Work starts in June on a geothermal plant that the state Department of Energy says will be the first in Oregon to produce energy on an industrial scale.
The developer, U.S. Geothermal Inc. of Boise, Idaho, plans to use heat from a 300-degree reservoir 2,500 feet underground to generate power, The Bulletin of Bend reported.
The cost of the plant near Vale, west of Ontario in Malheur County, is estimated at $130 million.
Idaho Power Co. will buy the electricity. A spokesman said the 23-megawatt plant it will supply enough power for about 700 typical homes in the utility’s service area.
U.S. Geothermal has been drilling wells, erecting accessory buildings and preparing the site for the power plant modules that will be bolted together as they arrive at the site at Neal Hot Springs. Idaho Power has built a substation and strung transmission lines.
A Nevada company is building a second generating plant in the Southern Oregon town Adel, state officials say, and that’s expected to go online in 2013.
The use of geothermal heat isn’t new in Oregon, but such large-scale projects are. Homes, businesses and other buildings in Klamath Falls have long used geothermal heating systems. And guest rooms at Seventh Mountain Resort southwest of Bend use geothermal technology for heating and cooling.
Davenport Power of Connecticut began drilling exploratory wells for a more complex geothermal power project near Newberry National Volcanic Monument in 2008.
The partners in that project have gotten federal stimulus grants of about $30 million. Along with high gasoline prices and requirements for utilities to buy renewable energy, “that triggered basically a boom in permitting for geothermal,” said Bob Houston, an energy resource geologist at the Oregon Department of Geology and Mineral Industries.
U.S. Geothermal operates plants in Raft River, Idaho, and San Emidio, Nev. It wants to build another in Guatemala, and it said in a quarterly report filed in December with the U.S. Securities and Exchange Commission that it wants to build a second plant near Neal Hot Springs, with a 28-megawatt capacity, slightly larger than the first.
The company has been in the red but expects about $18 million in revenue this year from Idaho Power to turn that around.
“When … Neal Hot Springs comes online, we will become a cash-flow-positive company,” said Doug Glaspey, president of U.S. Geothermal.