Sierra Geothermal Power Corp.
TSX VENTURE : SRA

Sierra Geothermal Power Corp.

December 16, 2008 09:30 ET

Sierra Geothermal Power Drops Pumpernickel Option

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 16, 2008) - Sierra Geothermal Power Corp. (SGP) (TSX VENTURE:SRA) announces that it has decided not to exercise its option to earn a 50 percent interest in the Pumpernickel Project in Nevada. Under the terms of its option agreement with Nevada Geothermal Power dated October 12, 2004, SGP could have exercised the option on or before December 15, 2008, by providing $4 million for work commitments, paying a $70,000 option payment and issuing 200,000 of its common shares to Nevada Geothermal Power.

Gary Thompson, CEO of SGP, said that "When we considered this project in light of the current state of our economy and our stock markets, to say nothing of how it relates to our total portfolio, we determined that it was not in our best interest to exercise the option. Although the Pumpernickel Project remains an attractive geothermal target, our potential 50 percent interest comprised a very small portion of our total portfolio and power output estimates. We have determined that it is more prudent to conserve capital and focus on our wholly owned projects. We have approximately $4 million on hand and no debt as of December 15, 2008. We own a 100% interest in the remainder of our portfolio of projects subject to a US$151,000 payment due April 2009."

About Sierra Geothermal Power Corp.

SGP is a Vancouver-based renewable energy company focused on the exploration and development of clean, sustainable geothermal power. SGP's 16 projects comprise a total of 90,000 acres of geothermal land assets in Nevada and California. The company intends to advance the development of its portfolio of projects through joint ventures. To find out more about Sierra Geothermal Power Corp. (TSX VENTURE:SRA) visit our website at www.sierrageopower.com.

On behalf of the Board of Directors,

Gary Thompson, President & CEO

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for future operations. In some cases you can identify forward-looking statements by the use of terminology such as "may", "should", "anticipates", "believes", "expects", "intends", "forecasts", "plans", "future", "strategy", or words of similar meaning. Examples of forward-looking statements made in this press release include statements about SGP's belief that it can conserve capital and focus on its wholly-owned projects. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks inherent in SGP's industry, the poor capital markets and other risks identified by SGP in its periodic filings on SEDAR (which can be viewed at www.sedar.com). Any of these risks could cause SGP's or its industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect SGP's current judgment regarding the direction of its business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this press release. Except as required by applicable law, including the securities laws of Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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