Ormat Technologies, Inc. · NYSE:ORA

Ormat Technologies — Investor Day (March 2022)

95 slides from Ormat Technologies's investor day presentation, Mar 30, 2022

Slide 2: Disclaimer
DISCLAIMER THIS PRESENTATION INCLUDES FORWARD-LOOKING STATEMENTS, AND THE DISCLAIMER SHOULD BE READ CAREFULLY This presentation contains statements relating to current expectations, conditions in and around Israel may adversely affect our operations and may estimates, forecasts and projections about
Slide 3: Disclaimer, Market & Industry Data, and Non-GAAP Metrics
DISCLAIMER, MARKET & INDUSTRY DATA, AND NON-GAAP METRICS THIS PRESENTATION INCLUDES FORWARD-LOOKING STATEMENTS, AND THE DISCLAIMER SHOULD BE READ CAREFULLY we could be exposed to significant liability for violations of hazardous MARKET & INDUSTRY DATA substances laws; we may be unable to obtain the
Slide 4: Advancing our strategy
DORON BLACHAR, CEO 09:00 Advancing our strategy To support energy sector needs in a carbon-free future PAUL THOMSEN, VP BUSINESS DEVELOPMENT 09:10 The increasing value of geothermal in a carbon-free future DORON BLACHAR, CEO 09:30 Continue to deliver profitable growth in the electricity segment 10:0
Slide 5: Our Speakers for Today
OUR SPEAKERS FOR TODAY DORON BLACHAR ASSI GINZBURG OFER BENYOSEF CEO CFO EVP ENERGY STORAGE & BUSINESS DEVELOPMENT PAUL THOMSEN SMADAR LAVI VP BUSINESS DEVELOPMENT VP, HEAD OF IR & ESG PLANNING AND REPORTING Copyright © 2022 Ormat Technologies, Inc. 5
Slide 6: Management Participants
MANAGEMENT PARTICIPANTS SHLOMI ARGAS SHIMON HATZIR PRESIDENT, HEAD OF EVP ELECTRICITY SEGMENT OPERATIONS AND PRODUCTS JESSICA WOELFEL MIKE PAVO GENERAL COUNSEL & CCO HEAD OF STORAGE OPERATIONS Copyright © 2022 Ormat Technologies, Inc. 6
Slide 8: A Leading Renewable Energy Provider
A LEADING RENEWABLE ENERGY PROVIDER Over Own & operate WITH A PROVEN TRACK RECORD IN GEOTHERMAL & ENERGY STORAGE 55 ~1.1GW Years of experience Geothermal, Storage, Solar PV & REG(1) 1,400 $ 663M Employees 2021 revenues $ 401M $ 62M 2021 adj. EBITDA(2) 2021 Net income(3) (1) REG – Recovered Energy Ge
Slide 10: Global Net Zero by 2050
GLOBAL NET ZERO BY 2050 ROADMAP FOR THE GLOBAL ENERGY SECTOR EMISSION REDUCTION BY MITIGATION MEASURES IN THE NET ZERO EMISSION SCENARIO GtCO2 +24% -50% +51% -100% 45 30 Activity RENEWABLES AND ELECTRIFICATION PLAY KEY Activity ROLES IN ACHIEVING NET ZERO 15 EMISSION SCENARIO BY 2050 2020 2030 2050
Slide 11: Global Electricity Demand Expected to More Than Double by 2050
GLOBAL ELECTRICITY DEMAND 2050: A FUTURE ENERGY SECTOR EXPECTED TO MORE THAN DOUBLE DOMINATED BY RENEWABLES BETWEEN 2020 AND 2050 THE PREDICTED INCREASE IN THE SHARE OF THE PREDICTED SHARE OF RENEWABLES IN TOTAL ELECTRICITY IN TOTAL ENERGY CONSUMPTION ELECTRICITY GENERATION GLOBALLY 29% 90% 49% Indu
Slide 12: Stability & Flexibility in Electricity Supply Is a Must
IN A FUTURE WHERE SOLAR & WIND ARE PREDICTED TO BE 70 % OF TOTAL ELECTRICITY GENERATION… STABILITY & FLEXIBILITY IN THE ELECTRICITY SUPPLY IS A MUST Copyright © 2022 Ormat Technologies, Inc. 12
Slide 13: Ormat's Solutions Facilitate Industry Needs
ORMAT’S SOLUTIONS FACILITATE INDUSTRY NEEDS ON THE PATH TO A CARBON-FREE FUTURE GEOTHERMAL STORAGE Generates firm & Enables stability of the flexible power grid and flexibility Copyright © 2022 Ormat Technologies, Inc. 13
Slide 14: Ormat Growth Strategy
ORMAT GROWTH STRATEGY Expanding our offerings: PRODUCT High-temperature resources Technological innovations Steep growth: focus on key U.S. markets STORAGE M&A Organic growth: focus on the U.S. and Indonesia ELECTRICITY M&A Copyright © 2022 Ormat Technologies, Inc. 14
Slide 15: Ormat Portfolio Growth Targets
