US Geothermal is replacing its four Ormat 1.2MW units at San Emidio with an 8.6MW system from TAS

US Geothermal has hired TAS Energy, Inc., to build a new 8.6MW power plant at its San Emidio project in Nevada.

The geothermal power plant developer agreed an engineering, procurement and construction contract with Houston-based TAS.

It will provide a modular binary cycle power plant for Phase I of the geothermal project in northern Washoe County, about 100 miles north of Reno.

The deal will see the contractor providing a non-recourse project loan for the $30 million plant.

US Geothermal is aiming to apply for a loan guarantee from the US Department of Energy in the near future to assist with the project.

“This is a fully financed, turnkey engineering, procurement and construction arrangement,” explained Daniel Kunz, President and CEO of U.S. Geothermal Inc. “We are excited to get construction started this year, which will insure that our 35 net MW San Emidio development project qualifies for the special 30% Investment Tax Credit cash grant.”

Phase I

The new water-cooled 8.6MW binary cycle power plant will replace the existing San Emidio power plant, which has been producing about 3.6MW of power since 1987.

US Geothermal said as a result no well drilling will be required for Phase I of its project, which should see commercial operations restarting in the 4th quarter of 2011.

Ultimately, the $200 million San Emidio project will have a second phase that should add 26.4MW of net power output from 2013.

Phase II remains subject to satisfactory completion of new well drilling, a transmission upgrade and the required permits being approved.

Reservoir expansion efforts are already underway for Phase II, partly supported by a Department of Energy Innovative Exploration Grant, awarded in 2009.

US Geothermal said power from the existing Phase I power plant is currently being sold to Sierra Pacific, a utility subsidiary of power company NV Energy, under a deal running through 2017.

The firm is currently negotiating with a number of interested parties for a 35MW power purchase agreement for the completed San Emidio project.