neal Hot Springs Reservoir All Production Drilling and Reservoir Risk Eliminated with Equity o Geothermal PPA with Idaho Power Meets needs of Utility, and realities of geo power development o Financing with DOE Innovative Technology Loan One of first through the process that started in Feb 2009 o TAS Supercritical Modular Power Plant Efficiency, Schedule, Capital, and O&M Benefits w/o New Technology Risk o US Geothermal Inc. Same team that built Raft River, and Operates RR and San Emidio, NV 36 18

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