GeothermalDevelopment
Opportunities
Paul Thomsen
Ormat Technologies, Inc.
GREEN ENERGY you can depend on
Disclaimer
Statementsinthispresentationaswellasoralstatementsmadebytheofficersor
directorsofOrmatTechnologies,Inc.,itsadvisors,affiliatesorsubsidiariesoftenwill
contain“forward‐lookingstatements.”Wheneveryoureadorhearastatementthat
isnotsimplyastatementofhistoricalfact(suchaswhenwedescribewhatwe
“believe”,“expect”or“anticipate”willoccur,andothersimilarstatements),youmust
rememberthatourexpectationsmaynotbecorrect,eventhoughwebelievethey
arereasonable.Youshouldreadandlistentothesestatementscompletelyandwith
theunderstandingthatactualfutureresultsmaybemateriallydifferentfromwhat
weexpect,asaresultofcertainrisksanduncertainties.Foracompletediscussionof
therisksanduncertaintiesrelatingtotheforward‐lookingstatementsinthis
presentation,pleasesee“RiskFactors”asdescribedintheAnnualReportonForm
10‐KreportfiledwiththeSecuritiesandExchangeCommissiononMarch2,2009.
Wewillnotupdatetheseforward‐lookingstatements,eventhoughoursituationwill
changeinthefuture.
GREEN ENERGY you can depend on
Outline

ReviewofOrmat’sworldwidegeothermalinstalled‐base

Developmentchallengesinemergingmarkets

Geothermalprojectdevelopment

Examplesco‐producedgeothermalprojects&REGprojects.

IndigenouswastewaterandwasteheatpotentialinLouisiana

Summary
GREEN ENERGY you can depend on
OrmatTechnologies

AleaderintheGeothermalandRecoveredEnergyPowerBusiness
• Pure‐Play,CleanEnergyGrowthCompany
• Owns505MW
• Supplied~1,200MWofgeothermalandREGpowerplantin23countries
• Ormatmakesup~70%ofgeothermalcapacityinstalledintheU.S.since
2000

FullyContractedGeneration
• BaseLoad
• CompetitivePricing
• VisibleCashFlow

Vertically‐Integrated
• Activeindesign,engineering,supply,installation,supportandoperationof
renewableandsustainableenergysince1965
• TechnologyLeadership
GREEN ENERGY you can depend on
4
MainAreasofActivities
Reliable Distributed Power
Geothermal Power Plants
Heat Recovery - Pipelines
GREEN ENERGY you can depend on
Resource Recovery: Biomass
Industrial Waste Heat Recovery
OrmatGeothermal
Worldwide Presence
1996
1992 - 2008
92 MW Heber Binary Geothermal
Complex, California
125 MW Upper Mahiao Combined
Geothermal Power Plant, Philippines
2000 - 2007
1985-2008
84 MW Steamboat Geothermal
Complex, Nevada
120 MW Mokai Combined Cycle
Geothermal Complex, New Zealand
GREEN ENERGY you can depend on
1994 - 1998
14 MW Sao Miguel Geothermal Power
Plant, Azores Islands
2007
20 MW Amatitlan Geothermal Power
Plant, Guatemala
6
OrmatRecoveredEnergy
1992
5.5 MW Kerrobert REG Project,
Saskatchewan, Canada
1.5 MW Heidelberg Cement REG
Project, Germany
GREEN ENERGY you can depend on
5.5 MW Northern Border Pipeline
REG Project (OREG1), North Dakota
4.6 MW Neptune REG Project,
Louisiana
GlobalInstalled‐Base
North and South
Dakota, 27 MW
California, 214 MW
Nevada, 106 MW
Hawaii, 30 MW
Nicaragua, 28 MW
Guatemala, 44 MW
Kenya 48 MW
New Zealand, 8MW
Geothermal Power plants
Recovered Energy Generation (REG)
Remote Power Units
GREEN ENERGY you can depend on
DevelopmentChallengesinEmergingMarkets
Life is really simple, but we insist on making it complicated”
Confucius
 Financing:



