Vulcan Power sells power to California utility

SMUD Vulcan geothermal PPA secures 21-year baseload renewable energy from a 60 MW Nevada plant near Fernley, delivering steam-turbine power with water re-injection, expanding from 500 to 1,000 GWh annually for Sacramento's utility.

A California electric utility has agreed to buy up to 132 megawatts of electricity from a Nevada geothermal plant under development by Bend-based Vulcan Power Co.

The Sacramento Municipal Utility District signed a 21-year contract with Patua Project LLC, a Vulcan subsidiary developing a geothermal energy site near Fernley, Nev., a region seeing a transmission expansion to join north and south grid sections, about 38 miles east of Reno.

Geothermal energy is produced when extreme underground temperatures heat water to produce steam, much like a conventional boiler used in coal generation systems, though without combustion.

It becomes renewable when production facilities, which run the steam through a turbine, re-inject the water back into the ground so it can reheat.

The Nevada project, the company’s first, will be developed in three phases. Drilling for the first phase began in February and construction of a 60-megawatt power plant is expected to begin next January.

The plant is expected to begin producing electricity as soon as the first quarter of 2012, similar to a Nevada plant brought online by April, continuing through 2033, Vulcan said in a news release.

It will initially provide 500 gigawatt hours per year, supplying geothermal electricity to the grid before eventually growing to 1,000 gigawatt hours per year.

In February, Vulcan announced that it had raised $108 million from an affiliate of Boston-based private equity firm Denham Capital.

The deal brought Vulcan’s total outside investment to more than $200 million in three years, including a previous $58 million from Denham and $35 million from Bank of America Merrill Lynch.

Earlier this month, the company said Craig Mataczynski had been appointed CEO. He spent the past five years as CEO of Broomfield, Colo.-based Renewable Energy Systems Americas, one of North America’s largest developers of wind energy projects.

“A critical factor for our business is ensuring that we have the customers for the power we expect to produce,” said Bob Warburton, acting CEO of Vulcan Power, in a news release. “This power purchase agreement with SMUD is our third with a major utility. We are pleased to support the Sacramento area and the state of California in its commitment to renewable energy sources such as Mojave solar power initiatives as well.”

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