ORMAT PORTFOLIO GROWTH TARGETS PORTFOLIO GROWTH (GW) EXPAND OPERATION IN THE U.S. 14-16% CAGR 2.15 GW – 4% 6% 2.3 GW Indonesia Indonesia 1.7GW – 22% 12% 1.75GW Intl. Intl. 2021 2026 1.1 GW (MW) (MW) 74% 83% U.S. U.S. 2021 2024E 2026E Geothermal Solar Storage Copyright © 2022 Ormat Technologies, Inc.
Slide 16: Ormat Financial Growth Targets
ORMAT FINANCIAL GROWTH TARGETS REVENUE GROWTH ADJUSTED EBITDA GROWTH(1) 10-11.5% 10-12% CAGR CAGR $1.1B-$1.15B $663M $650M-$700M Large M&A $401M As an upside 2021 2026E 2021 2026E Electricity Product Storage (1) See reconciliation note on page 95 Copyright © 2022 Ormat Technologies, Inc. 16
Slide 18: U.S. Geothermal Market
U.S. GEOTHERMAL MARKET THE U.S. IS THE WORLDS LEADING PRODUCER OF GEOTHERMAL POWER GEOTHERMAL OPERATORS’ SHARE OF U.S. GENERATION Calpine 35% 23% Ormat 3.7GW 29% CalEnergy 16% Installed capacity of global COSO 7% NCPA 5% thrugh 20211 installed capacity1 Cyrq 3% Vulcan AltaRock 2% 1% ~ 30% ENEL 1% ge
Slide 19: Ormat Is the Largest U.S. Geothermal Developer
ORMAT IS THE LARGEST U.S. GEOTHERMAL DEVELOPER ORMAT IS THE FASTEST GROWING GEOTHERMAL OPERATOR IN THE U.S. 674MW 1 65% 674MW Generating capacity of the generating 77 40% from 17 plants capacity in Nevada 482MW Growth 115 in CA, NV, ID and OR 19 30 Projects Prospects 2017 2022E under construction in
Slide 21: The Increasing Share of Intermittent Power in California
THE INCREASING SHARE OF INTERMITTENT POWER IN CALIFORNIA CALIFORNIA RENEWABLE PORTFOLIO PROGRESSION TO 100% CARBON-FREE ELECTRICITY STANDARD (RPS) TARGET DEVELOPMENT 100% by 2045 60% by 2030 50% by 2030 30% 32% 32% 33% 28% 33% 23% 25% by 20% 23% 2030 15%-17% 17% 17% 21% 21% 17% 18% 20% 14% 17% by 12
Slide 22: The Impact of Intermittent Power on the Grid
THE IMPACT OF INTERMITTENT POWER ON THE GRID Solar PV impact on the electric grid strengthens the position of geothermal as a premium renewable source TYPICAL SPRING DAY NET – LOAD ENERGY PRICES IN CALIFORNIA 1 IN SOUTHERN CALIFORNIA 2016-20192 GW $/MWh 28 90 26 80 24 70 22 60 20 50 18 Evening peak
Slide 23: August 2020: Blackouts in California
AUGUST 2020: BLACKOUTS IN CALIFORNIA Blackouts created a new sense of urgency about summer reliability, with new emphasis on the need for firm resources Copyright © 2022 Ormat Technologies, Inc. 23
Slide 24: Regulators, System Operators & Off Takers Responded
REGULATORS, SYSTEM OPERATORS & OFF TAKERS RESPONDED: 2021 California PUC Geothermal goals: Procure: 1GW 500 MW of zero emission and NV Energy2 1 firm power by 2026 500MW-1.5 GW LADWP3 Firm zero emission power - namely geothermal California PUC: California Public Utilities Commission ; NV Energy: Nev
Slide 28: Land Position
LAND POSITION IN THE U.S. 4% 76% Owned by Ormat or leased from states BLM Increasing the land position • Bureau of Land Management (BLM) 20% • Acquisitions Private 356k Acres Copyright © 2022 Ormat Technologies, Inc. 28
Slide 30: Transmission: Acquisition of Oxbow Transmission Line
TRANSMISSION: ACQUISITION OF OXBOW TRANSMISSION LINE1 Transmission Capacity on NV Energy’s ON-Line : Underutilized 220-mile T-line of 318MW (46MW unused) 300MW-400MW 140 of 230KV electricity to provide Additional > MW of Long- incremental access Term Firm Capacity with various transmission system op
Slide 31: Increase in Demand to Drive Potential Upside on PPA Pricing
INCREASE IN DEMAND TO DRIVE POTENTIAL UPSIDE ON PPA PRICING 75.5 $ /MWh 65-80 $ /MWh 150 MW SCPPA Portfolio PPA 55-65 $/MWh 2017 2018 2019 2020 2021 2022 …2032 Illustrates the demand for geothermal capacity U.S. PPA price for geothermal1 (1)75.5$/MWh PPA price are based on 150MW SCAPPA Portfolio PPA
Slide 32: Summary: Geothermal Is on the Rise
