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

Transcription

1 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, a.m. to noon

2 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 We will not update these forward-looking statements, even though our situation will change in the future. 2

3 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) 3

4 Hawai i History 1881: King Kalakaua asks friend, Thomas Edison, to find way to harness volcano s energy : First geothermal wells drilled in Kapoho by Richard Lyman : HGP-A 3 MW geothermal facility proves viability; but with drawback of H 2 S release and noise 1993: First commercial geothermal power plant startup located in Puna for reinjection of brine and H 2 S Noise abatement 4

5 How it Works 5

6 Geothermal Benefits Clean Sustainable Local Indigenous Reduces usage of fossil fuels Renewable 6

7 Clean and Renewable Air-cooled: No water consumption 100% fluids reinjected into Earth s interior Uses no fossil fuels, emits no greenhouse gases Near-zero emissions Recent upgrades further reduce noise 7

8 Puna Geothermal Venture Site Online in 1993 Today: 6 production wells 4 injection wells 8

9 Economic Contributions 30 full-time employees Numerous routine & seasonal contractors Royalty payments to the State, County & OHA >$2M annually 9

10 Expenditures from the Geothermal Relocation and Community Benefits Fund 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 In the pipeline: Steam vents purchase Heating system for the Pāhoa pool Lighting at the Pāhoa pool for night swimming Expanding services to the Pāhoa Transfer Station 10

11 PGV Update 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 Aerial of PGV - near Pahoa 11

12 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 12

13 Geothermal Resources The state* has identified seven areas on Maui and Hawai i Islands that might work for geothermal power generation Haleakala East Rift Zone Haleakala SW Rift Zone Mauna Loa NE Rift Zone *GeothermEx, Inc Hualalai Kilauea East Rift Zone - PROVEN RESOURCE Kilauea SW Rift Zone Mauna Loa SW Rift Zone 13

14 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 14

15 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 15

16 Plan of Exploration Objectives 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 Puna, Hawai i Ulupalakua, Maui 16

17 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 17

18 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 18

19 Typical Geothermal Project Development Process Permitting Signing PPA Pre-Drilling Exploration Drilling Permits Exploration Drilling Field Development Equipment Manufacturing (EPC) Start up Operation 3 years 2 years Preparing Development Inventory Exploration Activity Regulatory Requirements Finance Assess potential resource development sites Secure lease agreements for new sites Apply for and obtain geothermal subzone designation from State Assess findings and share with lawmakers, officials, general public Plan field investments and development Conduct community outreach throughout Carry out preliminary exploration using new non-intrusive measures Address all state/county/ federal regulatory requirements Conduct Environmental Assessment or Environmental Impact Statement, as required Negotiate independent Power Purchase Agreement with utility Anticipated costs and investors Anticipated timeline for return on investment 19

20 Mahalo! 20