Ormat Technologies has announced that a key milestone was reached in the 30MW expansion of the McGinness Hills geothermal plant complex located in Lander County, Nevada. NV Energy and Ormat signed an amendment to the existing McGinness Hills power purchase agreement (PPA) allowing Ormat to sell 63.7 MW (net average annual capacity) from the complex. Under the amendment, a new energy rate of $85.58/MWh with a 1 percent annual escalator will be set for the entire complex once Phase II enters commercial operation. The amendment is subject to approval by the Public Utilities Commission of Nevada.
“The favorable performance of the reservoir and the PPA amendment give Ormat the ability to further expand this geothermal site,” explained Yoram Bronicki, president and chief operating officer at Ormat.
“Phase I of our McGinness Hills geothermal power plant has been in commercial operation since June 2012 and the strength of the reservoir allowed the power plant to consistently produce more energy than what was contracted in the original PPA. We are eager to continue development at the site which we hope to complete in mid-2015, as wellas our work with NV Energy to deliver more clean, renewable power to Nevada,” concluded Bronicki.
The McGinness Hills power plant received favorable project financing terms from the Department of Energy’s loan guarantee program under section 1705. The proposed expansion was approved by the lenders, John Hancock Life Insurance Company and the U.S. Department of Energy, and is covered under the existing financing structure. The economics of the expanded power plant and the potential availability of government incentives for projects that start construction before the end of 2013 enabled Ormat to provide a reduced power price to electricity customers in Nevada.