Ormat Technologies, Inc.
Geothermal 101 and Land Development
Mining & Land Resources Institute
March 15, 2012
Bill Sherman, Land Department Manager
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Disclaimer
Statements in this presentation as well as oral statements made by the officers or directors of Ormat
Technologies, Inc., its advisors, affiliates or subsidiaries often will contain “forward-looking statements.”
Whenever you read or hear a statement that is not simply a statement of historical fact (such as when we
describe what we “believe”, “expect” or “anticipate” will occur, and other similar statements), you must
remember that our expectations may not be correct, even though we believe they are reasonable. You
should read and listen to these statements completely and with the understanding that actual future results
may be materially different from what we expect, as a result of certain risks and uncertainties. For a
complete discussion of the risks and uncertainties relating to the forward-looking statements in this
presentation, please see “Risk Factors” as described in the Annual Report on Form 10-K report filed with
the Securities and Exchange Commission on 28 February 2011.
We will not update these forward-looking statements, even though our situation will change in the future.
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1
Ormat Technologies, Inc.
110 MW geothermal Combined
Cycle Plant, New Zealand

A pioneer and world leader in Organic Ranking Cycle
(ORC) technology, with a focus on Geothermal and
Recovered Energy Generation REG® power applications

10 MW Geothermal modular binary
unit, San Miguel Island

Listed on the New York Stock Exchange (NYSE: ORA)
•
Market cap: $863 million*
•
Sales 2010: $373 Million
•
Over 500 employees in the U.S. (~1,150 worldwide)
Supplied 1,410 MW of geothermal and recovered energy
power plants in 24 countries, owns and operates 553 MW
generation worldwide

Vertically integrated

R&D, engineering, manufacturing, installation, support &
O&M

Equipment Supply, EPC, BOT or IPP
* Market Cap. As of November 3, 2011
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2
Issues with Primary Fossil Fuels

Coal
•
•
•

Natural gas
•
•
•

Most polluting source of fossil fuel electricity
Produces the most carbon dioxide, contributing to climate change
Uses significant water resources for cooling
Produces significantly less key pollutants than coal (such as Sulfur
Dioxide and Particulate Matter)
Produces up to 50% as much carbon dioxide as coal
Many uses besides electricity and supply has historically been limited
Nuclear
•
•
•
•
Facilities are clean burning, however produce nuclear waste which
must be stored on-site
Expensive form of new generation due to high capital costs and the
need for additional safety and security protections
Generally require significant water resources for cooling
Concerns over Japan delay projects all over the world
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3
Renewable Sources

Hydro-electric (6-7% of total U.S. generation)
•

Wind power (2% of total U.S. generation)
•
•
•

Refers to landfill gas, waste-to-energy, or plant, animal, or wood waste
Base-load, but requires a steady source of biomass fuel to operate
Often co-fired with coal to reduce overall emissions
Geothermal (0.35% of total U.S. generation)
•

2nd fastest growing source of new electric generation after natural gas
Grew from 2.5 GW by the end of 20th Century to 42 GW today
Intermittent (produce electricity only when the wind blows)
Biomass (1% of total U.S. generation)
•
•
•

Most large projects built in the 1940s - 1970s
More details on upcoming slides
Solar (About 0.25% of total U.S. generation)
•
•
•
Peaks during the summer high demand
Fast growing market; prices going down fast
Can be small (for devices to rooftops) or big (large areas covered by panels or
concentrating solar power)
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4
What Drives the Renewable Energy Market

Population

Power Prices

Pollution

Reliance on Energy Imports

Regulation

Incentives
All affect California. Hawaii and Nevada are particularly reliant on
energy imports. However, this is the trend in nearly all Western states,
and that bodes well for the geothermal industry in providing a viable
alternative.
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5
What is Geothermal?

Geo = earth and thermal = heat

Geothermal energy is hot water and steam from below the earth’s
surface

Geothermal fluid is generally found in a reservoir deep underground

Steam has been a source of energy production since the beginning of
the Industrial Revolution

Geothermal systems produce a natural source of steam from aquifers
of hot water heated by “hot rocks” underground

These hot rocks exist for hundreds of thousands of years and heat up
underground aquifers of hot water

