geothermal development opportunitiesgeothermal complex, new zealand 2000 - 2007 125 mw upper mahiao...

GREEN ENERGY you can depend on

Paul ThomsenOrmat Technologies, Inc.

GeothermalDevelopmentOpportunities


Disclaimer

StatementsinthispresentationaswellasoralstatementsmadebytheofficersordirectorsofOrmatTechnologies,Inc.,itsadvisors,affiliatesorsubsidiariesoftenwillcontain“forward‐lookingstatements.”Wheneveryoureadorhearastatementthatisnotsimplyastatementofhistoricalfact(suchaswhenwedescribewhatwe“believe”,“expect”or“anticipate”willoccur,andothersimilarstatements),youmustrememberthatourexpectationsmaynotbecorrect,eventhoughwebelievetheyarereasonable.Youshouldreadandlistentothesestatementscompletelyandwiththeunderstandingthatactualfutureresultsmaybemateriallydifferentfromwhatweexpect,asaresultofcertainrisksanduncertainties.Foracompletediscussionoftherisksanduncertaintiesrelatingtotheforward‐lookingstatementsinthispresentation,pleasesee“RiskFactors”asdescribedintheAnnualReportonForm10‐KreportfiledwiththeSecuritiesandExchangeCommissiononMarch2,2009.

Wewillnotupdatetheseforward‐lookingstatements,eventhoughoursituationwillchangeinthefuture.


Outline

ReviewofOrmat’sworldwidegeothermalinstalled‐base

Developmentchallengesinemergingmarkets

Geothermalprojectdevelopment

Examplesco‐producedgeothermalprojects&REGprojects.

IndigenouswastewaterandwasteheatpotentialinLouisiana

Summary

GREEN ENERGY you can depend on4

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


MainAreasofActivities

Resource Recovery: BiomassGeothermal Power Plants

Industrial Waste Heat RecoveryHeat Recovery - Pipelines

Reliable Distributed Power

GREEN ENERGY you can depend on6

120 MW Mokai Combined Cycle Geothermal Complex, New Zealand

2000 - 2007

125 MW Upper Mahiao Combined Geothermal Power Plant, Philippines

1996

84 MW Steamboat Geothermal Complex, Nevada

Worldwide Presence

1985-2008

20 MW Amatitlan Geothermal Power Plant, Guatemala

2007

92 MW Heber Binary Geothermal Complex, California

1994 - 1998

14 MW Sao Miguel Geothermal Power Plant, Azores Islands

OrmatGeothermal

1992 - 2008


1992

OrmatRecoveredEnergy

5.5 MW Kerrobert REG Project, Saskatchewan, Canada

5.5 MW Northern Border Pipeline REG Project (OREG1), North Dakota

1.5 MW Heidelberg Cement REG Project, Germany

4.6 MW Neptune REG Project, Louisiana


Geothermal Power plantsRecovered Energy Generation (REG)Remote Power Units

North and South Dakota, 27 MW

California, 214 MW

Nicaragua, 28 MW

Guatemala, 44 MW

Nevada, 106 MW

Hawaii, 30 MW

Kenya 48 MW

New Zealand, 8MW

GlobalInstalled‐Base


DevelopmentChallengesinEmergingMarkets

Financing:• Smallcapacityyethighinitialinvestmentcosts• Lifecyclecostoffuelembeddedinup‐frontCAPEX

Creditrisks:• Political,resourceandoff‐takers

Competitionwithfossilfuels:• Fossilfuelsubsidies• NopenaltiesforGHGemissions• Insufficientincentivesforrenewables

Monopolisticenvironment

Life is really simple, but we insist on making it complicated”Confucius


Power Purchase Agreement

Plant Perm

it.

Drilling Permit.

Transmission & Interconnection

Exploration

drilling

Seeking & Obtaining

land

TypicalProjectDevelopmentProcess

5 yr1 6 ~ 353 4

OperationEPC & Field development

Pre-drilling explora

tion

2

“Everything should be made as simple as possible, but not simpler”

A. Einstein




Seeking & Obtaining

land


5 yr1 6 ~ 353 4

Operation


tion

•Identify lands w/ potentially good geothermal resources•Lease: federal / state / private / other•This process can be very slow

2

Plant Perm

it.

Drilling Permit.

