Ormat Technologies, Inc. - Elko County€¦ · Desert Peak II Geothermal Power Plant, Nevada rely...
Transcript of Ormat Technologies, Inc. - Elko County€¦ · Desert Peak II Geothermal Power Plant, Nevada rely...
Desert Peak II Geothermal Power Plant, Nevada
GREEN ENERGY you can rely on
Ormat Technologies, Inc.
Tuscarora Geothermal Project
Elko County Commission
1.05.11
www.ormat.com
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COPYRIGHT © 2010 ORMAT. All rights reserved. This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited
Ormat at a Glance
Vertically integrated renewable energy company
• With more than 40 years of success
• Ormat Technologies, Inc. NYSE (ORA) listed
• Headquartered in northern Nevada since 1984
• Ormat is a U.S. company and global manufacturer
Geothermal and recovered energy power plants
• Approx 9 power plants in Nevada in operation
• Approx 420 MW owned and operated in the United States
• Approx 1,300 MW of installed capacity worldwide
Flexible business model in the energy industry
• The company designs, manufactures, develops, builds, owns and operates
geothermal and recovered energy based power plants in the United States and
other countries
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Global Geothermal Installed Capacity & Potential (MW)
10.7 GW18.5 GW
70 GW
140 GW
Installed
2010
Forecast for
2015
Potent ial
with Today 's
Technology
Potent ial
with
Technology
Improvement
Areas with Potential Geothermal Resources
Global Installed Capacity 2010 (MW)
Forecast Capacity for 2015 (MW)
Estimated Potential with present technology for year 2050
Estimated Potential with EGS for year 2050
Source: "Geothermal Power Generation in the World 2005–2010 Update Report" Ruggero Bertani Enel Green Power, via Dalmazia 15 – 00198 Roma (Italy) April 2010.
3,100 5,420
1,470 2,240
175 575
1,060 1,515
575 800
3,660 6,600
685 1,355
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60 MW Mokai Combined
Geothermal Plant, New Zealand
125 MW Upper Mahiao Combined
Geothermal Plant, Philippines
57 MW Ormesa Geothermal
Power Complex, California
85 MW Steamboat Geothermal
Power Complex, Nevada
1994, 1998
92 MW Heber Geothermal Power
Complex, California
30 MW Puna Combined
Geothermal Plant, Hawaii
1,300 MW of Deployed Technology Worldwide
Ormat ORC Technology
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Technology
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Technology Benefits
Cost Effective
• Provides long-term fixed power price
• Reduces price volatility
Sustainable & Environmentally Friendly
• Projects operating for 20 years at 95% capacity
• Closed loop system with near zero emissions
• No water consumption
Minimal Surface Use
• Plant site = 5 acres
• Well pads = 2 acres w/ rig (300ft x 300ft)
Field Proven
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Ormat in Nevada
For 40 years Ormat has been committed to working within and
utilizing the local trades of the communities in which it operates
Ormat has received the Presidents “E” Certificate for Exports in
recognition of Ormat's outstanding contribution to the Export
Expansion Program of the United States of America
Ormat was recognized by Nevada Governor, Kenny Guinn, as the
Distinguished Business of the Year
• The award is presented annually to companies exemplifying good corporate
citizenship and recognizes the important role it plays in contributing to the
economic strength of the business community in northern Nevada
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Tuscarora Geothermal Project
Elko County, Nevada
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Project History
In 2004, Earth Power Resources worked with the U.S. Department of
Energy‟s GRED III program to develop a geothermal facility at Tuscarora.
By 2006 Earth Power Resources had been unable to financially justify the
project.
In 2006, the project was sold to a company called TG Power. TG Power
drilled and flow tested a production well in the summer of 2007. The well
was partially successful, but following the summer drilling program, TG
Power was unable to prove commercial viability and the company ran out
of financing by mid-2008.
In 2008, they sold their share of the project to Energy Investor‟s Fund.
The company began permitting through its subsidiary HSS II, LLC, but
determined the liability of the existing PPA and determined selling the
project was the best option.
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Project History (continued)
In 2009, the Nevada Legislature enacted Assembly Bill 522 providing tax
incentives for renewable projects.
In 2010, due to the passage of AB 522, Ormat was able to reach a deal to
acquire the project with the expectation of being able to realize a reduced
tax burden.
In February 2010, Ormat took over the existing PPA as a result of the
acquisition deal with Energy Investors fund and signed a revised PPA
with NV Energy.
