Geothermal Energy Potential and Biofuel Energy Potential...

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GREEN ENERGY you can rely on COPYRIGHT © 2011 ORMAT. All rights reserved. This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited. COPYRIGHT © 2011 ORMAT. All rights reserved. This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited. Briefing and Policy Dialogue On Geothermal Energy Potential and Biofuel Energy Potential To Help Meet HCEI Renewable Energy Goals Hawaii State Capitol Building, Room 225 March 30, 2011 9 a.m. to noon

Transcript of Geothermal Energy Potential and Biofuel Energy Potential...

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GREEN ENERGY you can rely onCOPYRIGHT © 2011 ORMAT. All rights reserved. This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited. COPYRIGHT © 2011 ORMAT. All rights reserved. This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited.

Briefing and Policy Dialogue OnGeothermal Energy Potential and Biofuel Energy Potential To Help Meet HCEI Renewable Energy Goals

Hawaii State Capitol Building, Room 225March 30, 20119 a.m. to noon

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DisclaimerStatements 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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Ormat Technologies, Inc. Only vertically integrated company in the geothermal and recovered

energy power business Designs, develops, owns and operates geothermal and recovered

energy-based power plants around the world Designs, manufactures and sells geothermal and recovered energy

power plants Resource, development and drilling (6 rigs) Over four decades of experience Engineered and built power plants totaling over 1,370 MW of which

50% are owned and operated by Ormat Current portfolio includes Puna Geothermal Venture, Brady Complex,

North Brawley, Heber Complex, Mammoth Complex, Ormesa Complex, Jersey Valley, Steamboat Complex, OREG 1, OREG 2, OREG 3 and OREG 4 as well as Zunil Amatitlan (Guatemala), Olkaria III Complex (Kenya) and Momotombo (Nicaragua)

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Hawai„i History

1881: King Kalakaua asks friend, Thomas Edison, to find way to harness volcano‟s energy

1961–1962: First geothermal wells drilled in Kapoho by Richard Lyman

1981–1989: HGP-A 3 MW geothermal facility proves viability; but with drawback of H2S release and noise

1993: First commercial geothermal power plant startup located in Puna for reinjection of brine and H2S• Noise abatement

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How it Works…

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Geothermal Benefits

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Clean Sustainable Local Indigenous Reduces

usage of fossil fuels

Renewable

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Air-cooled: No water consumption

100% fluids re-injected into Earth‟s interior

Uses no fossil fuels, emits no greenhouse gases

Near-zero emissions Recent upgrades

further reduce noise

Clean and Renewable

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Puna Geothermal Venture Site

Online in 1993

Today: 6 production wells4 injection wells

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Economic Contributions 30 full-time employees Numerous routine & seasonal contractors Royalty payments to the State, County & OHA >$2M annually

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Expenditures from the Geothermal Relocation and Community Benefits Fund 2007-2010

Two 33-passenger buses were purchased to increase the number of buses serving the Puna makai area • Stops in subdivisions not before serviced, like Leilani

Estates, were added

Two bus driving positions Four street lights on Hawaiian Beaches One street light at Post Office Road closer to

Highway 130 Four street lights from Nanawale Subdivision

to Pāhoa School Three lifeguard pool positions and one swim

instructor

Funded the completion of the Pāhoa skate board park for the kids in the area

Fenced the Pāhoa skate board park Playground set for Hawaiian Beach Park Playground set next to Pāhoa Skate park Security Guards stationed at the Pāhoa

Neighborhood Facility providing additional after-hours security in Pāhoa

Security Guards stationed at Pohoiki Beach Park

Lifeguard and lifeguard stand at Pohoiki to improve the family experience

District 5 council office 2008-2009

In the pipeline: Steam vents purchase

Heating system for the Pāhoa poolLighting at the Pāhoa pool for night swimming

Expanding services to the Pāhoa Transfer Station

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PGV Update

Aerial of PGV - near Pahoa

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30 MW contract with HELCO through 2027

