Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


MRP takes on US geothermal project

MRP takes on US geothermal project, ups global fund to US$250m

By Pattrick Smellie

May 18 (BusinessWire) - MightyRiverPower is to sink up to US$107 million into a 49.9 megawatt geothermal power station in southern California, in a project led by GeoGlobal Energy, the US-based geothermal developer in which MRP has a 25% holding.

The Hudson Ranch Power 1 plant will use the same technology as the state-owned electricity generator and retailer has installed successfully at its Kawerau and brand-new Nga Awa Purua plant.

MRP has simultaneously announced it is increasing its commitment to the GGE capital fund, in which it is the sole capital investor, from US$100m to US$250m. That will allow the company to continue pursuing similar geothermal opportunities in Chile with US-based GGE.

The announcement is the second major offshore investment in a fortnight by an electricity State-Owned Enterprise. Meridian Energy announced last week it was paying A$191 million for the 70MW Mt Millar windfarm in South Australia.

MRP chief executive Doug Heffernan told BusinessWire the investment was one of the largest renewable developments occurring in the US in 2010, and that MRP's experience with high temperature geothermal resources and infrastructure was a key to winning involvement in the Hudson Ranch project, which will be sited in the Salton Sea desert area of Imperial Valley, southern California.

Production wells have already been drilled and the resource proven by the developer, EnergySource LLC, the project is fully financed with an eight bank consortium, and output from the plant is fully contracted.

"Part of the reason GGE was selected was that this is a very high temperature resource, and very similar to New Zealand," said Heffernan. "The EnergySource partners liked GGE's geothermal experience and the MRP funding made a compelling case.

"MRP is one of the world's 10 largest geothermal operators and has relatively rare and highly sought after competencies in a nice sector of the global power industry."

Asked whether rating agency concerns about the impact of offshore development exposures to SOE balance sheets could lead to a re-evaluation of MRP's credit rating, Heffernan said the main concerns related to the unknown costs associated with domestic electricity sector reform.

"We are confident that MRP has the capability to fund through GGE into the investment without causing undue strain on our financial ratios."

That included factoring in the construction for a winter 2013 start of the 110MW Nga Tamariki geothermal plant, in the central North Island, resource consents for which were granted last week.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Air New Zealand: Employees Recognised With $1,000 Share Award

The efforts Air New Zealand employees made during one of the airline’s toughest years will be recognised via an award of $1,000 worth of company shares to all permanent employees... More>>

Consumer NZ: Bank Complaints On The Rise, Survey Shows

Nearly one in five Kiwis had a problem with their bank in the past year, Consumer NZ’s latest satisfaction survey finds. Consumer NZ chief executive Jon Duffy said the number of bank customers reporting problems had jumped to 18%, up from 11% in 2020... More>>

Federated Farmers: Applauds UK-Australia Free Trade Deal

News that Australia and the UK have signed a free trade agreement is a promising step forward in the fight against tariffs and protectionism, Federated Farmers says.
"It reinforces the international rules-based trading framework and is important for rural producers and global consumers," Feds President Andrew Hoggard says... More>>

ASB: New Zealanders Missing Out On Hundreds Of Millions In KiwiSaver Government Contributions

New Zealanders have just over a week to ensure they’re eligible for the maximum annual government KiwiSaver contribution... More>>

Stats NZ: GDP Climbs 1.6 Percent In March 2021 Quarter Following December Dip

Gross domestic product (GDP) rose by 1.6 percent in the March 2021 quarter, following a 1.0 percent fall in the December 2020 quarter, Stats NZ said today. "After an easing of economic activity in the December quarter, we’ve seen broad-based growth in the first quarter of 2021... More>>

Reserve Bank: Debt Serviceability Restrictions Added To Policy Toolkit

The Reserve Bank – Te Pūtea Matua and the Minister of Finance have agreed to update their shared Memorandum of Understanding (MoU) on macro-prudential policy and add debt serviceability restrictions to the list of potential tools available... More>>