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Proposed Project
Ormat wants to develop Phase 1 of a geothermal power plant 40 miles
north of Elko in the Northern Independence Valley, 11 miles north of
Tuscarora.
Ormat currently leases approximately 3,300 acres of private land from
Ellison Ranching. Ormat also has four BLM parcels approximately
7,000 acres. Phase 1 will be entirely on private land.
The project steps include drilling and installation of an Ormat Energy
Converter (OEC) that will produce energy from hydrothermal
reservoirs.
The project will be a state-of-the-art facility utilizing Ormat‟s
innovative air cooling technology.
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Request
Granting Ormat‟s abatement request will:
• Allow Ormat to develop this project
History shows that previous developers have had difficulty
completing this project.
While Ormat‟s expertise and technology put it in a stronger
position than other developers, Ormat is requesting County
approval for a property tax abatement to make the project
economically viable.
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Chapter 701A
NRS 701A.360 provides that the Nevada Energy Commissioner “shall approve” applications that meet certain requirements (NRS 701A.365) including:
• 50 or more construction employees, at least 30% of whom are residents of Nevada, at 150% of the average wage as determined by DETR
• Operations and maintenance employees must be paid at least 110% of state average hourly wage
• Must provide health plan for employees that offers dependent coverage
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New Statute Limits Conditions
However, Commissioner “shall not” approve an abatement of
property taxes without approval of the county (subsection 2 of
NRS 701A.365)
• County “must not” condition the approval on a
requirement that the facility agree to purchase on behalf of
the county any infrastructure, equipment, facilities or other
property that is not directly related to the construction and
operation of the facility
• We are willing to work with Elko County on similar „directly
related‟ infrastructure
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Amount Of Abatements
Current property owner pays $30,000 in property tax
If partial abatements are granted, Ormat would pay:
• $213,652 on average in Property Tax annually for 20
years
The abatements may be terminated if Ormat fails to
meet the eligibility requirements
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Employment Impact
The project will create the following jobs in Elko County:
• Construction and Drilling: 280 employees
• Operating and Maintenance: 7 full-time employees
• E.Nevada geothermal control center: 9 full-time employees
> 30% will be Nevada residents (95% on typical Ormat project)
Ormat will pay > 150% of the average hourly statewide rate
Health insurance benefits will be offered to the construction employees and O&M employees and their dependents
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Elko County Impact
The 16 MW Tuscarora facility will contribute to:
• Reduction in unemployment benefits
• 16 full-time positions with benefits ($10 million over
20 years)
• Reduction in uninsured individuals
• Increase in sales tax on taxable items
• Establishing the geothermal industry in Elko County
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Elko County Impact
A typical 16 MW power plant has an approximate local impact of $300,000
per year in Nevada
$300,000 x 20 years = $6 million impact to local vendors
Local Vendors already used include:
• Boss Tanks Inc., Elko
• Gateway RV Center, Elko
• Snyder Mechanical, Elko
• JBR Environmental Consultants, Elko
• Elko Wire Rope & Mining Supply, Elko
• Great Basin Ecology, Inc., Elko
• Chilton Engineering & Surveying Ltd., Elko
• Big O Tires, Elko
• Elko Tool and Fastener, Inc., Elko
• Newmont USA Ltd., Elko
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Financial Impact
The 16 MW Tuscarora facility would likely provide:
• Sales & Use Tax 1,200,000
• Net Proceeds of Mines Tax 210,000
• Modified Business Tax 72,000
• Local Vendor Impact 6,000,000
• Full-time Employment 22,800,000
Net Contribution to State and County 32,982,000
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Indirect Financial Impact
By providing an abatement to the Tuscarora facility in Elko County creates:
• A world-class geothermal facility
• Additional capital investment
• Additional employment
• A more stable electrical market
• Greater energy independence
• A model of success and collaboration which encourages additional development in the County
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COPYRIGHT © 2010 ORMAT. All rights reserved. This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited
Summary
Ormat is developing world-class geothermal power plants in Nevada
Ormat is committed to successfully implementing innovative technologies
Ormat needs Elko County‟s support as it relates to property tax that will enable the development of the Tuscarora geothermal project
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Ormat’s Local Contact Information
Paul A. Thomsen
Director of Policy and Business Development
6225 Neil Road
Reno, Nevada 89511
775.356.9029 Office
775.313.6569 Cell
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