• 1 day PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 1 day Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 2 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 2 days Schlumberger Warns Of Moderating Investment In North America
  • 2 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 2 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 2 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 2 days New Video Game Targets Oil Infrastructure
  • 2 days Shell Restarts Bonny Light Exports
  • 2 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 2 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 2 days British Utility Companies Brace For Major Reforms
  • 3 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 3 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 3 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 3 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 3 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 3 days Rosneft Signs $400M Deal With Kurdistan
  • 3 days Kinder Morgan Warns About Trans Mountain Delays
  • 3 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 3 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 4 days Russia, Saudis Team Up To Boost Fracking Tech
  • 4 days Conflicting News Spurs Doubt On Aramco IPO
  • 4 days Exxon Starts Production At New Refinery In Texas
  • 4 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 5 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 5 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 5 days China To Take 5% Of Rosneft’s Output In New Deal
  • 5 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 5 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 5 days VW Fails To Secure Critical Commodity For EVs
  • 5 days Enbridge Pipeline Expansion Finally Approved
  • 5 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 5 days OPEC Oil Deal Compliance Falls To 86%
  • 6 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 6 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 6 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 6 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 6 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 6 days Aramco Says No Plans To Shelve IPO

Is Japan Next for Geothermal?

Is Japan Next for Geothermal?

Geothermal giant Ormat announced this week it's going to Japan.

Ormat signed a cooperation agreement with Japanese construction conglomerate JFE Engineering. The deal calls for the two companies to work together in building geothermal power plants in Japan. Ormat supplies the equipment, and JFE does the work.

This is a telling move from one of the world's largest geothermal players.

There are a number of reasons Japan could be big for geothermal. The nation is a volcanic island. Like Hawaii, the Philippines, Kenya and New Zealand (all of which have significant geothermal development), it's relatively easy to locate geothermal systems capable of driving a power plant.

But there's an even bigger reason geothermal could take off in Japan. Cheap money.
Last week, the Bank of Japan announced $30 billion in domestic stimulus spending. Apparently the Japanese economy is not turning around as quickly as the government would like. So it's time to add a little fuel to the fire.

The $30 billion will be doled out as low-cost loans to a number of strategic sectors. One of those is energy.

This means Japanese geothermal projects would likely qualify for a low-interest chunk of government cash. And nobody does low interest like the Japanese. Where Department of Energy geothermal loans in the U.S. are charging somewhere around 5.5%, Japanese loans (indexed to the government bond market) would likely come with interest rates less than 0.5%.

This is a big shot in the arm for Japanese geothermal, particularly for small companies. The hardest part of developing a geothermal project is financing the construction of the plant. In the U.S., junior companies with few assets to finance against have in the past been pushed into ultra-high-interest bridge loans. Making project economics a lot tighter.

The provision of low-cost loans from the DoE has made things much brighter for U.S. geothermal developers. And the new Japanese stimulus package could do same for Japanese start-ups.

I'm going to be looking into this. Japan is an oddly difficult place to work, more akin to Italy than the U.S. in terms of corruption and cronyism. But with the right people, a Rising Sun geothermal project could be a huge moneymaker now that government money is on the table.

By. Dave Forest of Notela Resources




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News