Ram Power has announced the cancelation of a crucial long-term power purchase agreement with Southern California Edison (SCE) for the sale of power from its Orita project in Southern California’s Imperial Valley.
It seems Ram was forced to cancel the contract because it was unable to secure development capital. In a statement Ram said its inability “to meet the critical milestone schedule outlined in the PPA” forced it to terminate the contract with SCE.
Fully developed Orita would have supplied SCE up to 300 megawatts of geothermal power generated across three projects.
The termination of the PPA comes just a few weeks after Ram closed a $160 million debt financing supporting the expansion of the fully-contracted San Jacinto-Tizate project in Nicaragua.
Geothermal companies have had a hard time securing financing to develop what, on paper, are promising projects. To blame are the relative small size of geothermal developers and the long development time necessary to get a project commercial-ready.
These realities forced Raser Technologies last spring to filed for bankruptcy. Developer Magma Power has opted to diversify its portfolio by acquiring Plutonic Power, a developer of small hydro and wind projects.