• Smallcapacityyethighinitialinvestmentcosts
• Lifecyclecostoffuelembeddedinup‐frontCAPEX
Creditrisks:
• Political,resourceandoff‐takers
Competitionwithfossilfuels:
• Fossilfuelsubsidies
• NopenaltiesforGHGemissions
• Insufficientincentivesforrenewables
Monopolisticenvironment
GREEN ENERGY you can depend on
TypicalProjectDevelopmentProcess
Transmission & Interconnection
Power Purchase
Agreement
Seeking &
Obtaining
land
Predrilling
explora
tion
1
Dril
ling
Per
mit.
Explorati
on
drilling
2
3
Plant
Perm
it.
EPC & Field
development
4
5
Operation
6 ~ 35
yr
“Everything should be made as simple as possible, but not simpler”
A. Einstein
GREEN ENERGY you can depend on
TypicalProjectDevelopmentProcess
Transmission & Interconnection
Power Purchase
Agreement
Seeking &
Obtaining
land
Predrilling
explora
tion
1
Dril
ling
Per
mit.
Explorati
on
drilling
2
3
•Identify lands w/ potentially good geothermal
resources
•Lease: federal / state / private / other
•This process can be very slow
GREEN ENERGY you can depend on
Plant
Perm
it.
EPC & Field
development
4
5
Operation
6 ~ 35
yr
TypicalProjectDevelopmentProcess
Transmission & Interconnection
Power Purchase
Agreement
Seeking &
Obtaining
land
Predrilling
explora
tion
1
Dril
ling
Per
mit.
Explorati
on
drilling
2
3
•Geochemical and geophysical surveys
•Develop geological model
•Specialized technology required in order
to optimize the drilling phase
•Covers: air, water, cultural, biological,
botanical, other issues
•A discretionary process
•Can be very slow
GREEN ENERGY you can depend on
Plant
Perm
it.
EPC & Field
development
4
5
•Temperature gradient holes
•Slim holes
•Update geological model
•Full-size deep wells
•Resource confirmation
•Capital intensive
•High risk
Operation
6 ~ 35
yr
TypicalProjectDevelopmentProcess
Transmission & Interconnection
Power Purchase
Agreement
Seeking &
Obtaining
land
Predrilling
explora
tion
1
Dril
ling
Per
mit.
Explorati
on
drilling
2
3
Plant
Perm
it.
EPC & Field
development
4
5
Operation
6 ~ 35
•Covers: air, water, cultural, biological, botanical, visual, safety, other issues
•A discretionary process with little influence by the developer
•Can be very slow
•Drilling all additional production and reinjection wells
•Conceptual and detailed plant design
•Manufacturing and/or purchasing
•Construction of plant and well-field
•Capital intensive
•Specialized technology required to optimize resource utilization
GREEN ENERGY you can depend on
yr
TypicalProjectDevelopmentProcess
Transmission & Interconnection
Power Purchase
Agreement
Seeking &
Obtaining
land
Predrilling
explora
tion
1
Dril
ling
Per
mit.
Explorati
on
drilling
2
3
Plant
Perm
it.
EPC & Field
development
4
5
Operation
6 ~ 35
•Negotiate and sign agreement/s for power and RECs with utilities and/or private
users
•Limited willingness by utilities to share the risk of failing to confirm the resource
•Interconnection studies; Interconnection agreement
•Poor matching between grid and many geothermal resources
•Construction of transmission line and substation – usually by the developer
GREEN ENERGY you can depend on
yr
TypicalProjectDevelopmentProcess
Transmission & Interconnection
Power Purchase
Agreement
Seeking &
Obtaining
land
Predrilling
explora
tion
1
Dril
ling
Per
mit.
Explorati
on
drilling
2
3
Plant
Perm
it.
EPC & Field
development
4
5
Operation
6 ~ 35
•Operate the plant
•Maximizing availability and minimizing O&M costs are critical to succeed
GREEN ENERGY you can depend on
yr
GeothermalfromGeo‐pressuredsystems

TechnologyExamples
GREEN ENERGY you can depend on
GeothermalfromGeo‐pressuredsystems
 Naturalgasproductionandelectricitygeneration
fromgeo‐pressured‐geothermalaquifersisan
unconventionalhydrocarbonsourcethathaslong
beenunproductiveduetoitsmarginaleconomicsand
lackoftechnologicalcertainty.
 Todaythatmaybechanging
• Taxincentives
• ClimateChange
• RPS
GREEN ENERGY you can depend on
GeothermalfromGeo‐pressuredsystems

BarrierstoGeo‐pressuredgeothermaldevelopment

Thereislittlepublishedinformationconcerningtemperaturegradient,bottom‐
holetemperatureandheatflowintheGulfCoast,particularlyfrommodernwells.
Thisdatacouldbecollectedandmadeavailable.

