Slide 1: Ormat Technologies, Inc. Investor Presentation November 2023
ORMAT TECHNOLOGIES, INC. INVESTOR PRESENTATION NOVEMBER 2023
Slide 2: Safe Harbor Statement and Non-GAAP Metrics
SAFE HARBOR STATEMENT AND NON-GAAP METRICS THIS PRESENTATION INCLUDES FORWARD-LOOKING STATEMENTS, AND THE DISCLAIMER SHOULD BE READ CAREFULLY FORWARD-LOOKING STATEMENTS These forward-looking statements are not intended to be a guarantee of future results, but instead This presentation, and informati
Slide 3: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 3 3
Slide 4: A Leading Renewable Energy Provider
A LEADING RENEWABLE CD4, Mammoth Complex, NV, USA, 65MW ENERGY PROVIDER WITH A PROVEN TRACK RECORD IN GEOTHERMAL AND ENERGY STORAGE over Own & operate 55 ~ 1.29GW 1,480 Years of Geothermal, Storage, Employees experience Solar PV & REG1 $ 734M $ 435M $ 66M 2022 revenues 2022 adj. EBITDA2 2022 Net inc
Slide 5: Our Business Segments
OUR BUSINESS SEGMENTS 82% 14% 4% Of LTM Of LTM Of LTM revenues revenues revenues ELECTRICITY PRODUCT ENERGY STORAGE Develop, build, own and operate Design, manufacture and sell Growing to establish geothermal, solar and recovered equipment for geothermal and leading position in the energy-based (REG
Slide 6: Overview, Geothermal market, Business updates
Overview Geothermal market Business updates Regulation updates Development in Indonesia COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 6 6
Slide 7: Overview
OVERVIEW Generates firm & flexible power Diversified portfolio 2022 revenue geographic breakdown 1 830 MW U.S. 3 38 MW Honduras 5 150 MW Kenya 1,115MW 74% U.S. 26% International Geothermal, Solar PV & REG 2 40 MW 4 15 MW 6 42 MW1 Guatemala Guadeloupe Indonesia 92% Growing Profitable portfolio3 Geoth
Slide 8: Geothermal Market
GEOTHERMAL MARKET # 2 Ormat - the 2nd largest geothermal ABOITIZ POWER owner & operator1 STAR ENERGY PERTAMINA ON POWER MERCURY ORMAT CALPINE KENGEN ENEL EDC CFE ~ 16.3GW Global Installed geothermal capacity1 10x EU Africa ASIA Oceania U.S LATAM Global Potential Installed 3.6 0.9 4.9 1.0 3.7 1.7 vs.
Slide 9: Expected Cash from IRA Tax Benefits
EXPECTED CASH IRA FROM IRA TAX BENEFITS TO REDUCES PTC ITC CAPITAL NEEDS BENEFITS TO THE GEOTHERMAL ASSETS BENEFITS TO THE STORAGE ASSETS IN 2023 TAX EQUITY TRANSACTION ITC SALE EBITDA IMPACT OVER REDUCES TAX EXPENSES & UP-TO 10 YRS. BOOSTS EPS equivalent to 40-45% of eligible CAPEX 30-40% of eligib
Slide 10: Regulatory Environment: Financial Impact of IRA
REGULATORY FINANCIAL IMPACT OF IRA U.S. ENVIRONMENT Income attributable to sale of Income tax provision tax benefits $14.9M +63.9% increase vs Q3 2022 Tax benefits related to tax equity Transferable ITC Q3 2023 transaction in Q3 2023 $6.6M $12.5M Increase of $3.4 million mainly due to Mainly related
Slide 11: M&A Announcement
M&A ANNOUNCEMENT $271M total estimated consideration Entered into a purchase agreement with Enel Green Power North America(1) : Expects to finance the acquisition with new long- term corporate debt 43 MW net from three geothermal power plants EXPECTED CLOSING: By Q1 2024 under long-term contracts in
Slide 12: Value Creation
VALUE CREATION Salt Wells, NV I 3 years average $35M REVENUE & $24M EBITDA 20-22 From operating contracted assets By end of UPGRADE ALL THREE GEOTHERMAL ASSETS 2025 Expect to add 17MW Improve EBITDA by $15 million Expected $55 million investment Approx. an 8X EV/EBITDA multiple By end of 2029 EXPANS
Slide 13: Development in Indonesia
