Sierra Geothermal Power Corp.
TSX VENTURE : SRA

Sierra Geothermal Power Corp.

June 03, 2009 11:17 ET

Sierra Geothermal to Apply for US-DOE Grants

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 3, 2009) - Sierra Geothermal Power Corp. (TSX VENTURE:SRA) ("SGP") today announced that it plans to apply for grant funding made available by the US Government under three Funding Opportunity Announcements ("FOAs"). On May 27, 2009, President Obama announced the US Department of Energy ("DOE") will allocate US$350 million from the American Reinvestment and Recovery Act (the "Recovery Act") to new investments in geothermal power. The FOAs set out the criteria for evaluating grant applications under this initiative and the amount of funding available per grant.

SGP intends to submit several of its projects under the Geothermal Technologies Program FOA which has a funding ceiling of US$5 million per application. The grant will fund between 50 and 80 percent of a program's cost. SGP also intends to submit its Reese River project under The Enhanced Geothermal Systems ("EGS") Component Research and Development / Analysis FOA, and is considering submitting the project under The Enhanced Geothermal Systems Demonstrations FOA. These EGS grants have a funding ceiling of US$5 million and US$25 million per application respectively, and will fund 80 percent and 50 percent of a program's cost respectively. The results of exploration activities conducted at Reese River suggest the potential for both conventional geothermal and EGS power generation projects. If SGP is successful in its applications, the DOE grants will provide a portion of the funding required to move SGP's more advanced projects to feasibility.

The Recovery Act gives preference to activities that can rapidly assist in economic recovery. The DOE states that it will give "special consideration ... to projects that promote and enhance the objectives of the (Recovery Act), especially job creation, preservation and economic recovery, in an expeditious manner." Therefore, SGP believes that having a completed environmental assessment (a process which can take more than two years) will be a key differentiator in the DOE's assessment of grant applications as it will allow grant applicants to commence their proposed work programs sooner. SGP has two projects with completed environmental assessments and a third project with its environmental assessment nearing completion.

Gary R. Thompson, President and CEO, said, "We are extremely excited about this opportunity and applaud the Obama Administration on this program that has stimulated interest in the geothermal space and should accelerate the pace at which clean, renewable geothermal megawatts are brought online. We believe we are well-positioned to meet the objectives set forth by the DOE. For example, with several of our projects 'drill-ready', we are prepared to quickly put grant funding to work, meeting one of the DOE's criteria for selecting projects."

The DOE has indicated that it intends to give notification of awards to applicants for the two EGS FOAs in September 2009, and for the Geothermal Technologies Program FOA by November 15, 2009.

About Sierra Geothermal Power Corp.

Sierra Geothermal Power Corp. is a renewable energy company focused on the exploration and development of clean, sustainable geothermal power. It is based in Vancouver, British Columbia and listed on the TSX Venture Exchange under the symbol SRA. Its portfolio of geothermal projects located in Nevada and California exceeds 365 square kilometres (90,000 acres) and has a combined total estimated capacity of greater than 500 MW. SGP intends to finance development by utilizing a combination of corporate equity, joint venture partnerships and project debt, with the support of US government grants and loan guarantees. 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, P.Geo, President, Chief Executive Officer and Director

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. Forward-looking statements in this press release include statements about SGP's intent to submit several of its projects under the Geothermal Technologies Program FOA and its intent to submit its Reese River project under The Enhanced Geothermal Systems ("EGS") Component Research and Development / Analysis FOA; that SGP is considering submitting the Reese River project under The Enhanced Geothermal Systems Demonstrations FOA; that the results of exploration activities conducted at Reese River suggest the potential for both conventional geothermal and EGS power generation projects; that if SGP is successful in its applications, the DOE grants will provide a portion of the funding required to move SGP's more advanced projects to feasibility; that SGP believes that having a completed environmental assessment will be a key differentiator in the DOE's assessment of grant applications as it will allow grant applicants to commence their proposed work programs sooner; that SGP believes it is well-positioned to meet the objectives set forth by the DOE; that with several of its projects 'drill-ready', SGP is prepared to quickly put grant funding to work; and that the Company's intends to finance the development of its projects through a combination of corporate equity, joint venture partnerships and project debt with the support of U.S. government grants and loan guarantees. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks inherent in our industry, the poor capital markets and other risks identified by us in our periodic filings on SEDAR (which can be viewed at www.sedar.com). Any of these risks could cause our or our 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 our 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.

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