SUMMARY: GEOTHERMAL IS ON THE RISE Increased demand: 1 A target of additional approximately 2GW geothermal capacity Strong positioning: 2 Land, permitting and transmission are key Ormat is strongly positioned with robust prospect inventory and secured transmission Increased PPA pricing 3 Copyright ©
Slide 34: Geographic Breakdown
GEOGRAPHIC BREAKDOWN OF 2021 ELECTRICITY SEGMENT PORTFOLIO (MW) U.S. 727 MW INDONESIA 42 MW1 GUATEMALA & GUADELOUPE KENYA HONDURAS 15 150 78 MW MW MW 4% Indonesia 24% 72% 1 GW2 OF OPERATING ASSETS International U.S. GEOTHERMAL AND SOLAR PV 1 GW (1GW) OPERATING GLOBALLY WITH INCREASING EXPOSURE IN HI
Slide 35: Stable, Visible Operation
STABLE, VISIBLE OPERATION GEOTHERMAL DOMINANT PORTFOLIO VISIBLE CASH GENERATING ASSETS with highest capacity factor of any renewable resource 15 years 94% 6% Weighted average PPA life Geothermal REG & Solar PV 1GW 89.7 $/MWh Average price for 2021 95% of 2021 adj. EBITDA Copyright © 2022 Ormat Techn
Slide 36: Advancing Profitable Growth in Attractive Markets
ADVANCING PROFITABLE GROWTH IN ATTRACTIVE MARKETS GEOTHERMAL POTENTIAL IN TARGETED MARKETS U.S. 35GW 9x 2021 capacity LATAM INDONESIA 36GW 29GW 21x 12x 2021 capacity 2021 capacity Source of above charts: Geothermal Power Market Forecast 2019-2029, Visiongain; Think GeoEnergy – “Geothermal Market Ana
Slide 37: Growth Target (MW)
GROWTH TARGET (MW) GEOTHERMAL AND SOLAR PV 7.4-8.2% 2021-2026 CAGR 1,445-1,500 Solar PV 1,255-1,285 95MW-100MW 1,012 1375 Geothermal 1190 1,350MW -1,400MW 1005 2021 2024E 2026E Copyright © 2022 Ormat Technologies, Inc. 37
Slide 38: How We Plan to Continue Delivering Profitable Growth
HOW WE PLAN TO CONTINUE DELIVERING PROFITABLE GROWTH ORGANIC GROWTH INDONESIA M&A ENHANCED EXPLORATION Copyright © 2022 Ormat Technologies, Inc. 38
Slide 39: How We Plan to Continue Delivering Profitable Growth
HOW WE PLAN TO CONTINUE DELIVERING PROFITABLE GROWTH ORGANIC GROWTH INDONESIA M&A ENHANCED EXPLORATION Copyright © 2022 Ormat Technologies, Inc. 39
Slide 40: Prospects for Exploration and Development
41 PROSPECTS FOR EXPLORATION AND DEVELOPMENT U.S. 30 prospects INDONESIA 3 prospects GUATEMALA HONDURAS ETHIOPIA 2 1 4 prospects prospect prospects NEW ZEALAND 1 prospect Copyright © 2022 Ormat Technologies, Inc. 40
Slide 41: Expanding Drilling Activity
EXPANDING DRILLING ACTIVITY TO SUPPORT EXPEDITED GROWTH Extensive exploration and drilling campaigns expected in 2022, 10 sites at 5 countries 23 3x 10 9 7 2019 2020 2021 2022E Development Exploration Copyright © 2022 Ormat Technologies, Inc. 41 41
Slide 42: How We Plan to Continue Delivering Profitable Growth
HOW WE PLAN TO CONTINUE DELIVERING PROFITABLE GROWTH ORGANIC GROWTH INDONESIA M&A ENHANCED EXPLORATION Copyright © 2022 Ormat Technologies, Inc. 42
Slide 43: Indonesia
INDONESIA 4th #1 BBB/Baa2 largest country in the world1 largest economy in Country’s rating 273M population Southeast Asia2 by S&P and Moody’s3 Jakarta , Indonesia (1) By population (2) By GDP (3) Indonesia's Sovereign Credit Rating Copyright © 2022 Ormat Technologies, Inc. 43
Slide 44: Indonesia Energy Market
INDONESIA ENERGY MARKET (2020) Electricity generation by source (GWh)1 350,000 300,000 ~33GW ~12% 250,000 Wind & Solar PV 0.2% Geothermal 5% 2020 electricity Renewables 1,2 200,000 production1 (5% geothermal) Hydro 7% 150,000 100,000 50,000 0 1990 1995 2000 2005 2010 2015 2020 ~99% Coal Natural gas
Slide 45: 2nd Largest Geothermal Market in the World
2ND LARGEST GEOTHERMAL MARKET IN THE WORLD 2.3GW 29GW installed geothermal Estimated geothermal capacity, steam dominated1 potential2 56% Approx. 300MW of 2021 new geothermal capacity Expected geothermal worldwide came from Indonesia1 development by 20233 56% Indonesia 140MW Approx. open to binary t