DEVELOPMENT IN INDONESIA SARULLA 42MW TOKA TINDUNG Under development: # 1 4 th in operation initial drilling Largest Largest 12.75% 75-100% economy in country in ownership ownership Southeast Asia1 the world 2 BBB/ Baa2 ~ 33GW Country’s 2020 electricity rating by S&P production4 and Moodys3 WAPSALIT
Slide 14: Storage market, Regulation, Pipeline update
Storage market Regulation Pipeline update COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 14 14
Slide 15: U.S. Energy Storage Market: Steep Growth Trajectory
Andover storage facility, NJ, USA 20MW/20MWh U.S. ENERGY STORAGE MARKET: STEEP GROWTH TRAJECTORY U.S. FTM cumulative storage deployment forecast (MW) 57 GW 26x 2.2 56% California GW & Texas 2020 2021 2022 2023E 2024E 2025E 2026E California Texas Nevada Arizona Hawaii New York PJM (& NJ) All Others S
Slide 16: Energy Storage
ENERGY STORAGE TARGET THE LARGEST AND MOST LUCRATIVE MARKETS: 4 California, Texas, and PJM 1 5 3 2 FOCUS ON STANDALONE ENERGY STORAGE Providing ancillary service, energy and capacity to the grid EXPANSION TO NEW REGIONS Short-term: additional markets in the U.S. Mid-term: international regions 1 55M
Slide 17: Ormat's Storage Pipeline
ORMAT’S STORAGE PIPELINE Rabbit Hill storage facility, TX, USA 10MW/10MWh 275 MW/ 740MWh 6 under development projects ~3.4GW / 11.4GWh 33 potential capacity prospects of total pipeline U.S. storage East Coast 112 pipeline Others1 275 GEOGRAPHIC WECC 275 BREAKDOWN Texas 505 IN GW California 2,205 1)
Slide 18: Energy Storage Development
ENERGY STORAGE DEVELOPMENT Stryker storage facility, NJ, USA 20MW/20MWh 82 MW/102 MWh COD of 5 new facilities YTD 155MW/380 MWh 3 new assets started construction YTD (1) See appendix for Energy Storage projects in development. COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 18
Slide 19: Segment overview, Backlog updates
Segment overview Backlog updates COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 19 19
Slide 20: Product Segment Overview
PRODUCT SEGMENT Primary provider of geothermal binary plants Suppliers of geothermal power plants 2018 – 2022 capacity, MW OVERVIEW 61% 73% Binary Ormat A market leader 1837 BINARY MW TOTAL Built approx. 190 power plants and installed approx. 3,200 MW of geothermal Kaishan 14% & REG over the years 2
Slide 21: Product Backlog
PRODUCT BACKLOG TAOM, NZ 28MW 3RD PARTIES’ CONTRACTS ~$ 192M 40.1% 94% ~$ 150M backlog increase vs. Geothermal new contracts Q3 2022 contracts signed2 Backlog recovery Geographic Breakdown 281 73% 192 10% 7% 4% 3% 3% Q3/17 Q3/18 Q3/19 Q3/20 Q3/21 Q3/22 Q3/23 New Zealand Indonesia 1) Backlog as of 9.
Slide 22: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 22 2
Slide 23: Robust Growth Plan
ROBUST GROWTH PLAN 1.9GW – 2.0GW 64% - 73% 2025 portfolio target Expected MW growth vs Driven by successful 2022 expansion efforts Significantly Accelerate increase solar storage capacity & geothermal to establish leading position in the U.S. capacity storage sector This growth plan is subject to ob
Slide 24: 2025 Growth Target by Segments
2025 GROWTH TARGET CD4 part of Mammoth complex, CA, USA 65MW BY SEGMENTS GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE 600MW-670MW YE 2025 TARGET 1,300MW-1,330MW 1,470 MWh-1,700 MWh MW ADDITION (VS 2022) 230MW-260MW 512MW-582MW MW GROWTH 21%-24% 582%-661% Change in MW growth is compared to a 1,070MW Elec
Slide 25: Ormat COD Timeline
ORMAT 190 MW Electricity: COD TIMELINE 123 MW 9 projects Energy Storage: 87 MW 6 projects +28 +190 +55 20 MW 8 43 +44 12 +10 19 +60 25 10 5 55 +13 13 Q1 2022 Q2 2022 Q3 2022 Q1 2023 Q2 2023 Q3 2023 Operating Geothermal & Solar Energy COD Energy Storage COD North Valley, NV, USA 25MW COPYRIGHT © 2023
Slide 26: Geothermal Development