DOEfundedflowtestsonseveralwellsandtheygenerallywereabletosustain
sizeableflowrates.OnlyPleasantBayouhadareallyextendedproduction
history.Somequestionsthatweren'tansweredincludewhetherthereisa
rechargemechanism(Shookbelievedthattheremightbe)sothatthereservoirs
actuallymightproducesignificantlymorefluidthanoriginalproduction
estimates.Aproperlyinstrumentedflowtestmightanswerthisquestion.The
secondquestionisthemechanismofrecharge.

methodsofdisposingofthespentproductionfluid.Thiswasamajorcostitemin
theoriginalDOEprogramsinceitrequiredacostlyfluiddisposalwell.Without
that,economicsweremuchbetter.
GREEN ENERGY you can depend on
Ormat– 40yearsoftechnicalinnovation

However
GREEN ENERGY you can depend on
Ormat– 40yearsoftechnicalinnovation
Solar Powered ORC Water Pump – Mali 1966
High Reliability ORC Power Unit for Alyeska P/L 1976
5 MW Solar Pond Collects and Stores Energy - 1982
1 MW ORC Solar Thermal Project –Arizona 2006
GREEN ENERGY you can depend on
GREEN ENERGY you can depend on
CaseStudy‐ RMOTC
Rocky Mountain Oilfield Testing Center (RMOTC) being used for
Ormat demonstration power plant
GREEN ENERGY you can depend on
CaseStudy‐ RMOTC
GREEN ENERGY you can depend on
CaseStudy‐ RMOTC
FlowRate:
40,000BWPD(1167gpm)
InletTemperature:
170°F
OutletTemperature:
152°F
AmbientTemperature:
50°F
GeneratorGrossPower:
180kW
NetPowerOutput:
132kW
GREEN ENERGY you can depend on
CaseStudy‐ RMOTC
Rocky Mountain Oilfield Testing Center (RMOTC) being used for
Ormat demonstration power plant
GREEN ENERGY you can depend on
LowTemperatureResource




1979,ManleyHotSprings,AK
120ºFbrineinlettemperature,18gpm
39ºFcoolingwaterinlet,79gpm
2.0kWgrossoutput
GREEN ENERGY you can depend on
LowTemperatureResource

CollaborativeR&Dprojectwiththe
BureauofReclamationandUTEP

70kWSolarPond

ORCPowerUnitatElPaso,Texas

Inoperationfrom1986to2002

temperaturesof154ºFto190ºF
GREEN ENERGY you can depend on
LowTemperatureResource

250kWOECPowerPlantProvidesPower&Heatfrom210ºF
GeothermalFluid
GREEN ENERGY you can depend on
Co‐production,anewchallenge
 Generatingpowerfromproducedwater
 Reducewellfieldoperatingcosts
 Eliminatefossilfuelconsumption
 Reducemaintenancecosts
 Introduceemissionfreeenergyproduction
 Potentialgreenenergytaxincentives
GREEN ENERGY you can depend on
Co‐production,anewchallenge
 Resourcechemistry,dependability
•
•
•
•
Majorfactorisheatexchangerlifespan
FoulingandcorrosionwillreduceHEXlife
IncreasedO&Mcostswillreduceeconomicbenefits
Everyresourceisdifferent
 Cooling
• Watercoolingrequirescoolingtower,constantmake‐
upwater,andadditionalpumps
• Aircooling(drycooling)canbeutilizedanywhere
GREEN ENERGY you can depend on
RecoveredEnergyGeneration(REG)
 TheHiddenGreenResource
GREEN ENERGY you can depend on
GREEN ENERGY you can depend on
GREEN ENERGY you can depend on
OneTechnology/DifferentApplications
Turbine– Generator
set&Air‐cooled
Condensers
Heat Exchangers –
preheater and
vaporizer set
OREG 1 – REG Project at NBPL CS 7
GREEN ENERGY you can depend on
Galena – Geothermal plant
REGTechnologyBenefits

