The Five Geothermal Companies to Watch

Geothermal energy, which uses the planet's sub-surface heat to generate electricity, is a valued resource because it doesn't emit greenhouse gases and can provide baseload power, in contrast to more unreliable sources like wind. For many years, the only problem has been that geothermal power is not readily accessible.

But today, quite a few companies are searching for new ways to get at the deeply buried resource. And this Wednesday, word broke that geothermal energy will receive $350 million in funding from the Obama administration. Interest in the industry is growing, although it's still unclear where the Federal money will land.

Here's a short list of some top geothermal players, mostly public companies, who might be among the first to benefit:

1. Ormat Technologies -- One of the top companies in the geothermal industry, Ormat is aggressive about its expansion, splitting its time between working on its own sites, selling equipment to smaller operators like Nevada Geothermal, and entering partnerships with startups like Australia-based Geodynamics, which is working on cutting-edge hot fractured rock (HFR) technology. The company is one of the few that has managed to secure project financing during the downturn. If geothermal takes off, Ormat will almost certainly be taken along for the ride.
2. Calpine -- Since emerging from bankruptcy early last year, Calpine has been on a tear, turning down an acquisition offer from NRG Energy, breaking its losing streak when it posted a profit earlier this month and taking on a $1 billion loan just a week ago. The operator of one of California's oldest geothermal plants, Calpine is also well-situated because of its ownership of natural gas plants, which will likely become more important in coming years as environmentalists fight to phase out coal power. Its new cash holdings could also be used to gobble up smaller geothermal companies.
3. US Geothermal -- Last year, US Geothermal had the simultaneous good and bad luck to attract the attention of Goldman Sachs. Good because it secured them an investment at the time; bad because Goldman soon thereafter found itself far too occupied by its bad derivative trades to worry about a tiny geothermal startup. Now the company may be on the cusp of receiving an $85 million Department of Energy loan for a 22 megawatt power plant in Oregon, which would likely give it the needed credibility to pick up more private investment.
4. Raser Technologies -- Potentially heavily dependent on government help, Raser has its fingers on geothermal sites in western states like Oregon and Utah, where it just completed a mad dash to build a 10 megawatt plant, and the country of Indonesia. On its own, Raser is racking up quarterly losses. Like most development companies, it needs heavy financing to get its sites up and running. The company also has a side-business making components for electric and hybrid vehicles, which could be a distraction from the core geothermal technology.
5. AltaRock Energy -- The only company in this list that's privately held, AltaRock nevertheless bears watching. The recipient of money from Google.org among other investors, AltaRock has attracted plenty of attention for its Enhanced Geothermal System (EGS), a plan to drill miles into the Earth's crust to reach superheated rocks. Once this is done, cold water can be pumped down, to return as steam that drives generators. Geodynamics is working on the same plan, but recently suffered an unexpected a well blow-out that could put AltaRock ahead. If the plan works at all, larger companies licensing the technology will be able to tap gigawatts of previously unreachable energy.

For the interested, there are quite a few more small companies that might also be worth a look. Nevada Geothermal, Polaris Geothermal and Western GeoPower are all small publicly-traded North American companies with potential power plays around the globe. GeothermEx, Potter Drilling and Thermasource are privately-held companies with technology for deep drilling and power plant construction, which will be necessary to advance the sector. And there are also some big players -- notably Chevron and, through its recent acquisition of Pinnacle Technologies, engineering giant Halliburton.