Tax incentive granted to new geothermal project
More of Nevada’s extensive geothermal energy is being tapped after the Governor’s Office of Energy (GOE) granted a tax incentive for the construction of a geothermal power plant in Churchill County.
Ormat Technologies, Inc. received the incentive for its Tungsten Mountain geothermal power plant after meeting state and local statutes requiring that the project provide employment for Nevadans, a living wage with comprehensive health benefits, and a major capital investment in the State.
Once completed, the Tungsten Mountain power plant will have a production capacity of 24 megawatts. It will pull heat from five production wells spread across 1,355 acres in Churchill County. The generated power will enter Nevada’s grid through a 16.5 mile, 230 kilovolt transmission line and, utilizing transmission service provided by the ON-Line, supply renewable energy to a California utility.
“It is exciting to see more of Nevada’s abundant geothermal resources being developed and utilizing the expanded transmission infrastructure that has enabled more exportation options to the California market,” said Angie Dykema, GOE Director. “This project is another example of Nevada’s commitment to become a major renewable energy producer and exporter in the West.”
Geothermal power provides valuable ancillary benefits that promote grid reliability such as baseload capacity, voltage regulation, flexibility reserves and inertia, allowing for further integration of intermittent renewable resources and requiring less backup fossil fuel generation .
The tax incentive granted to Ormat is $11.8 million over 20 years. The total amount Nevada expects to receive from this project is $113 million, which includes employee wages, property and school support taxes, and a capital investment worth $94 million dollars. This represents more than a 10-to-1 return on Nevada’s investment, far exceeding the loss of revenue from the tax incentive.
“The Tungsten tax incentive is another great example of how government and industry are working to bring sustainable jobs and business to Nevada,” said Isaac Angel, CEO at Ormat. “Incentives such as these are critical in allowing Nevada to take advantage of its vast renewable resources in today’s highly competitive renewable energy market while bringing quality jobs and economic development to rural areas of our home state. To date Ormat has commissioned over 150 MWs under this tax incentive program creating significant economic development in Nevada creating a win-win for industry and the State and we look forward to continuing to develop these clean, reliable and flexible resources for the benefit of Nevadans and the region in general.”
The Tungsten geothermal power plant is expected to create 69 full-time construction jobs with an average hourly wage of $41.05 and five full-time operational jobs with an average hourly wage for Nevadans of $30.
The GOE decision to approve Ormat’s tax incentive request highlights GOE’s ability to facilitate cooperation among stakeholders, lead initiatives to stimulate economic developmen and attract energy related business ventures that include site development, generation and production, and inter/intrastate transmission.