Report says Canada Has Potential for Geothermal Energy

An investment company in British Columbia says Canada could develop its first geothermal site with a capacity of 100 MW of generation.

VANCOUVER, BC, CA, 2001-05-04 <> The reservoir of the South Meager geothermal project on the west coast has an average temperature of 220 to 240 C, and the potential for heat energy from the field is estimated to be equivalent to at least 110 MW of electrical power capacity for 30 years, according to a consultants report released by Crew. The report says the capacity is “most likely” 192 MW. “With the ongoing significant changes in the electricity market in the Pacific Northwest and energy crisis in California, the opportunity to develop South Meager is very timely,” says Crew chairman John Darch. The site would become Canada’s first commercial geothermal production. The analysis was completed by GeothermEx Inc. of California, which said that two conditions are required for the site to be developed: commercial well productivity must be demonstrated by drilling and testing one or more confirmation wells, and an adequate number of drilling sites can be identified in the rugged terrain of the field. The consultant has recommended a confirmation drilling program of a shallow well (less than 1,000 m) and a deep well (more than 2,000 m) at a cost of US$4 million. The objective is to develop two 55 MW plants, which would be commissioned in 2004 and 2006. Total development costs would be $300 million, and are based on a power price of $69 per Mwh. That level is the average ten-year price anticipated by the California Department of Water Resources. The South Meager is considered to be “as attractive as any other geothermal resource presently available in North America,” says Darch. The provincial utility in British Columbia, B.C. Hydro, reportedly earned $1 billion in electricity sales to California last year, but is expected to experience generation difficulties this year due to abnormally low snowpack levels. Last year, it released a plan to increase generation capacity, of which 10 percent would come from renewables. Geothermal energy is not part of Crew’s core business, but the Vancouver firm wants to take advantage of current opportunities from the power crisis in North America. It will obtain an independent public listing, raise funds and seek a partner to develop the project. It has also agreed to transfer its interest in South Meager to South Crofty Holdings Ltd. for a price of C$11.6 million, which is the cost incurred on the property between 1995 and 1996. Crew is an international mining company, with mines in Africa, Canada, Greenland, Norway and the Philippines. Between 1973 and 1984, B.C. Hydro and the federal government spent $30 million on a geothermal exploration program throughout British Columbia. The Meager Mountain area was defined as the prime geothermal prospect, but a 20 kW demonstration plant was terminated when energy prices dropped.

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