~20% of Big Island electrical use

Displaces ~144,000 barrels of oil annually

Permits to increase generation up to 60 MW

Construction of new unit completed, delinking the 5 MW from fuel oil pricing

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8 MW Expansion 25 MW contract remains as is 5 MW contract at fixed price of

11.8 cents per kwhr. ~39% lower than current pricing

8 MW contract at fixed price of 9 cents per kwhr. ~54% lower than current pricing

Dispatchable energy, remotely and automatically controlled by HELCO System Operator

Optimizes geothermal resource, brine not previously used will generate the additional power

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Geothermal Resources

The state* has identified seven areas on Maui and Hawai„i Islands

that might work for geothermal power generation

*GeothermEx, Inc. 2005

Kilauea East Rift Zone -PROVEN RESOURCE

Kilauea SW Rift Zone

Hualalai

Mauna Loa SW Rift Zone

Haleakala East Rift Zone

Haleakala SW Rift Zone

Mauna Loa NE Rift Zone

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Ulupalakua Ranch, Maui Outreach is the first step in

any new exploration – the community, public officials and other stakeholders will be informed and consulted every step of the way

Dain Kane is our Outreach Coordinator

Charles Maxwell, Sr is our Cultural Expert

Munekiyo & Hiraga is our permitting advisor

Lease of ~8,000 acres of surface access rights from Ulupalakua Ranch

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US Dept of Energy Award Geothermal Technologies Program award funded by

American Recovery and Reinvestment Act Goal is to demonstrate use of innovative technologies in

reducing risk of geothermal exploration well siting Build 3-D model of subsurface at Ulupalakua Ranch using

innovative technologies based on model of subsurface at Puna

Partner with Lawrence Berkeley National Lab and UC Santa Cruz

DOE provides ~$4.9M and Ormat matches at ~50% Funds model building, 2 exploration wells, and testing

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We will use a combination of traditional geophysical and geochemical tools with exploration suites not typically used in geothermal exploration• These techniques will be assessed

first at Ormat‟s Puna geothermal field – a „known‟ system

• The exploration suites will then be applied at Ulupalakua Ranch (a private lease on Maui); a site of similar, but older volcanism to Kilauea/Puna

Objectives

Puna, Hawai’i

Ulupalakua, Maui

Plan of Exploration

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Next Steps Continue exploration and outreach Apply to Dept of Land and Natural Resources for

geothermal leases and expanded geothermal resource subzone (GRS):• “mining” (geothermal) lease covering subsurface of Ulupalakua

Ranch lands (non-competitive)• “mining” (geothermal) lease covering surface and subsurface of

State parcel (competitive bid)• GRS expansion covers Ranch lands and State parcel• GRS does not extend into Conservation District• Single EIS supports both lease and zoning applications

Maui County adopts geothermal resource permit (GRP) processing rules, allows County to issue permits for geothermal exploration and production wells

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Next Steps Ormat selects 2-6 exploration well sites

• Apply to County for GRP• Additional EA/EIS focused on exploration wells

Test wells for commercial temperature and flow If commercial resource found, possibly:

• Drill one or more additional wells to support commercial production

• Additional EIS focused on power plant/commercial use• Construct power plant

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Typical Geothermal Project Development Process

Assess potential resource development sitesSecure lease agreements for new sitesApply for and obtain geothermal subzone designation from State

Preparing Development

Inventory

Exploration Activity

Regulatory Requirements Finance

Assess findings and share with lawmakers, officials, general public Plan field investments and developmentConduct community outreach throughoutCarry out preliminary exploration using new non-intrusive measures

Address all state/county/ federal regulatory requirementsConduct Environmental Assessment or Environmental Impact Statement, as requiredNegotiate independent Power Purchase Agreement with utility

Anticipated costs and investorsAnticipated timeline for return on investment

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Pre-Drilling Exploration

Drilling Permits

Exploration Drilling

Field Development

Equipment Manufacturing

(EPC)

Start up Operation

Permitting

Signing PPA

3 years 2 years

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Mahalo!

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