Scandinavian financial services and investment giant Glitnir opened its New York office today, which will be headquarters to its U.S. subsidiary Glitnir Capital Corp.
Why the heck is this significant or worthy of a post? Part of the reason Glitnir is setting up shop in the United States is because of what it considers “America’s huge geothermal energy potential.” And it’s all baseload, baby.
The way this Icelandic investor sees it, the U.S. has the potential for a six-fold increase in its installed geothermal capacity, which would double existing global capacity. “Glitnir estimates that investments of $9.5 billion (U.S.) are required in projects currently under development, and that further $29.9 billion are needed between now and 2025 to develop and harness future resources,” according to a company release. Obviously, Glitnir wants to apply its experiences from Norway and Iceland (an established geothermal superpower, you could say) and neighbouring countries to opportunities in the United States, and is prepared to inject a large part of the necessary capital. “Some smaller companies are lacking financial muscle to fully develop projects with potential to be profitable. Therefore, Glitnir expects considerable consolidation in the industry over the next few years.”
According to a report from Dow Jones: “The firm is readying a formal announcement of a financing deal of more than $10 million behind Iceland America Energy Inc., a geothermal specialist with a deal to provide energy to PG&E through the Truckhaven project in California… Other recent deals include a $19 million financing of Western GeoPower Corp. (of Vancouver), a $23 million financing round for ThermaSource in Santa Rosa, Calif., and a $20 million debt round to help Nevada Geothermal Power Inc. conduct drilling operations.”
Reuters reports that Glitnir plans to spend $1 billion on U.S. geothermal energy projects over the next five years, what it considers to be about 10 per cent of a market that it brands the “sleeping beauty of sustainable energy.”
In a different press release, the company seems to expand its interest to the larger North American market — i.e. Canada as well. “We see a considerable geothermal energy potential in 82 countries worldwide — including the USA and Canada,” said Arni Magnusson, managing director of Glitnir Global Sustainable Energy. I’ve since e-mailed the company to get clarification on its position regarding Canada. Perhaps it has its eye on oil sands opportunities. Perhaps more… will be interesting to get some insight on this. I’ll keep you all posted.
The bottom line is that it’s exciting to see some major money flowing to this area, backed by experience and know-how (keep in mind we’re also seeing folks like Khosla investing in this area). Geothermal promises to be an important slice — along with solar PV, solar thermal, wave energy, wind and hydroelectric — of the overall clean energy needs of the continent.