Skyrocketing CostsIn researching Mighty River Power, I noticed it invested 100 million dollars in Energy Source's Hudson Ranch 49 MW geothermal plant being built in the Salton Sea. Construction began last May, will take 21 months, and will cost 400 million dollars! That's over 8 million dollars per MW. The project finance is being provided by a syndicate of 8 major banks and a equity investment by Mighty River.
Given how much this project costs I feel more forgiving of Ram's cost overruns at SJT 1 and 2. Even with the potential 50 million dollar cost overrun, the project still comes in under 5 million per MW. And SJT 1 will come online 18 months after construction began in December 2009. That's not terrible compared to the Hudson Ranch project. Everything in drilling/construction/EPC costs significantly more the last couple of year, and skilled labor is difficult to find and deploy quickly.