Slide 46: Supportive Regulation
SUPPORTIVE REGULATION 01 Renewable energy targets 03 Government drilling 23% by 2025, 31% by 20351 program 02 20.9GW of renewable 04 Avg. geothermal rate energy by 2030. approx. 9-12 cent/kWh3 16% from geothermal2 Padar Island, Flores, Indonesia (1) Source: National Electricity Plan 2019 –2038 (2) 2
Slide 47: Ormat's Development in Indonesia
ORMAT’S DEVELOPMENT IN INDONESIA1 TOKA TINDUNG Under development: SARULLA initial drilling 12.75% ownership 42MW in operation WELLPAD AND CIVIL WORK, TOKA 75- SARULLA 100% ownership 100% ownership 49% ownership WAPSALIT TOWARDS DRILLING WORK, IJEN Under development: civil work in progress IJEN 15MW
Slide 48: Additional Growth Drivers for Ormat Pipeline
ADDITIONAL GROWTH DRIVERS FOR ORMAT PIPELINE M&A Partnership with PLN1 Government drilling program2 Targeting between Ormat was selected in the Tenders will be released in 2023 40MW and 60MW 1st RFP for four prospects through M&A (49% developer/51% PLN) (1) PLN: PT Perusahaan Listrik Negara (state o
Slide 49: Ormat's Expected Growth in Indonesia (MW)
ORMAT’S EXPECTED GROWTH IN INDONESIA (MW) 100-150 3-4% Future market share1 3x ~ 57 42 2022E 2024E 2026E (1) Ormat future market share is based on the current installed capacity in Indonesia (2.3GW) and the additional expected capacity by 2026 (1.5GW), according to PLN roadmap Copyright © 2022 Ormat
Slide 50: How We Plan to Continue Delivering Profitable Growth
HOW WE PLAN TO CONTINUE DELIVERING PROFITABLE GROWTH ORGANIC GROWTH INDONESIA M&A ENHANCED EXPLORATION Copyright © 2022 Ormat Technologies, Inc. 50
Slide 51: M&A: Track Record of Accretive Value
M&A Track record of accretive value M&A transactions: 2016 • 9MW from 1 operational power plant • Expanded to 15MW in 6 months • Advanced stages of 10MW enhancement 2018 • 3 operational power plants • Improved generation from 38MW to 47MW • Advanced stage of 25MW expansion • 2 prospects under explor
Slide 52: Summary: Electricity Segment Growth Drivers
SUMMARY ELECTRICITY SEGMENT GROWTH DRIVERS EXPECTED REVENUE GROWTH ($M) EXPECTED PORTFOLIO GROWTH (MW) 1,445-1,500 $870 - $920 1,255-1,285 1,012 $586 Large M&A As an upside 2021 2026E 2021 2024E 2026E Geothermal Solar PV Copyright © 2022 Ormat Technologies, Inc. 52
Slide 54: Why Energy Storage?
WHY ENERGY STORAGE? THE SHARE OF WIND & SOLAR IN TOTAL ELECTRICITY GENERATION GLOBALLY As the share of wind Approx. 70% and solar in the generation mix rises, energy storage is 40% critical to support the stability and flexibility of the electric grid Approx. 10% 2020 2030 2050 Source: Net Zero by 2
Slide 55: Why Is Ormat in Energy Storage Business?
WHY IS ORMAT IN ENERGY STORAGE BUSINESS ? Steep market growth trajectory Strong regulatory support Market opportunities Ormat growth strategy Copyright © 2022 Ormat Technologies, Inc. 55
Slide 56: Steep Market Growth Trajectory for Front of the Meter Applications
STEEP MARKET GROWTH TRAJECTORY FOR FRONT OF THE METER (FTM) APPLICATIONS 49,107 U.S. FTM storage is expected to reach 49 GW in 2026 39,443 21x from 2020 30,597 50 % 22,195 of projected growth from California & Texas 13,376 7,065 2,309 1,195 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E California Te
Slide 57: Regulatory and Policy Drivers Key to Growth
REGULATORY AND POLICY DRIVERS KEY TO GROWTH: STATE-LEVEL ENERGY STORAGE TARGETS Nevada New York Maine Massachusetts 1 GW 3 GW 400 MW 1 GW by by 2030 by 2030 by 2030 YE 2025 CPUC1: 9 Procure additional 15 GW states have energy storage targets of new storage and demand response resources by 2032 Calif
Slide 58: CAISO Market
