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Continental Ridge Resources Inc - News Release
Continental Ridge bids to sell power to Nevada utility
Continental Ridge Resources Inc KRI
Shares issued 6,515,002 Dec 11 2001 close $.250
Tuesday Dec 11 2001 News Release
Mr. Brian Fairban reports
Continental Ridge Resources has tendered a bid to sell geothermal power from its Blue Mountain project to a large Nevada utility. The utility company made a request for proposals by tender on or before Nov. 30 for future delivery contracts of electrical power generated from renewable sources so they can meet the new state requirements.
The Nevada state government recently passed legislation obligating every utility to derive a certain amount of the electricity they sell from renewable energy resources such as solar, wind and geothermal. A minimum of per cent of electrical power sales must be from renewable energy sources by 2003, rising 2 per cent every two years to 15 per cent by 2013. Proposals for the delivery of renewable energy were requested by the utility on the basis of 10-year contracts, starting in 2004, at a firm price of eight U.S. cents per megawatt hour (MWh) for the first five years. The utility will initially require 504,000 MWh in 2004 rising to 1,162,000 MWh (the output of a 147-MW power plant) by 2006.
The Blue Mountain geothermal project of Continental Ridge has the potential to support an electric power plant development of up to 100 MW, capable of producing up to 832,000 MWh per year, enough to supply part of the utility's needs. It would be the equivalent of a fossil fuel power plant burning one million barrels of oil in order to power 100,000 households each year. A 100-MW plant would generate $70-million in annual revenues based on the contract price.
There is no certainty that Continental Ridge will be contracted to sell geothermal power to this particular utility but its request for proposals is tangible evidence of the mounting demand for renewable energy in the Western USA. The company aims to complete a feasibility study in 2002 so that the first 30-MW module could be built in 2003 and additional modules thereafter. Geothermal projects are normally built out in modules in order to minimize capital costs and maximize cash flows.
Geothermal energy (literally heat from the earth) is a "green" alternative energy source. It is natural, clean, renewable, reliable, efficient and inexpensive to operate. The Western USA has a generous endowment of geothermal energy, especially in Nevada where 10 per cent of the current power generating capacity is from geothermal power plants. Geothermal heat can be harnessed for clean electrical power generation wherever high heat flow is found in deep, fractured rock formations below a shallower, non-fractured or sealed caprock. Groundwater in the deep fractures becomes heated and rises, creating a convection cell under the cap rock. Production wells are normally drilled one to two kilometres deep to bring the hot water (at least 150 C) up to surface where it flashes to steam. The steam is then used to drive turbines for generating electricity and the residual water is pumped back down injection wells to recharge the reservoir.
Continental Ridge holds an option to earn a 60-per-cent interest in the large Blue Mountain geothermal power project, Humboldt county, northern Nevada. The property covers 18 square kilometres and is well located within 24 kilomtres of the state electrical transmission grid. Over $2-million of exploration and development work has been conducted on the property, including geological studies, geophysical surveys and 86 drill holes.
The Blue Mountain geothermal field is exceptional in that it could have very high water temperatures (200+ C) that can be developed at unusually shallow depths (500+ metres). Drilling has outlined a five-square-kilometre zone of very high heat flow with subsurface rock temperatures increasing 40 C every 100 metres in depth.
The U.S. Department of Energy recently provided the company with funding to facilitate the next phase of development at Blue Mountain. The company's business plan calls for the drilling of the phase 1 deep test wells in early 2002, followed by a phase 2 drilling program and feasibility study. Subject to a positive study, Blue Mountain would then be ready for commercial development to meet the needs of Nevada utilities.
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