Packagedmodularsystem– faston‐siteinstallation

Highturbineefficiencyatlowspeed
• 1800RPM,60Hz,Operation

Reliableunattendedoperation,nosteamoperatorsrequired

LowOperationandMaintenanceCost

Notsusceptibletofreezing

Ruggeddesign
• Outdoorinstallationtypical(eveninsevereclimates)
GREEN ENERGY you can depend on
REGTechnologyBenefits

Accommodatingtofluctuatingloads

Fieldproventechnology

Environmentallyfriendly
•
•
•
•
Nofuelconsumption
Zeroemissions
Nowaterconsumption
Qualifiesas“GreenPower”inmanystatesand
environmentallypreferredpowerinsomeprovinces

Blackstartandislandmodecapability

Insignificantimpactongasturbinecompressoroperation
GREEN ENERGY you can depend on
REGTechnologyBenefits

Ninestates‐Connecticut,Hawaii,Maine,Nevada,Pennsylvania,
Colorado,NorthandSouthDakota,andWashingtoninclude
wasteheatrecoveryasaneligiblerenewableresource.

BecausenoadditionalfueliscombustedandRecoveredEnergy
Generationallowsfordistributedgeneration(DG),itoffersa
numberofenvironmentalandeconomicbenefits,whichinclude:
• Reducedemissionsofallairpollutants
• Fewergreenhousegasemissions,suchascarbondioxide
(CO2)
• Fewercriteriaairpollutants,includingnitrogenoxides
(NOX)andsulfurdioxide(SO2)



Reducedgridcongestionandavoideddistributionlosses
Increasedreliabilityandpowerquality
Loweroperatingcosts
GREEN ENERGY you can depend on
Technology‐ Flexibleinstallation

TheREGsystemallowsforsomelargedistancesbetweenthelocationoftheheatexchanger(Waste
HeatOilHeater)andtheOEC.
OEC
Original
Stack/Silencer
WHOH
*
Diverter
Gas
Turbine
Enclosure
GREEN ENERGY you can depend on
Technology‐ Minimuminterruption
ProcessInterruptionlessthan48hours(CompressorStation)
GREEN ENERGY you can depend on
ResourcePotential

Louisianacanandshouldbenefitfromwastewaterandwaste
heat!

Geothermal=?
• Additionalfeasibilityanalysisneeded

RecoveredEnergyGeneration=118.4MWe
• Confirmedonexistingpipelinesandprocessingplants
GREEN ENERGY you can depend on
Geothermal&RecoveredEnergy
Capacity / Availability
Factor
Environmental Impact
Cost cent/kW/h
30.00
100%
Polluting
Environmentally
friendly
90%
25.00
80%
70%
20.00
60%
15.00
50%
40%
10.00
30%
20%
5.00
10%
0.00
0%
Solar
Thermal
Wind
Hydro-Small IGCC (Coal)
Scale
CC (Gas)
REG
Biomass
Advanced Geothermal
Nuclear
Source: Competitive costs of California central station electricity generation technologies, California Energy Commission
December 2007, and Ormat.
GREEN ENERGY you can depend on
Summary
 Ormatisdevelopingworldclassgeothermalpowerplants
 Ormatiscommittedtosuccessfullyimplementing
innovativetechnologies
 Geothermalpowerprojectsarecomplicated:
• Significantrisk‐capitalrequiredforresource
development
• Requireshighlevelofexpertiseinbothdevelopment
andO&M
 Moreshouldbedonetoincentivizerenewablesinsome
emergingmarkets
GREEN ENERGY you can depend on
Summary
 Pioneeringlowtemperaturegeothermalfor30years
 Co‐producedwater,agenerousresource
• Challenge:Long‐termreliability
 RMOTCOECExperiencegainedinoilfieldproduction
 Geothermal/REG– Offerdomesticbaseload
renewablesolutionstoclimatechangeandlegislative
obligations
GREEN ENERGY you can depend on
Contact
PaulThomsen
ORMATTechnologies
6225NeilRoad,Suite300
Reno,NV89511
Phone:775.356.9029
E‐mail:[email protected]
Internet:www.ormat.com
GREEN ENERGY you can depend on