The principal energy investment arm of Merrill Lynch has decided to invest $35 million USD into Vulcan Power Company. Vulcan Power which is privately held , has over 20 years and 700 MW of experience to their name
.The company which has operations in the western United States including California , Nevada, Oregon, and Arizona is well placed to take advantage of recent developments in the market. Vulcan is currently looking to collect $150 million USD worth of investment from private sources to develop 900 to 2000 MW of power from geothermal sources. According to the company this would be enough to meet the power needs of 2 million people. Considering the rising costs of gas and oil, as well as the externality costs of coal , the relatively high price in starting the capital intensive drilling and setting up of geothermal operations is becoming more attractive. Add to that the fact that many states are offering incentives in the US and mandating renewable energy as part of their power mix, and out comes a kick start for an industry which was once considered near death. Vulcan in many cases has bought leases on sites where work has already been done and large investments made, but the major energy companies have left. Now that geothermal is back on the rebound they are starting to reap the rewards of their investments.
Vulcan’s CEO and chairman was quoted as saying “Many of our properties in advanced stages of development have been the subject of more than $50 million in development expenditures before Vulcan acquired them.” Vulcan expects that overall it will eventually raise near $800 million USD to finance it’s operations.
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