CAISO MARKET1 PRICES ($/kW-MONTH) 30 20 10 0 Q1 - Q2 - Q3 - Q4 - Q1 - Q2 - Q3 - Q4 - Q1 - Q2 - Q3 - Q4 - Q1 - Q2 - Q3 - Q4 - 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 Market prices excluding RA contracts REVENUE SOURCE • Capacity – RA contracts • Ancillary servi
Slide 59: Illustrative Battery Energy Storage System (BESS) Model
ILLUSTRATIVE BATTERY ENERGY STORAGE SYSTEM (BESS) MODEL 4 HOURS, STAND ALONE BESS, CAISO SIZE 80MW/320MWh TERM 20 Years • Merchant: $11/kW-mo. REVENUE ASSUMPTIONS • Contracted Capacity: $6/kW-mo. CAPEX1 $1,160-$1,330/kW OPEX1 $26-$30/kW-yr. (1) CAPEX and OPEX calculated based on Ormat assumptions Co
Slide 60: Illustrative BESS Model
ILLUSTRATIVE BESS MODEL 4 HOURS, STAND ALONE BESS, CAISO Total CAPEX $93-$106M Avg. Annual Revenue $15M Avg. Annual OPEX $2.1-$2.4M Avg. Annual EBITDA $12.9-$13.2M Avg. Gross Margin 52-54% Avg. EBITDA Margin 84-86% ITC1 PIRR 9.0-10.5% As an upside (1) ITC- Investment Tax Credit Copyright © 2022 Orma
Slide 61: PJM Market
PJM MARKET1 PRICES ($/MWh) 60 50 40 30 20 10 0 2016 2017 2018 2019 2020 2021 2022 RegD RMCP REVENUE SOURCE Ancillary services at the regulation market EXPECTED DEPLOYMENT (GW) 2 (STORAGE + SOLAR PV AND STAND-ALONE STORAGE) PJM: 32% of total 2021 storage revenues 4,834 100% from ancillary services 49
Slide 62: ERCOT Market
ERCOT MARKET1 PRICES ($/MWh) 30 20 10 0 2016 2017 2018 2019 2020 2021 2022 Excludes one-time high prices in February 2021 Texas freeze REVENUE SOURCE • Ancillary services: • Responsive Reserve Service (RRS) • Energy EXPECTED DEPLOYMENT (GW)2 (STORAGE + SOLAR PV AND STAND-ALONE STORAGE) ERCOT: 10% of
Slide 63: Illustrative BESS Model (ERCOT)
ILLUSTRATIVE BESS MODEL 2 HOURS, STAND ALONE BESS, ERCOT SIZE 80MW/160MWh TERM 15 Years REVENUES ASSUMPTIONS $9.2/kW-mo. CAPEX1 $625-750/kW OPEX1 $16-20/kW-yr. (1) CAPEX and OPEX calculated based on Ormat assumptions Copyright © 2022 Ormat Technologies, Inc. 63
Slide 64: Illustrative BESS Model (ERCOT)
ILLUSTRATIVE BESS MODEL 2 HOURS, STAND ALONE BESS, ERCOT Total CAPEX $50-$60M Avg. Annual Revenue $8.8M Avg. Annual OPEX $1.3-$1.6M Avg. Annual EBITDA $7.2-$7.5M Avg. Gross Margin 40-44% Avg. EBITDA Margin 82-85% PIRR 8.0-10.0% ITC As an upside (1) ITC- Investment Tax Credit Copyright © 2022 Ormat T
Slide 65: Ormat Strategic Focus
ORMAT STRATEGIC FOCUS TARGET THE LARGEST AND MOST 1 LUCRATIVE MARKETS: California, Texas, and PJM 01 CA 02 TX 30MW/120MWh 10MW/10MWh 03 NJ 04 VT 41MW/41MWh 2MW/5MWh FOCUS ON STANDALONE ENERGY STORAGE 2 Providing ancillary service, energy and capacity to the grid 4 3 1 EXPANSION TO NEW REGIONS 3 Shor
Slide 66: Strong Position Across the BESS Value Chain
STRONG POSITION ACROSS THE BESS VALUE CHAIN OPERATIONAL AND FINANCIAL BACKING COMPONENT SYSTEM EPC OWNER & DEVELOPER SUPPLIER INTEGRATOR CONTRACTOR OPERATOR • Batteries • Site control • Complete System: • Engineering • Own • Inverters • Interconnection Battery Energy • Procurement • Operate • Balanc
Slide 67: Leveraging Our Market Expertise to Enhance and Build Storage Pipeline
LEVERAGING OUR MARKET EXPERTISE TO ENHANCE AND BUILD STORAGE PIPELINE 2.3 GW 2.1 GW 32 named projects 30 named projects 1.2 GW 33 named projects 0.3 GW 19 named projects 2019 2020 2021 Q1 2022 Copyright © 2022 Ormat Technologies, Inc. 67
Slide 68: Ormat Energy Storage Growth
ORMAT ENERGY STORAGE GROWTH UNDER CONSTRUCTION: 8 projects, 189 MW, all secured for battery supply and revenue source Projected Expected Projected Revenue State Project Capacity COD MWh source (MW) 1 Tierra Buena; RA & CA 25 60 5 8 Merchant 1 6 4 2 Pomona 2 2 7 2022 TX 3 Upton 25 25 Merchant 4 Andov
Slide 69: Leveraging BD Efforts to Grow Our Portfolio
