Mighty River Power Achieves Key Milestone

MEDIA RELEASE
6 March 2012
Mighty River Power Achieves Key Milestone in International Geothermal Programme

Mighty River Power today announced the first full power to grid of the EnergySource-owned, 49.9MW Hudson Ranch Power I geothermal project on the Salton Sea reservoir in Southern California’s Imperial Valley.

Mighty River Power’s General Manager Development, Mark Trigg, said achieving grid synchronisation and running at full capacity just 21 months after construction commencement was a significant milestone for all parties involved.

Aerial photograph showing site works at Hudson Ranch Power I plant - January 2012

Hudson Ranch Power I is the first new geothermal plant constructed in the large Salton Sea geothermal field in over 20 years and the largest geothermal development in the US in recent years.

Following a further month of field tests, the project would be the first of Mighty River Power’s international geothermal developments to move into commercial operation. Hudson Ranch Power I will supply renewable energy under a long term contract to Salt River Project (SRP), an Arizona utility providing electricity to over 900,000 customers, and uses similar technology to Mighty River Power’s Kawerau and Nga Awa Purua geothermal stations in New Zealand.

Mighty River Power is one of the world’s 10 largest geothermal developers and operators and currently has development interests in geothermal reservoirs across the United States, Chile and Germany. The Company’s investment interest in the Hudson Ranch Power I project is through the GeoGlobal Partners I Fund (the GGE Fund), which has a minority stake in EnergySource. Through the GGE Fund, Mighty River Power invested US$92 million into the US$400 million project in May 2010, providing the largest equity interest in Hudson Ranch Power I, and facilitating commencement of construction.

Mr Trigg said the Company has taken a measured and prudent approach to international development opportunities and the initial stages of building a platform for international geothermal growth that leverages Mighty River Power’s experience and competencies in this global niche. This approach has focused on investing equity capital in early-stage geothermal exploration and development in Chile and Germany, complemented in the USA by the investment in EnergySource involving the well known, large-scale Salton Sea geothermal resource and the later stage investment in the Hudson Ranch Power I project just prior to commencement of its construction.

Testing of the geothermal wells supplying the Hudson Ranch I project has demonstrated capacity well in excess of requirements, providing EnergySource with confidence to confirm interest in further investment in the Salton Sea geothermal field. In late 2011, SRP announced a second Power Production Agreement to purchase all of the output of EnergySource’s next project, Hudson Ranch II, also a 49.9MW plant.

ENDS

Note to Editors:

Mighty River Power currently has a 29% stake in Maryland-based GeoGlobal Energy LLC (GGE), which acts as manager to the international geothermal investment fund, the GGE Fund. Mighty River Power is the cornerstone investor in the GGE Fund, through which offshore geothermal investments are currently developed.

In May 2010, the GGE Fund invested in Hudson Ranch Power I in an equity flip structure that gives GGE a preferred return until the flip point. In addition, GGE made a minority investment in EnergySource, a geothermal development company with access to the significant Salton Sea geothermal resources in Southern California’s Imperial Valley – one of the largest and hottest geothermal resources in the United States.

During construction, the Hudson Ranch Power I plant was awarded the Environmental Stewardship Award at the inaugural Geothermal Energy Association (GEA) National Geothermal Summit in 2011 and the 2010 Project Finance Magazine North American Geothermal Deal of the Year Award.

About Mighty River Power

Mighty River Power is a New Zealand electricity company, with a flexible portfolio of electricity generation assets, a strong national retail presence and a focus on domestic generation and international geothermal development opportunities, with geothermal interests in more than 10 reservoirs across the US, Chile and Germany.

More than 90% of our generation is from renewable sources. We supply both electricity and thermal energy to major commercial users and have about 20% of New Zealand’s retail market with our brands, Mercury Energy, Bosco Connect and Tiny Mighty Power.

Mighty River Power won the 2010 Deloitte Energy Excellence Awards for Overall Energy Company and Project of the Year (Nga Awa Purua). It was also a finalist for Overall Energy Company at the 2011 Awards. Retail brand, Mercury Energy, currently holds the 2011 Deloitte Energy Excellence Award for Retailer of the Year.

About GeoGlobal Energy LLC (GGE)

GGE is a privately-owned geothermal company focused on the worldwide acquisition, exploration, development and operation of geothermal resources to generate base load, renewable, low-carbon electricity to meet the growing need for global renewable electricity. GGE has established a broad portfolio of geothermal concessions and assets in various stages of development in the US, Chile and Germany.

© Scoop Media