US Geothermal Fizzles

by Debra Fiakas CFA Geothermal power generator US Geothermal (HTM:  NYSE) came up short in reporting financial results for the first quarter ending 2017  -  at least from the perspective of the four analysts with published sales and earnings expectations for the company.  Operating revenue of $8.4 million slipped slightly from the same period a year ago, but produced slightly lower net income of $1.1 million.  The company’s share was $260,000 or a penny per share.  Not good enough say the analyst’s who were collectively looking for two pennies per share in earnings! Missing earnings expectations has...

Alterra Power: Deep Geothermal

by Debra Fiakas CFA Last week, one of the leaders in a development consortium, Iceland’s largest privately owned energy generator HS Orka hf, announced the completion of a project to prove the merits of deeper geothermal wells.  The project in the Reykjanes Peninsula in southern Iceland reached 4,659 meters depth in January 2017, where temperatures measured 427 degrees Centigrade and fluid pressure was 340 bars.  By all accounts the project was successful, suggesting that deep wells could a cost effective approach to geothermal energy. The drilling program was mentioned in early December 2015 a recent post “Hot...

US Geothermal: Can A Reverse Split Heat Up This Stock?

by Debra Fiakas CFA US Geothermal (HTM:  NYSE) has been on our radar for some time.  Despite considerable accomplishment in terms of building electricity output from a portfolio of geothermal power installations, investors seem reluctant to embrace the company and its stock.  Earlier this week, US Geothermal management issued its usual quarterly update on its development work, this time detailing progress in expanding capacity and improving well performance on three of its geothermal installations.  Altogether an incremental 90 megawatts are under development, which would triple the current power generation capacity of 45 megawatts.  The company press release was...

Ormat Eyeing Storage M&A for Geothermal Projects

Jennifer Delony Reno, Nev.-based Ormat Technologies (ORA) is seeking mergers and acquisitions that will help the company enhance its geothermal projects with energy storage technologies, Ormat CEO Isaac Angel said on Nov. 4. “On the storage solutions side, we are progressing well,” Angle said during a 3Q15 earnings webcast. “I’m very optimistic that we will be able to add a lot of MW … and profitability to our existing power plants.” Angle said that he also is optimistic that the company will secure a deal soon that will initiate Ormat’s energy storage strategy. “We’re almost there,” he said....

US Geothermal: Wringing Profits From Hot Rocks

by Debra Fiakas CFA Last week I spent the better part of a day listening to presentations of energy companies at the Wall Street Analyst Forum in New York.  Although I had heard the management of  US Geothermal (HTM: NYSE) tell the company’s story before, I was impressed to hear about the progress the company has made in squeezing profits from electricity produced with turbines run by underground steam.  Management called it gratifying! The company reported $31 million in sales in the year 2014, delivering $14.9 million in net income to the bottom line.  That is something...

Ormat: A Bargain Green Stock?

by Debra Fiakas CFA Everybody likes a bargain.  Investors really like a good cheap buy.  A review of our four alternative energy industries revealed several stocks trading below industry average multiples of forecasted earnings.   Tracking the geothermal power generators has frequently taken us to the door of Ormat Technologies, Inc. (ORA:  NYSE).  Ormat has two revenue segments:  power generation through geothermal generators and energy recovery and equipment sales to utility and industrial customers installing geothermal power plants.  The company owns and operates plants with 626 megawatts generating power and has supplied equipment around the world for another...

Geothermal Should Ride The Duck Curve

Meg Cichon As the geothermal industry limps along year after year, a utility insider strongly suggests that it changes its tactics. For years the geothermal industry has relentlessly boasted that it is a baseload resource, meaning it provides stable power similar to a coal or natural gas plant, except without all of those pesky carbon emissions. While upfront costs to develop a plant are higher than other renewable sources, geothermal leaders say that this baseload aspect makes it a more attractive resource in the long run since the grid needs more stable power as increasing amounts of...

US Geothermal: Egregiously Undervalued?

by Debra Fiakas CFA Last week US Geothermal (HTM:  AMEX), a power generator from geothermal projects in California, Oregon, Nevada and Idaho, made an appearance at the Marcum Microcap Conference in New York City.  The company stood out among most of the companies appearing in Marcum’s so-called ‘energy track’ as one of the few with solid revenue and profits.  US Geothermal reported a net profit of $1.9 million on $28.8 million in total sales in the twelve months ending March 2014.  The net profit is commendable, but what I find more interesting is the conversion of 30%...