LEVERAGING BD EFFORTS TO GROW OUR PORTFOLIO Ormat energy storage development (MW) Ormat energy storage development (MWh) 1,850-2,250 700-800 8-10x 11-13x 445-465 900-1,000 172 83 297 73 176 43 136 1 1 46 2018 2019 2020 2021 2022E 2024E 2026E 2018 2019 2020 2021 2022E 2024E 2026E Operational Incremen
Slide 70: Accelerating Growth in the Energy Storage Market
ACCELERATING GROWTH IN THE ENERGY STORAGE MARKET LARGE PIPELINE IN LUCRATIVE 1 LOCATIONS • Strong regulatory support • Robust growth trajectory EXPERTISE AND TRACK RECORD 2 • In geothermal • First mover in storage UNIQUE CORE CAPABILITIES 3 • Financial strength • Stability of electricity segment • P
Slide 72: Geothermal's Growing Global Market
GEOTHERMAL’S GROWING GLOBAL MARKET 1GW/Year Geothermal Market Forecast (GW)1 expected geothermal capacity addition in the 25.5 next 10 years 23.9 22.6 21.4 20.3 >400MW/Year 19.3 9.7 18.4 17.6 9.0 16.9 8.4 of binary capacity 16.2 7.8 7.3 addition in the next 6.9 6.5 10 years 6.1 5.5 5.8 ~80% 11.4 12.
Slide 73: Focusing on Strategic Territories with Increasing Demand
FOCUSING ON STRATEGIC TERRITORIES WITH INCREASING DEMAND U.S. TURKEY 200 MW 280 MW INDONESIA 140 MW LATAM 230 MW 1,250 MW NEW ZEALAND 400 MW of geothermal binary capacity is expected to be released by 2024 Source: Thinkgeoenergy.com and Ormat analysis Copyright © 2022 Ormat Technologies, Inc. 73
Slide 74: Ormat Is the Leading Supplier of Binary Geothermal Power Plants Worldwide
ORMAT IS THE LEADING SUPPLIER OF BINARY GEOTHERMAL POWER PLANTS WORLDWIDE (BY INSTALLED CAPACITY) 38% STG 22% other binary Toshiba 16% TICA (Exergy) 9% Mitsubishi 12% Kaishan 7% Fuji 9% Turboden 3% Other 2% 2,306 MW Atlas Copco (Egesim) 2% 1,430 MW TOTAL Other 1% BINARY 2017-2021 2017-2021 62% 78% B
Slide 75: Technological Innovations
TECHNOLOGICAL INNOVATIONS Designed and manufactured the world’s largest binary turbine to: • Lower project costs • Improve operational costs • Increase turbine and cycle efficiency • Strengthen Ormat’s competitive edge • Enable competition with steam technology 50MW 32MW 5 stage 5 stage 4MW 2 stage
Slide 76: Product Segment Summary
PRODUCT SEGMENT SUMMARY EXPECTED PRODUCT REVENUE GROWTH ($M) $95-$105 $46.9 2021 2026E PRODUCT AND INTERSEGMENT REVENUE ($M) $191.0 $148.0 $129.6 $113.2 $84.6 $46.9 2019 2020 2021 Copyright © 2022 Ormat Technologies, Inc. 76
Slide 77: Solid Potential to Grow Product Business
SOLID POTENTIAL TO GROW PRODUCT BUSINESS 1 STRONG POTENTIAL IN NEW ZEALAND, INDONESIA, LATAM AND U.S. THE WORLD IS EMERGING FROM THE 2 COVID-19 PANDEMIC Potential for recovery of geothermal market in Turkey 3 TECHNOLOGICAL IMPROVEMENTS STRENGTHEN ORMAT’S COMPETITIVE EDGE Ngawha, New Zealand Copyrigh
Slide 79: Financial Aspects of Growth Plan
FINANCIAL ASPECTS OF GROWTH PLAN INSTALLED CAPACITY GROWTH (MW) 14-16% CAGR 2.15 GW – 2.3 GW CAPITAL NEEDS 1.7 GW- 1.75GW Storage (MW) 700-800 1.1GW Electricity (MW) 1,445-1,550 CAPITAL STRUCTURE 2021 2024E 2026E Geothermal Solar Storage Copyright © 2022 Ormat Technologies, Inc. 79
Slide 80: Building Upon Our Financial Strength
BUILDING UPON OUR FINANCIAL STRENGTH CAPITAL NEEDS 27% CAPEX RESOURCES Storage APPROX. $ 2.0B CAPEX NEEDS1 Cash Flow from operations 72% Electricity Tax equity transaction Project debt finance Limited impact of commodity prices The majority of project pipeline for 2022/ 2023 was manufactured Corpora
Slide 81: Strong Capital Position
STRONG CAPITAL POSITION 13% 55% Finance liability Corporate Debt 2026 MAINTAIN SOLID FINANCIAL LEVERAGE $ 1.9B TOTAL DEBT 31.12.2021 3.5-4.0x 2026E Net Debt 32% to Adjusted EBITDA Project finance 1.5B 98% 4.3% 48-52% Net Debt(1) of total debt in Average interest fixed rate(1) rate(1) 2026E Net Debt
Slide 82: Financial Growth Targets
