Can the Geothermal Industry Overcome Challenges to Raising Capital?

By Jane Pater Salmon, Navigant Consulting Geothermal energy presents baseload clean energy at a lower cost than many other renewable energy alternatives. Despite this compelling value proposition, long development horizons and the risks associated with exploration and drilling activities present hurdles to developing the country's rich geothermal potential. Financing projects that use conventional geothermal technology remains challenging in the uncertain economic environment. In the past year, geothermal project developers used alternative strategies to overcome three common challenges to geothermal project finance. While the challenges for raising capital at the project level are consistent with those faced in...

Book Review: Investment Opportunities for a Low Carbon World (Geothermal + Efficiency)

Charles Morand Last Thursday, I reviewed two chapters from the recently published book "Investment Opportunities for a Low Carbon World"*. This post reviews two more.  Geothermal Energy Alexander Richter, Glitnir Bank (now Íslandsbanki) Geothermal is one of the most interesting forms of clean power generation there is. As noted by the author, the most convincing argument for geothermal electricity is the fact that it operates at capacity factors in the upper 90s. This makes it the only renewable technology suitable for baseload power with the exception of dam-based (i.e. large-scale) hydro. However, as...

Just Sold: Raser Technologies (RZ)

Raser Technologies (NYSE:RZ) did not get the hoped-for DOE loan guarantee.   The company still has good long term prospects, but the short term upside chances are much weaker, prompting me to sell in the hope of buying back in after a general market sell-off. Raser Technologies (NYSE:RZ) dropped from $2.10 to $1.95 on September 1st, prompting a regular reader to leave a comment asking me if it was time to sell on the original Raser article. (Because he's a regular, he knows my policy of preferring to answer questions posed as comments on the blog to email comments: At...

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,...

Clean Energy Stocks Shopping List: Landfill Gas and Geothermal

Stocks seem expensive now, but that may not last.  Here are two Landfill Gas stocks and three Geothermal stocks I'm hoping to buy if the market falters. Tom Konrad, Ph.D., CFA This article continues my Clean Energy Stocks Shopping List series.  So far I've brought you: Five clean transport stocks, I looked at why it makes sense to wait for better prices, Five Energy Efficiency stocks (always my favorite sector), and Five Electric Transmission Stocks. This article takes a look at two of the most economical clean electricity generation technologies, landfill gas and geothermal. Kilowatts from...

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....

Raser Technologies (RZ): A Bargain, or Just Cheap?

Tom Konrad, Ph.D., CFA Raser Technologies (NYSE:RZ) stock has fallen almost 50% since the company announce an offering of shares on June 30.  Although the round quickly filled, the stock continued falling, and it seems like a screaming deal.  Is it? On July 7, Raser Technologies sold $25.5M of stock and warrants in a secondary offering.  According to press reports, this amounted to 13% of Raser's stock, thereby valuing the company at (very approximately) $200M, or $175M pre-money.   The units, each consisting of 1 share and 1/2 a warrant exercisable at $4.62 was offered at $2.98. ...

$3 Billion For Cleantech & Alt Energy

Charles Morand The DOE made public earlier today the amount of money that will awarded to clean power projects in lieu of the usual tax breaks: $3 billion. This will allow project proponents to receive a direct cash grant now instead of a Production Tax Credit or an Investment Tax Credit later on. The guidance document notes the following: "Section 1603 of the Act’s tax title, the American Recovery and Reinvestment Tax Act, appropriates funds for payments to persons who place in service specified energy property during 2009 or 2010 or after 2010 if construction began...

Ormat Technologies: Shame About the Price

Tom Konrad CFA 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 Last Wednesday, Ormat Technologies (NYSE:ORA) reported a great quarter, beating analyst expectations for both earnings and revenues. Investors loved it: ORA was up 8% on the day to $20.69, and are up 14% at $21.85 as I write. I’m a big fan of geothermal power, and would love to own Ormat at the right...

Is Ormat Technologies Misunderstood?

by Debra Fiakas CFA Olkaria III Geothermal Power Plant, Kenya Shares of geothermal power developer and utility Ormat Technologies (ORA:  NYSE) are trading at 24.7 times the consensus estimate for 2013.  That seems pricey on the surface, but the stock is down from a 52-week high of $22.24.  The stock gaps up and down with regularity, suggesting ORA is a battle ground for bulls and bears.  The fact that the 50-day moving average price continues to descend toward the longer-term 200-day average, hints that maybe the bears are...

Ten Alternative Energy Speculations for 2008: Geothermal, Wind and Wave, and Thin Film Hype

This article is a continuation of my Ten Alternative Energy Speculations for 2008, with picks #8, 9, and10 published last Thursday.  If you haven't already, please read the introduction to that article before buying any of the stock picks that follow.  These companies are likely to be highly volatile, and large positions are not appropriate for many investors.   My least risky picks are part of that same article linked to above; the moderately risky picks are here.  This article contains the most speculative three picks. #3 Nevada Geothermal Power (OTCBB:NGLPF or Toronto:NGP.V) US$1.29 or CAD$1.26 Geothermal first started catching...

Ormat Technologies, Inc. Completes Well Re-drilling at Puna Geothermal Project in Hawaii

Ormat Technologies (ORA) announced that Ormat subsidiary, Puna Geothermal Venture ("PGV"), completed the re-drilling of an existing production well at the Puna Geothermal Project (the "Puna Project") located on the Big Island, Hawaii. The well re-drilling increased net generating capacity of the power plant by approximately 4 MW, bringing total net generating capacity to approximately 29 MW.

Ormat Technologies Secures $25 Million Contract for Geothermal Power Plant in the Azores Islands

Ormat Technologies (ORA) announced that two of its subsidiaries have entered into Supply and Engineering Procurement contracts for a new geothermal power plant to be constructed on Sao Miguel Island in the Azores. The contracts are for a total of 19,151,422 Euro (approximately $25 million), with construction on the power plant expected to be completed within 19 months from the contract date.

Outlook for Geothermal Energy Stocks in 2011

Tom Konrad CFA My take-aways from the GEA Finance Forum After a long time lost in the proverbial desert of high capital costs and few financiers willing to step up, a number of geothermal companies made breakthroughs last fall.  The Department of Energy (DOE) loan guarantees for geothermal power development began to come through, and financiers were beginning to step up.  Nevada Geothermal Power (NGLPF.OB) announced a deal with Ormat (ORA) in which Ormat will earn a share of Nevada Geothermal's Crump Geyser property by paying for and financing most of the development costs,...

Three Top Geothermal E&P Companies

Tom Konrad CFA Last week, I was on a panel at the Inside Commodities Conference, and spent some time talking with Tyler Mordy, director of research at Hahn Investment.  He's a top-down analyst (and CFA Charter holder) who had recently grown enthusiastic about Alternative Energy in general because the sector is so beaten down.  We agreed that the most-beaten down sector of alternative is geothermal power stocks, which Tyler finds frustrating because Hahn works with managed ETF portfolios, and there simply is no geothermal ETF.  Nor is there likely to be, since one publicly traded company...

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...