Exploration

drilling

EPC & Field development


Drilling Permit.

Exploration

drilling



Operation


tion


•Covers: air, water, cultural, biological, botanical, other issues•A discretionary process•Can be very slow

•Geochemical and geophysical surveys•Develop geological model•Specialized technology required in order to optimize the drilling phase

•Temperature gradient holes•Slim holes•Update geological model•Full-size deep wells•Resource confirmation•Capital intensive•High risk

5 yr1 6 ~ 353 42

Seeking & Obtaining

land

Plant Perm

it.




Plant Perm

it.


•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

•Covers: air, water, cultural, biological, botanical, visual, safety, other issues•A discretionary process with little influence by the developer•Can be very slow



Operation


tion

5 yr1 6 ~ 353 42

Seeking & Obtaining

land

Drilling Permit.

Exploration

drilling



•Interconnection studies; Interconnection agreement•Poor matching between grid and many geothermal resources•Construction of transmission line and substation – usually by the developer


•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


Seeking & Obtaining

landOperation


tion

5 yr1 6 ~ 353 42

Plant Perm

it.

Drilling Permit.

Exploration

drilling



Operation

•Operate the plant•Maximizing availability and minimizing O&M costs are critical to succeed





tion

5 yr1 6 ~ 353 42

Seeking & Obtaining

land

Plant Perm

it.

Drilling Permit.

Exploration

drilling



GeothermalfromGeo‐pressuredsystems

TechnologyExamples



Naturalgasproductionandelectricitygenerationfromgeo‐pressured‐geothermalaquifersisanunconventionalhydrocarbonsourcethathaslongbeenunproductiveduetoitsmarginaleconomicsandlackoftechnologicalcertainty.

Todaythatmaybechanging• Taxincentives• ClimateChange• RPS



BarrierstoGeo‐pressuredgeothermaldevelopment

Thereislittlepublishedinformationconcerningtemperaturegradient,bottom‐holetemperatureandheatflowintheGulfCoast,particularlyfrommodernwells.Thisdatacouldbecollectedandmadeavailable.

DOEfundedflowtestsonseveralwellsandtheygenerallywereabletosustainsizeableflowrates.OnlyPleasantBayouhadareallyextendedproductionhistory.Somequestionsthatweren'tansweredincludewhetherthereisarechargemechanism(Shookbelievedthattheremightbe)sothatthereservoirsactuallymightproducesignificantlymorefluidthanoriginalproductionestimates.Aproperlyinstrumentedflowtestmightanswerthisquestion.Thesecondquestionisthemechanismofrecharge.

methodsofdisposingofthespentproductionfluid.ThiswasamajorcostitemintheoriginalDOEprogramsinceitrequiredacostlyfluiddisposalwell.Withoutthat,economicsweremuchbetter.


Ormat– 40yearsoftechnicalinnovation

However


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

Ormat– 40yearsoftechnicalinnovation


CaseStudy‐ RMOTC

Rocky Mountain Oilfield Testing Center (RMOTC) being used for Ormat demonstration power plant


CaseStudy‐ RMOTC


CaseStudy‐ RMOTC

FlowRate: 40,000BWPD(1167gpm)

InletTemperature: 170°F

OutletTemperature: 152°F

AmbientTemperature: 50°F

GeneratorGrossPower: 180kW

NetPowerOutput: 132kW


CaseStudy‐ RMOTC

Rocky Mountain Oilfield Testing Center (RMOTC) being used for Ormat demonstration power plant


LowTemperatureResource

1979,ManleyHotSprings,AK 120ºFbrineinlettemperature,18gpm 39ºFcoolingwaterinlet,79gpm 2.0kWgrossoutput



CollaborativeR&DprojectwiththeBureauofReclamationandUTEP

70kWSolarPond

ORCPowerUnitatElPaso,Texas

Inoperationfrom1986to2002

temperaturesof154ºFto190ºF



250kWOECPowerPlantProvidesPower&Heatfrom210ºFGeothermalFluid


Co‐production,anewchallenge

Generatingpowerfromproducedwater Reducewellfieldoperatingcosts Eliminatefossilfuelconsumption Reducemaintenancecosts

