Elizabeth Salaam 11 a.m., Sept. 17
Green Energy Company at Risk
In the wake of the failure of Solyndra, a manufacturer of solar panels who was the beneficiary of government-backed loans, more bad news arrives on the green energy front. Nevada Geothermal Power Inc. admits that there exists “significant doubt about the company’s ability to continue as a going concern.” These exact words are frequently uttered in the days leading up to a business venture’s demise.
The company, based out of Vancouver, British Columbia, Canada, has a significant presence in the western United States, including several recently purchased properties in the Imperial Valley near Brawley and Truckhaven.
Nevada was the recipient of $79 million in federally guaranteed loans, and at least another $66 million in grants through a federal green energy program originally implemented by George W. Bush and continued by the Obama administration. The Department of Energy program has faced mounting criticism from Republicans recently, especially in the wake of the failure of Solyndra, a solar cell panel manufacturer that received $535 million in loan guarantees.
Critics fault the program, which ended last week, for lack of oversight. President Obama has defended it, saying the loans and grants overall have been effective and are necessary to meet his goal of providing 80% of the country’s power from renewable sources by 2035. About $40 billion in loan guarantees and grants were issued throughout the program, with $16 billion awarded shortly before the program’s expiration.
The collapse of Nevada won’t be related to its new purchases in the Imperial Valley, as operations there have yet to begin. Instead, a plant in Nevada that was supposed to provide 45 megawatts of power, providing energy for about 45,000 homes, was only producing 27 when put into operation in 2009. That figure has since risen to 35 megawatts, but that production level is still too low to meet output levels promised to local utilities, or to service the debt the company incurred in building the plant.
Failing a restructuring of debt to Washington-based investors charging a 14% interest rate, the company could default as early as this December. If that happens, the federal loan guarantee would be invoked.