FINANCIAL GROWTH TARGETS REVENUE GROWTH ADJUSTED EBITDA GROWTH1 Storage $60M-$65M $1.1B–$1.15B Product $650M-$700M $20M-$25M Electricity $663M $570M-$610M $401M Large M&A As an upside 2021 2026E 2021 2026E Electricity Product Storage (1) See reconciliation note on page 95 Copyright © 2022 Ormat Tech
Slide 83: Adjusted EBITDA Growth
ADJUSTED EBITDA GROWTH1 $100M- $650M- $140M $700M $45M- $55M $33M >$500M $5M $430M- $27M $450M $3M Electricity Electricity New Capacity Storage Electricity • North Valley Adjusted EBITDA margin to reach • Dixie Meadows 47%-52% • $16M Olkaria Products enhancement • CD4, Tungsten other Storage enhance
Slide 84: Strong Storage Projected Growth in All Parameters
STRONG STORAGE PROJECTED GROWTH IN ALL PARAMETERS DEPLOYMENT (MW) REVENUE ($M) 700-800 $100-$120 $30 73 83 $15 $16 43 2019 2020 2021 2026E 2019 2020 2021 2026E ADJUSTED EBITDA ($M)1 ADJUSTED EBITDA MARGIN (%)1 $60-$65 54%-60% 34% 20% $10 ($1) $3 2019 2020 2021 2026E 2019 2020 2021 2026E (1) See reco
Slide 85: Well Positioned to Support Accelerating Growth
WELL POSITIONED TO SUPPORT ACCELERATING GROWTH STRONG FINANCIAL POSITION 1 TO SUPPORT GROWTH PLAN AND M&A OPPORTUNITIES 2 MAINTAIN STRONG LEVERAGE METRICS 3 INCREASE PROFITABILITY STORAGE MARGINS Copyright © 2022 Ormat Technologies, Inc. 85
Slide 87: Delivering Sustainable Growth
Large growth potential with strong tailwinds DELIVERING SUSTAINABLE Strong financial position GROWTH Pure-play renewables platform aligned with ESG principles Copyright © 2022 Ormat Technologies, Inc. 87
Slide 88: Ormat Growth Strategy
ORMAT GROWTH STRATEGY Expanding our offerings: PRODUCT High-temperature resources Technological innovations Steep growth: focus on key U.S. markets STORAGE M&A Organic growth: focus on the U.S. and Indonesia ELECTRICITY M&A Copyright © 2022 Ormat Technologies, Inc. 88
Slide 89: Ormat Financial Growth Targets
ORMAT FINANCIAL GROWTH TARGETS PORTFOLIO GROWTH (GW) EXPAND OPERATION IN THE U.S. 14-16% CAGR 2.15 GW – 4% 6% 2.3 GW Indonesia Indonesia 1.7GW – 22% 74% 12% 83% 1.75GW Intl. U.S. Intl. U.S. 2021 2026 1.1 GW (MW) (MW) 2021 2024E 2026E Geothermal Solar Storage Copyright © 2022 Ormat Technologies, Inc.
Slide 90: Ormat Financial Growth Targets
ORMAT FINANCIAL GROWTH TARGETS REVENUE GROWTH ADJUSTED EBITDA GROWTH1 10-11.5% 10-12% CAGR CAGR $1.1B-$1.15B $650M-$700M $663M Large $401M M&A As an upside 2021 2026E 2021 2026E Electricity Product Storage (1) See reconciliation note on page 95 Copyright © 2022 Ormat Technologies, Inc. 90
Slide 91: Committed to Continued Profitable Growth
COMMITTED TO CONTINUED PROFITABLE GROWTH MORE THAN DOUBLE EXPLORATION ACTIVITY EXPANDING SIGNIFICANTLY DEVELOPMENT EFFORTS IN INDONESIA GROWING OUR ENERGY STORAGE TARGETING 10X THE CURRENT CAPACITY BY 2026 STRONG REGULATORY TAILWIND Copyright © 2022 Ormat Technologies, Inc. 91
Slide 93: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Years Ended Dec 31, 2021 Net income 76,077 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 80,534 Income tax provision (benefit) 24,850 Adjustment to investment in an unconsolidated company:
Slide 94: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Year Ended December 31 2021 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 239 Marketable Securities at fair value 43 Restricted cash and cash equivalents and marketable securities 104 Total
Slide 95: Reconciliation of Non-GAAP Metrics
RECONCILIATION OF NON-GAAP METRICS PROJECTED EBITDA AND ADJUSTED EBITDA The Company is unable to provide a reconciliation for its projected EBITDA and Adjusted EBITDA metrics to net income without unreasonable efforts due to the high variability and complexity with respect to estimating certain forw