How Geothermal Heat Pumps Can Soar Like Solar

Tom Konrad CFA Geothermal Heat Pumps (GHP) are a niche market.  They shouldn’t be. Disclosure: Long WFIFF, short LXU puts (a net long position.) A Better Mousetrap? Ralph Waldo Emerson never said “Build a better mousetrap, and the world will beat a path to your door.”  The mousetrap that likely inspired the misquote was invented seven years after his death.  Unfortunately, many people take it literally.  GHPs have all the hallmarks of a better mousetrap: They do the job of heating and cooling a building more efficiently than any other option.  Despite...

Holiday Shopping Deal On Ram Power Shares

Tom Konrad CFA Holders of Ram Power Corp. (TSX:RPG, OTC:RAMPF) on November 26 (the “record date”) will be receiving valuable coupons as the result of the company’s rights offering, announced November 18th. Just in time for the holidays, these coupons, or “rights” can be used to buy additional shares of Ram Power for 8¢ Canadian per share any time before  5pm on December 23rd. (Disclosure: I am long Ram Power stock.) Holiday shoppers looking for more traditional gifts will be able to raise a little cash by selling the rights on the Toronto Stock Exchange,...

US Geothermal: A Knack For Hot Rocks

by Debra Fiakas CFA U.S. Geothermal (HTM:  AMEX) is scheduled to report third quarter 2013 financial results on November 15th, taking every day allowed to a public company to reveal the fruits and labors of a quarter.  There will be plenty to talk about in the conference call with analysts and investors.  USG closed a loan financing to support the first phase of its San Emidio geothermal power project in Nevada.  The loan valued at $30.7 million bears a fixed interest burden of 6.75% will replace a $25 million construction loan for the project and supply working capital...

Ormat: Cash Generation Justifies Earnings Multiple

Ormat Heat exchanger at GKW Landau. Geothermal water evaporates the carrier medium. Preheater and the evaporator. The steam line above connects to the turbine. Photo by Claus Ableiter via Wikimedia Commons by Debra Fiakas CFA Shares of geothermal power producer Ormat Technologies (ORA:  NYSE) are trading at 29.2 times the 2014 consensus estimate of $0.93 per share.  That multiple looks fair compared to growth expected at Ormat in the next year, but more dear against the company’s long-term growth prospects.  The stock has been flying off...

Is Fracking for Enhanced Geothermal Systems the Same as Fracking for Natural Gas?

Meg Cichon Advocates for both natural gas and geothermal are up in arms over whether fracking for enhanced geothermal systems should be scrutinized with the same parameters as natural gas. Ormat sucessfully used EGS technology to increase the capacity of its Desert Peak 2 plant in Nevada by 1.2MW. Photo Source: Ormat The U.S. geothermal industry recently scored a big win when its first enhanced geothermal system (EGS) project went online in April. ORMAT (NYSE:ORA) was able to stimulate a previously unproductive well at its Desert Peak project with EGS...

Ormat’s Enhanced Geothermal Project Now On Line

Meg Cichon   Ormat's 21.8 megawatt Desert Peak 2 plant in Nevada. Photo Source: Ormat A major challenge for the geothermal industry is reducing the risk of its exploration and drilling phase – there is a 40-60 percent chance that each $5-7 million well is ultimately deemed unproductive. But that statistic may soon change. In what many in the industry are calling a game-changer, the nation's first enhanced geothermal system (EGS) to supply electricity to the grid came online last week. ORMAT's Desert Peak 2 project is producing an...

Dispatchable Geothermal Plant May Shape Future Deals

Meg Cichon A fully dispatchable geothermal plant in Hawaii may influence power contracts in states like California that have a significant amount of energy but dwindling capacity with intermittent renewables. The geothermal industry has been struggling with the same barriers to development for years. It's a frustrating situation: while geothermal is a reliable, steady baseload form of renewable energy, its development expenses overshadow its obvious long-term benefits. Meanwhile, other intermittent renewable sources such as wind and solar are able to take advantage – and control – of state renewable portfolio standard (RPS) policies...

Last-Minute PTC Revision Sparks New Hope for Geothermal Stocks

Meg Cichon Geothermal well photo via Bigstock The renewable energy industry had quite a bit to celebrate this week as 2013 rang in a PTC extension that many had feared would never come to fruition. Though the extension to January 1, 2014 greatly benefits the wind industry, whose PTC was set to expire at the end of 2012, it also included a provision that could be huge for geothermal development. This provision states that projects under construction by January 1, 2014 would quality for the PTC, rather...