Introduceemissionfreeenergyproduction

Potentialgreenenergytaxincentives


Co‐production,anewchallenge

Resourcechemistry,dependability

• Majorfactorisheatexchangerlifespan• FoulingandcorrosionwillreduceHEXlife• IncreasedO&Mcostswillreduceeconomicbenefits• Everyresourceisdifferent

Cooling

• Watercoolingrequirescoolingtower,constantmake‐upwater,andadditionalpumps

• Aircooling(drycooling)canbeutilizedanywhere


RecoveredEnergyGeneration(REG)

TheHiddenGreenResource


Turbine– Generatorset&Air‐cooledCondensers

OREG 1 – REG Project at NBPL CS 7 Galena – Geothermal plant

OneTechnology/DifferentApplications

Heat Exchangers –preheater and vaporizer set


REGTechnologyBenefits

Packagedmodularsystem– faston‐siteinstallation

Highturbineefficiencyatlowspeed• 1800RPM,60Hz,Operation

Reliableunattendedoperation,nosteamoperatorsrequired

LowOperationandMaintenanceCost

Notsusceptibletofreezing

Ruggeddesign• Outdoorinstallationtypical(eveninsevereclimates)


Accommodatingtofluctuatingloads

Fieldproventechnology

Environmentallyfriendly• Nofuelconsumption• Zeroemissions• Nowaterconsumption• Qualifiesas“GreenPower”inmanystatesand

environmentallypreferredpowerinsomeprovinces

Blackstartandislandmodecapability

Insignificantimpactongasturbinecompressoroperation




Ninestates‐Connecticut,Hawaii,Maine,Nevada,Pennsylvania,Colorado,NorthandSouthDakota,andWashingtonincludewasteheatrecoveryasaneligiblerenewableresource.

BecausenoadditionalfueliscombustedandRecoveredEnergyGenerationallowsfordistributedgeneration(DG),itoffersanumberofenvironmentalandeconomicbenefits,whichinclude:• Reducedemissionsofallairpollutants• Fewergreenhousegasemissions,suchascarbondioxide

(CO2)• Fewercriteriaairpollutants,includingnitrogenoxides

(NOX)andsulfurdioxide(SO2)

Reducedgridcongestionandavoideddistributionlosses Increasedreliabilityandpowerquality Loweroperatingcosts


Technology‐ Flexibleinstallation TheREGsystemallowsforsomelargedistancesbetweenthelocationoftheheatexchanger(Waste

HeatOilHeater)andtheOEC.

**

WHOH

Diverter

OEC

Gas Turbine Enclosure

Original Stack/Silencer


Technology‐ MinimuminterruptionProcessInterruptionlessthan48hours(CompressorStation)


ResourcePotential

Louisianacanandshouldbenefitfromwastewaterandwasteheat!

Geothermal=?• Additionalfeasibilityanalysisneeded

RecoveredEnergyGeneration=118.4MWe• Confirmedonexistingpipelinesandprocessingplants


Geothermal&RecoveredEnergyCapacity / Availability

Factor

Source: Competitive costs of California central station electricity generation technologies, California Energy Commission December 2007, and Ormat.

0.00

5.00

10.00

15.00

20.00

25.00

30.00

SolarThermal

Wind Hydro-SmallScale

IGCC (Coal) CC (Gas) REG Biomass AdvancedNuclear

Geothermal0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cost cent/kW/h Environmental Impact

Polluting Environmentally friendly


Summary

Ormatisdevelopingworldclassgeothermalpowerplants

Ormatiscommittedtosuccessfullyimplementinginnovativetechnologies

Geothermalpowerprojectsarecomplicated:• Significantrisk‐capitalrequiredforresource

development• Requireshighlevelofexpertiseinbothdevelopment

andO&M

Moreshouldbedonetoincentivizerenewablesinsomeemergingmarkets


Summary

Pioneeringlowtemperaturegeothermalfor30years

Co‐producedwater,agenerousresource• Challenge:Long‐termreliability

RMOTCOECExperiencegainedinoilfieldproduction

Geothermal/REG– Offerdomesticbaseloadrenewablesolutionstoclimatechangeandlegislativeobligations


Contact

PaulThomsen

ORMATTechnologies6225NeilRoad,Suite300Reno,NV89511Phone:775.356.9029E‐mail:[email protected]:www.ormat.com

geothermal development opportunitiesgeothermal complex, new zealand 2000 - 2007 125 mw upper mahiao...

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