News
Sep 11, 2009Financings Fuel Interest in Geothermal Power!!
From today’s Globe and Mail, Richard Blackwell describes the potential boost from investors in the North American geothermal sector due to recent financings and government incentives. Even though the technology has been around for decades, governments have been slow to realize this powerful renewable resource right beneath our feet. Investors have gained little interest in this resource before due to the small players involved and the long lead times to get projects fully implemented.
“It has been the Rodney Dangerfield of renewable energy, but things are changing,” analyst Greg Reid of Wellington West Capital Markets Inc. told a geothermal investing conference yesterday. “The very consistent level of power produced by geothermal plants over very long periods is now being recognized as highly valuable,” Mr. Reid said. “Even when the long lead times to get a plant up and running are factored in, geothermal operations generate power more cheaply over the long term than wind or solar power projects,” he added.
Investors may have their heads up now that two large companies have completed significant equity issues:
- Magma Energy Corp. raised more than $110-million in an IPO on the TSX - its stock has gone up 30% since the IPO
- Ram Power Inc. raised almost $180-million by selling 60-million subscription receipts, which will eventually be converted to shares on the TSX - Ram is in the process of amalgamating its own operations with those of two other public companies, Western GeoPower Corp. and Polaris Geothermal Inc.
Another great lead for geothermal power has been from the Obama administration distributing grants for geothermal production and tax credits for those facilities once implemented.
The U.S. geothermal business has also been boosted by individual state mandates that require a certain percentage of power to come from renewable sources. In Canada, however, a lack of incentives from federal or provincial governments, and a difficult permitting processes, have kept the geothermal sector from developing,
CanGEA has developed a code that will set standards and proper protocols for the way companies report the amount of energy they expect to glean from drill sites. Alison Thompson, CanGEA’s chair and newest member for Magma Energy Corp., says that this, “measure is one of the important steps CanGEA is taking to help de-risk the industry. Government funding for exploration wells is also something we’ve been asking for.” Lee Deibert, the Director at Large for CanGEA notes that, “the response from industry and the investment community to date, in regards to the development of the Code, has been extremely favourable.” We are excited to be a part of the blooming Canadian potential for geothermal power, and hope that this Code will spark some fires.
To read the article in full click here.
