Blindsided with Advance Warning
Holders of Ormat Technologies (ORA: NYSE) shares may feel somewhat blindsided by the cessation of operations at the Puna geothermal power plant on the Hawaii Island. Lava flowing from neighboring Kilauea volcano has overrun two of the geothermal wells as well as a warehouse and an electricity substation.
Shareholders cannot claim they were not forewarned. Ormat’s annual report for 2017 mentions the risk of volcanic eruptions seventeen times. However, since no geothermal power company has ever experienced an interruption in operations due to a volcanic eruption, investors most likely overlooked the real dangers of locating a business on top of geological ‘hot spot.’
https://upload.wikimedia.org/wikipedia/commons/3/3a/Hawaii_Mount_Kilauea%27s_eruption_opens_new_lava_vent.webm
Ormat is not the...
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...
Ormat Technologies, Inc. Completed Negotiation of Two New Power Purchase Agreements at Ormesa and...
Ormat Technologies (ORA) announced that it completed negotiations for two new 25 years Power Purchase Agreements (PPA) with Southern California Public Power Authority (SCPPA) for the purchase of renewable energy from its geothermal projects at the Ormesa Geothermal Facilities Complex and the Heber Geothermal Facilities Complex. Ormat also announced that it celebrated the ground breaking and dedication of a new geothermal power plant within the Heber Geothermal Facilities Complex on Monday May 2, 2005. The new plant is dedicated to Mr. William R. Gould, who served as the Chairman of Southern California Edison (SCE) from 1980 through 1984,...
Calpine Gets Hammered
Shares of Calpine Corp. (CPN) suffered a greater than 20% loss yesterday and is now down almost another 13% today. All of this was caused by a court ruling stating that they will be unable to use the $395 million in cash they received from the sale of oil and gas fields earlier this year for the purpose of buying natural gas to run its power plants. The dispute stems from the Bank of New York's decision in September when, acting as trustee for Calpine bondholders, it withheld proceeds from Calpine's sale in July of North...
Must Renewable Energy Be Diversified?
Dana Blankenhorn Most renewable energy companies specialize. Solar companies do solar. Wind companies do wind. Geothermal companies do geothermal. Biomass companies do biomass. But a small Canadian merger challenges that assumption. Magma Energy (MGMXF.PK), a geothermal company, said it will spend about $100 million in stock to buy Plutonic Power (PUOPF.PK), which has wind and hydropower projects, and ambitions to get into solar. The combined companies will go by the name Alterra Power. Both companies are based in Vancouver. Size really does matter, crowed Magma CEO Ross Beatty on a conference call announcing...
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...
The Efficiency Tango: A Deeper Look at Geothermal Heat Pump Efficiency
Tom Konrad CFA Geothermal heat pump diagram via Bigstock A couple weeks ago, I compared the efficiency of the two most advanced geothermal heat pumps (GHPs) recently launched by Waterfurnace Renewable Energy (TSX:WFI, OTC:WFIFF) and Climatemaster, as division of LSB Industries (NYSE:LXU). Like most things in life, it turns out that heat pump efficiency is a lot more complicated than just comparing a couple numbers. Since I concluded that Waterfurnace’s 7 Series heat pumps were slightly more efficient than Climatemaster’s Trilogy 40 pumps, one of Climatemaster’s district managers pointed me...
Drill for Geothermal Power in Developing Countries and on King Street
Tom Konrad CFA Hezy Ram Geothermal industry veteran Hezy Ram has worked in the industry for over three decades. His career began with 28 years of experience at Ormat (ORA), where he was Executive Vice President of Business Development, after which he founded Ram Power Corp. (RPG.TO/RAMPF.PK) in 2009. In February, he resigned as CEO of Ram Power shortly after the company warned of significant delays and cost overruns at a key Nicaraguan project, a move he says was motivated by irreconcilable differences with other board members and major shareholders regarding the company's strategy. Today,...
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...
Newsweek Special Report
"Experts generally agree that our current reliance on fossil fuels is unsustainable. Already oil is near $50 per barrel, and the great millions of Chinese and Indians destined to take to the road in the next decades have not yet gotten behind the wheel." This week Newsweek has written several special reports about alternative energy in all its forms. All of these reports can be found at the following link.
Tax Credit to be Extended to Geothermal Energy
The Production Tax Credit (PTC) a critical factor in stimulating the growth of the US wind industry is very likely to be expanded to include geothermal energy as part of the JOBS tax package (H.R. 4520, the "American Jobs Creation Act of 2004") just approved by a Congressional Conference Committee.
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 dominates the industry (Ormat Technologies...
Ormat Technologies (ORA): The 500-Pound Gorilla of Geothermal Power
Tom Konrad, CFA Ormat is the 500-pound gorilla of the geothermal power industry. Should you buy the stock? I've owned Ormat Technologies (NYSE:ORA) stock off and on since I first began to invest seriously in clean energy companies. At one of the first renewable energy conferences I attended five years ago as part of my quest to understand the renewable energy investing landscape, I encountered a representative of the Geothermal Energy Association (GEA). Here's how I recall our conversation: Me: "What are a few of the leading geothermal power companies?" GEA Rep: "Ormat." Me: "Are they...
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.
Geothermal: The Other Base Load Power
Last Thursday and Friday I attended the Geopowering the West Investors' Forum in Montrose, CO (hosted by the Delta-Montrose Electric Association, Colorado's most progressive Rural Electric Cooperative.) I've long been interested in geothermal stocks, and I first started adding them to managed portfolios in 2003. As a whole, those stocks have more than doubled in the 1-4 years since they were purchased. Fundamental Advantages of Geothermal Electricity Why did I make those first purchases? Geothermal power has some unique advantages over other forms of renewable energy. Geothermal is base load power. Utilities have a strong preference towards...
Closing the Geothermal Loop
by Debra Fiakas CFA Calpine Plant at The Geysers. Photo Source: Calpine In the article “Is Ormat Technologies Misunderstood?”, I outlined a few performance measurement issues, but left out of the story Ormat’s position in the relative position in the geothermal industry. Naturally I received comments from readers about why I made no comparison of Ormat to Calpine Corporation (CPN: NYSE), the largest U.S. generator of electrical power using geothermal sources. On a go-forward basis Calpine shares are valued about the same as Ormat Technologies,...
