Research paper about “Nevada Geothermal Power”
Nevada Geothermal Power Research Paper
Nevada Geothermal Power Research Paper
How has financial problems affected the operations of Nevada Geothermal Power?
What factors have contributed to poor power output in Nevada Geothermal Power?
Which critical variables is Nevada Geothermal Power facing?
What ethical considerations has Nevada Geothermal put in place?
What are the significance, scope, magnitude and feasibility of finding a solution for the problems facing Nevada geothermal Power?
The hypothesis is to find out the reasons for financial problems in Nevada Geothermal. The company has received federal loans to support its operations in this crisis. In 2011, they received sixty six million dollars from the government and a further seventy nine million dollars as federal loans to support their operations. The company has not managed to make profit even after government support and it is still fighting to remain afloat. There is a chance that the company operations may stall according to financial statements released by the companys auditor. The available money is not sufficient to boost production of power and this has affected the company finances. It has been difficult for the company to raise funds to support operations (Agency Group, 0, n.d).
Nevada Geothermal power faces a decrease in production of electricity. The company has the potential to produce 45 megawatts of electricity but with the recent problems, only 27 megawatts are produced. If the production process is low, then the supply is poor, which can cause losses for the company. The company resulted in drilling of new wells in other locations and the production shot to 35 megawatts. This is still very low compared to their potential for their supply is not sufficient for all clients. The production process is very low and this causes potential harm for the company supplies and general operations causing financial strain (Agency Group, 0, n.d).
Nevada Geothermal power faced financial problems in May 2012 that resulted in 3.8 million dollars net losses. This was largely caused by a failure of a pump that ensures smooth operations. A dented pump caused the production of electricity to reduce by 18% resulting in huge financial debts. The major challenge is temperature decline on the main resource pumps, which is the core of the operations. The company had to face huge debts because of the poor production of electricity minimising the supply by almost half. This huge debt is the reason why the company has been declining in its operations (Agency Group, 0, n.d).
The challenge of temperature dropping in Nevada Geothermal power is the core of the problems. This is because the future of electricity output is affected greatly including their main location, Mountain Faulkner 1. The temperature needs to increase constantly and if it begins to drop, the success of the companys operations is ruined. The company has faced challenges even in the past because of too much time spent drilling wells, which causes the electricity output to stagnate. The company shares have been reported to decline over the years causing further financial strain. It is now an issue of paying its debts to avoid bankruptcy and loss of jobs for all of its employees. The company has to maintain its production level constant for survival (Thibault, 2007).
Nevada Geothermal Power Company deals with geothermal energy, which is safe for the environment. They produce their energy through safe and secure drilled wells that observe environmental concerns. This energy is renewable, ensuring efficient usage over the years. The financial problems of the company did not deter them from ethical issues to their employees and the environment in general. There are no employees dropped from the company because of the financial crisis. The company did not result to other means of unsafe production of electricity to cover their debts. They have always observed company policies and employees’ needs in the business (Neville, 2010)
Significance, Scope, Magnitude and Feasibility of Finding a Solution
The importance of finding a solution for Nevada Geothermal is to ensure that the company is able to build its operations successfully. This will improve its output and benefit the employees in the end. The scope or extent of the solution lies in the building of strong operations to increase power output. This has seen the company partnering with Ormat drill in a recent Nevada location to enhance production. This is a big possibility for the company since teaming up with other companies in the market ensures that they get a competitive edge (Thibault, 2007).
The production of enough energy or power is a guarantee that the financial problems of the company will be solved. The company has come up with strong strategies through reduction of prices to help penetrate the market. These solutions enable the company to build a wide client base for their power. This is the main objective of the directors and business partners to ensure they enjoy a successful business venture. It is also significant for the business to survive to ensure employee motivation (Nevada Geo. Struggles With Debt, 2011).
Purpose of the Research
The purpose of this study is to make out the challenges facing Nevada Geothermal Power Company in terms of the production and financial problems. The research also identifies causes and results of the problems that the company undergoes. There is the need to understand the ethical issues of the company and the solutions to their problems (Thibault, 2007).
Agency Group, 0. (n.d). Department of Energy Issues Loan Guarantee Supported by Recovery Act for Nevada Geothermal Project. FDCH Regulatory Intelligence Database,
Nevada Geo. Struggles With Debt. (2011). Power Finance & Risk, 14(39), 2.
Neville, A. (2010). Blue Mountain Faulkner 1 Geothermal Povtfef Plant, Humboldt County, Nevada. Power, 154(12), 28-29.
Thibault, J. (2007). Nevada Geothermal Power, Inc. (OTC BB: NGLPF; TSX.V: NGP). (cover story). Equities Special Situations, (545), 1-7.
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