LOS ANGELES - A unit of GreenHunter Energy Inc said on Thursday it signed a 20-year power sales deal for its biomass power plant in California, enabling the company to complete construction.
The agreement between GreenHunter Mesquite Lake, LLC and the Imperial Irrigation District covers up to 27 megawatts of net electricity over 20 years for an undisclosed fixed price that rises annually. The company also agreed with the district for the delivery of the electricity through the existing transmission system on an as available basis.
GreenHunter Energy Chief Executive Gary Evans said in a statement the alternative energy sector has few appealing commercial opportunities due to depressed fossil fuel prices.
The biomass business is the one outstanding sector that offers immediate profitability depending upon the location of the facility, Evans said, adding the deal will allow the company to finish construction of the El Centro, California plant and have a viable operating asset in its portfolio.
Alternative energy developers typically sell the output of their planned projects forward to secure financing to build projects. (Reporting by Laura Isensee; editing by Andre Grenon)