This is why geothermal is considered “renewable”
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6
Geothermal Key Attributes
 Utilities’ renewable energy of choice:
•
Base-load generation
•
Cost-competitive
•
Highly reliable: >95% availability
•
Proven technology: ~10,000 MW deployed worldwide
 No fuel cost risk; Fixed long-term pricing
 Sustainable & environmentally friendly
•
Closed loop system with near zero emissions
•
No water consumption
•
Minimal surface and visual impact
 Creates long-term, high-quality jobs
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7
Where are Geothermal Resources Found
Estimated Earth temperature at 6-km (3.7 mile) depth
SMU Geothermal Laboratory
Source-National Renewable Energy Lab (NREL)
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8
Resources and Power Plant Technologies
Resource Temperature (ºF)
100
200
300
400
500
600
Binary (ORC) Plants
Steam Plants
Geothermal Combined Cycle
Liquiddominated
Geofluid state
Steamdominated
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9
Typical Geothermal Project Development Process
Permitting
Locating
Potential Sites
Signing PPA
Exploration
Activities
Equipment
Manufacturing
Field Development
Construction
Start up
Commercial
Operation
2 Years
3 Years
• Location of site
• PPA
• Testing and start-up
• Lease agreement
• Plant design
• Acceptance test
• Permitting
• Completion field development
and equipment manufacturing
• Commercial operation
• Exploration
• Initial field development &
well testing
• Plant permits
• Gathering system and plant
construction
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10
Power Plant Technology Considerations
 Designing the geothermal power plant requires
matching the characteristics of the geothermal fluid with
the optimum power cycle
 The market driver is energy production and availability
 Power generation factors are:
• Reservoir management
• Power plant reliability
• Environmental consideration
• System simplicity
• Maintenance requirements
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11
Considerations (Continued)
 The optimum power cycle allows for injection of the
geothermal fluid for long-term reservoir sustainability
 The optimum power cycle provides for the maximum output
from available geothermal heat source with simplicity and
high plant reliability
•
The project output is commercial grade electricity with financeable,
field-proven technology
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12
How the Technology Works
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Truck Mounted Drilling Rig: looking for heat
Drilling a Temperature Gradient Hole
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14
Slim Hole Drilling Rig: temp. gradient hole
Nevada in the winter – GeoDrill, LLC
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15
Drilling a Production Well at Mammoth, CA
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16
A Peek into the Land Acquisition Process
Land Acquisition Flow Chart
RESOURSE/EXPLORATION
GROUPS REVIEW DATA AND
DETERMINE AREAS OF
POTENTIAL INTEREST
[1]
(Numbers in [ ] reference written descriptions attached)
PUBLIC LANDS
(BLM, FS, STATE)
[8]
PRIVATE LANDS
[2]
LAND DEPARTMENT DOES
INITIAL INVESTIGATION AND
REPORTS BACK
[3]
IF FOREST SERVICE LAND,
LOWER PRIORITY
[12]
LAND DEPARTMENT DOES
INITIAL INVESTIGATION AND
REPORTS BACK WHILE
EXPLORATION RESOURCE
GROUPS CONDUCT
ENVIRONMENTAL REVIEW
[9]
EXPLORATION/RESOURCE
GROUPS DETERMINE LEVEL
OF INTEREST
[4]
FOREST SERVICE LAND NOT
AVAILABLE PENDING UPDATE
OF LAND MANAGEMENT PLAN
DATE UNCERTAIN
[13]
EXPLORATION/RESOURCE
GROUPS REVIEW –
DETERMINE LEVEL OF
INTEREST
[10]
IF STATE, EITHER NOMINATE
FOR AUCTION OR FOLLOW
APPLICATION PROCESS
[15]
OBTAIN MANAGEMENT
APPROVAL ON PROJECT AND
RECOMMENDED LEASE
STRUCTURE
[5]
ONCE PEIS AND LAND
MANAGEMENT PLAN
COMPLETED, FOREST
SERVICE WILL FOLLOW BLM
AUCTION PROCEDURES
[14]
IF BLM, NOMINATE FOR
AUCTION IF LANDS COVERED
UNDER PEIS OR OTHER NEPA
DOCUMENT FOR LEASING
[11]
IF STATE FOLLOWS
APPLICATION PROCESS, MAKE
APPLICATION
[16]
LAND DEPARTMENT
NEGOTIATES LEASES/
PURCHASES
[6]
RESOURCE GROUP
DEVELOPS PLAN OF
EXPLORATION/DEVELOPMENT
[7]
IF LEASED, NO FURTHER
ACTION
[20]
IF SERIOUS INTEREST FOR
LAND, POSSIBLE
NEGOTIATION TO ACQUIRE
[21]
OBTAIN MANAGEMENT
APPROVAL TO PROCEED AND
PARAMETERS FOR AUCTION
BIDDING FOR BLM, AND STATE
LANDS REQUIRING AUCTION
[17]
IF SUCCESSFUL, RESOURCE
GROUP PREPARES PLAN OF
EXPLORATION AND, IF
NECESSARY, LAND &
RESOURCE PREPARE AND
FILE UNIT APPLICATION
[18]
IF UNSUCCESSFUL, NO
FURTHER ACTION UNTIL NEXT
AUCTION
[19]
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WRS 10-22-07
17
Geothermal Energy
 Base-load Generation
 Sustainable
 Environmentally Friendly
 So hot….it’s cool
 Thank You for Your Attention
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18