Ormat Technologies — Investor Day (March 2022) on 6ix

Ormat Technologies — Investor Day (March 2022)

Slide 1: Ormat 2022 Analyst & Investor Day

Slide 2: Disclaimer

Slide 3: Disclaimer, Market & Industry Data, and Non-GAAP Metrics

Slide 4: Advancing our strategy

Slide 5: Our Speakers for Today

Slide 6: Management Participants

Slide 7: To Support Energy Sector Needs in a Carbon-Free Future

Slide 8: A Leading Renewable Energy Provider

Slide 9: Our Business Segments

Slide 10: Global Net Zero by 2050

Slide 11: Global Electricity Demand Expected to More Than Double by 2050

Slide 12: Stability & Flexibility in Electricity Supply Is a Must

Slide 13: Ormat's Solutions Facilitate Industry Needs

Slide 14: Ormat Growth Strategy

Slide 15: Ormat Portfolio Growth Targets

Slide 16: Ormat Financial Growth Targets

Slide 17: In a Carbon-Free Future

Slide 18: U.S. Geothermal Market

Slide 19: Ormat Is the Largest U.S. Geothermal Developer

Slide 20: What Has Led to Realization of Geothermal Value?

Slide 21: The Increasing Share of Intermittent Power in California

Slide 22: The Impact of Intermittent Power on the Grid

Slide 23: August 2020: Blackouts in California

Slide 24: Regulators, System Operators & Off Takers Responded

Slide 25: What Is Required to Support These Goals

Slide 26: Unlocking Geothermal Potential

Slide 27: Ormat Is Well Positioned to Support Industry Goals

Slide 28: Land Position

Slide 29: Permitting

Slide 30: Transmission: Acquisition of Oxbow Transmission Line

Slide 31: Increase in Demand to Drive Potential Upside on PPA Pricing

Slide 32: Summary: Geothermal Is on the Rise

Slide 33: In the Electricity Segment

Slide 34: Geographic Breakdown

Slide 35: Stable, Visible Operation

Slide 36: Advancing Profitable Growth in Attractive Markets

Slide 37: Growth Target (MW)

Slide 38: How We Plan to Continue Delivering Profitable Growth

Slide 39: How We Plan to Continue Delivering Profitable Growth

Slide 40: Prospects for Exploration and Development

Slide 41: Expanding Drilling Activity

Slide 42: How We Plan to Continue Delivering Profitable Growth

Slide 43: Indonesia

Slide 44: Indonesia Energy Market

Slide 45: 2nd Largest Geothermal Market in the World

Slide 46: Supportive Regulation

Slide 47: Ormat's Development in Indonesia

Slide 48: Additional Growth Drivers for Ormat Pipeline

Slide 49: Ormat's Expected Growth in Indonesia (MW)

Slide 50: How We Plan to Continue Delivering Profitable Growth

Slide 51: M&A: Track Record of Accretive Value

Slide 52: Summary: Electricity Segment Growth Drivers

Slide 53: Well Positioned to Deliver

Slide 54: Why Energy Storage?

Slide 55: Why Is Ormat in Energy Storage Business?

Slide 56: Steep Market Growth Trajectory for Front of the Meter Applications

Slide 57: Regulatory and Policy Drivers Key to Growth

Slide 58: CAISO Market

Slide 59: Illustrative Battery Energy Storage System (BESS) Model

Slide 60: Illustrative BESS Model

Slide 61: PJM Market

Slide 62: ERCOT Market

Slide 63: Illustrative BESS Model (ERCOT)

Slide 64: Illustrative BESS Model (ERCOT)

Slide 65: Ormat Strategic Focus

Slide 66: Strong Position Across the BESS Value Chain

Slide 67: Leveraging Our Market Expertise to Enhance and Build Storage Pipeline

Slide 68: Ormat Energy Storage Growth

Slide 69: Leveraging BD Efforts to Grow Our Portfolio

Slide 70: Accelerating Growth in the Energy Storage Market

Slide 71: Assi Ginzburg | CFO

Slide 72: Geothermal's Growing Global Market

Slide 73: Focusing on Strategic Territories with Increasing Demand

Slide 74: Ormat Is the Leading Supplier of Binary Geothermal Power Plants Worldwide

Slide 75: Technological Innovations

Slide 76: Product Segment Summary

Slide 77: Solid Potential to Grow Product Business

Slide 78: Assi Ginzburg | CFO

Slide 79: Financial Aspects of Growth Plan