Geothermal energy’s reputation took a blow today after it was revealed two taxpayer-backed clean energy companies are facing serious financial difficulties.
USA Today reports on the plight of Raser Technologies and Nevada Geothermal Power (NGP), both of which specialize in capturing heat from the earth and converting it to electricity.
Both firms received a total of $195 million in partial federal loan guarantees and grants that were intended to promote clean energy. Yet financial records unearthed by USA Today reveal that neither company has ever pulled a profit.
Raser Technologies already filed for Chapter 11 bankruptcy this year, while NGP is facing a growing risk of closure. Both companies have agreements in place with utilities to buy the energy they produce, but Raser never produced more than 5 megawatts of power at its plant in Beaver County, Utah.
The case of Raser and NGP carries echoes of Solyndra, the now-bankrupt solar manufacturer that received a $535million federal loan in 2009 by the U.S. government.
The same program that doled out money to Solyndra granted a $98.5million loan guarantee to NGP. Two years ago, Republicans jumped at the chance to criticize the Obama administration over the Solyndra loan, and are unlikely to ignore the failure of Raser and NGP.
When questioned about the complete lack of profits for NGP, the company’s head of investor communications, Paul Mitchell, told USA Today:
“You have to drill. It’s not unexpected that you can get these lag periods where our productivity and our monetary targets lag behind as we develop the resource.”
A third company, U.S. Geothermal, is in similar dire straits, having received a $97 million Energy Department loan in February, yet not having generated a profit in the past four years.