Geothermal Energy Gets Cash Infusion

Vulcan Power Company, a leader in geothermal energy project development in the western United States, announced this week that it received $108 million from a Boston-based private equity firm.  The new cash infusion is the second recent equity investment from the affiliate of Denham Capital in Vulcan, for a total of $166 million.  Bank of America Merrill Lynch has also made major Vulcan investments.

Vulcan is based in the high desert city of Bend, Oregon.  Because its located in my hometown and I’m interested in renewable energy resources, we’ve blogged several times about geothermal exploration – its promises and potential impacts.

Vulcan Power’s exploration and development is not the same project as the somewhat controversial Newberry National Volcanic Monument drilling by Davenport Power, but the geothermal extraction process is generally the same, which is:

“to artificially insert water deep underground, which can get heated by the natural, hot rock conditions.  In other words, instead of pumping out hot water from below surface reservoirs, the EGS [enhanced geothermal systems] procedure involves pumping water into man-made reservoirs.  Natural heat will warm it up and then it can be pumped to the surface again for geothermal energy.”

More than solar and more than wind, the promise of geothermal energy in this region of the United States holds great promise.  For its part, Vulcan Power has geothermal research and steam development locations in Oregon, Washington state, California, Arizona and Nevada.  At over 170,000 acres, it holds one of the largest geothermal property portfolios in the U.S.

No geothermal plants at Old Faithful Geyer (Yellowstone National Park), but what a show!

Vulcan intends to use the new investments to develop the more than 300 MW (megawatts) of electricity from a portion of its total acreage.  The funds will go to development of geothermal reservoirs, steam turbine power plants, and upgraded transmission facilities.

Once operational, the Vulcan facilities will provide “baseload renewable energy” for up to 300,000 households.  The generated power will be sold to utilities, which will pass on the renewable energy-based power to their customers.

The western United States is literally exploding with geothermal energy (you’ve heard of Old Faithful, haven’t you?)  With all this clean energy literally untapped under the ground, its exciting to learn about private equity investment to help us move forward into the future and away from our dirty fossil-fuel past.