GEOTHERMAL DEVELOPMENT North Valley, NV, USA 25MW Projected Expected Project PPA Capacity (MW) COD U.S - North Valley 25 Under U.S. – Dixie Valley 6 development: U.S - Heber Complex 8 94 MW from Guatemala – Zunil 5 2024 6 projects U.S – Beowawe Repowering 6 Q2 2024 Indonesia – Ijen 15(1) Q
Slide 27: Geothermal Development
GEOTHERMAL DEVELOPMENT Indonesia Region Location # of sites Nevada 20 39 California 3 prospects U.S. Oregon 2 Utah 2 New Mexico 1 Guatemala 2 CENTRAL AMERICA Honduras 1 AFRICA Ethiopia 4 Madagascar 1 New Zealand 1 ASIA PACIFIC Indonesia 2 Commence commercial operation was compiled COPYRIGHT © 2023 O
Slide 28: Solar Development
SOLAR DEVELOPMENT Projected Expected Project Capacity PPA COD (MW) U.S. - Brady Solar 6 Under development: U.S. - Steamboat Solar 7 Q4 2023 79 MW from U.S. – Steamboat Hills Solar 4 Q4 2023 6 projects U.S. – North Valley Solar 6 H1 2024 U.S. – Beowawe Solar 6 Q2 2024 U.S. – McGinness Hills
Slide 29: Energy Storage Development
ENERGY STORAGE DEVELOPMENT Stryker storage facility, NJ, USA 20MW/20MWh Projected Projected Expected Project Capacity ITC %1 PPA MWh COD (MW) NJ - Howell 7 7 30% Merchant Under Capacity PPA development: OH – Bowling Green 12 12 40% and Merchant 275 MW/ TX - Upton 23 23 40% Merchant 740MWh NJ - Andov
Slide 30: 2023 Guidance ($M)
2023 GUIDANCE ($M) (1) Total revenues Electricity Products Storage Adjusted EBITDA 825-838 670-675 125-130 30-33 480-495 +12%-14% +6%-7% +75%-82% -3%-7% +10%-14% 1.9 GW-2.0 GW TRANSITIONING TO ACCELERATED +18%-20% GROWTH 1.16 GW CAGR 2022-2025E IN STORAGE & 1.1 GW ELECTRICITY SEGMENTS Storage Produc
Slide 31: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 31 31
Slide 32: Strong Financial Positioning
STRONG FINANCIAL POSITIONING Installed capacity growth (MW) Revenues growth ($m) 1,285 1,158 1,095 957 1,005 931 $746 $794 $719 $705 $734 $663 2018 2019 2020 2021 2022 Current 2018 2019 2020 2021 2022 LTM Geothermal REG Solar Storage Electricity Product total Adjusted EBITDA growth ($m) $467 $420 $4
Slide 33: Strong Financial Positioning
STRONG FINANCIAL POSITIONING Total Debt ($M) Net Debt ($M)1 $2,027 $1,800 $1,786 $1,908 $1,972 $1,521 $1,456 $1,268 $1,238 $1,090 $1,085 $919 2018 2019 2020 2021 2022 Q3 2023 2018 2019 2020 2021 2022 Q3 2023 Project Finance Finance liability Corporate Debt Net Debt to Capitalization (Total Equity)1
Slide 34: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 34
Slide 35: 2022-2023 Activities - What's New?
2022-2023 ACTIVITIES - WHAT’S NEW? 2022 ESG REPORT Published the 2022 ESG report, with updated ESG-aligned structure and emphasis on impact. In addition to that, we conducted ESG materiality analysis, to identify the material ESG topics for the company. CLIMATE RISKS ASSESSMENT AND TCFD Initiated cl
Slide 36: Environment and Social Highlights
HIGHLIGHTS 2.2 M tCO2e AVOIDED emissions compared to ENVIRONMENT the local grid, only in 2022 19% Absolute reduction in Scope 1 and 2 GHG emissions compared with 2019 baseline 25% Reduction in GHG emissions intensity (tCO2e/MWh) compared with 2019 baseline 30% Women in VP-level 25.3 Training hours p
Slide 37: Governance Highlights
HIGHLIGHTS COMMITMENT TO UPHOLDING THE HIGHEST STANDARDS ACROSS GOVERNANCE THE ORGANIZATION Our corporate governance practice is defined by honesty, openness and fairness We are constantly improving our governance and our level of disclosure on related topics, such as anti- corruption, executive rem
Slide 38: Attractive Investment Thesis
ATTRACTIVE INVESTMENT THESIS Strong financial positioning Robust growth potential ESG Strong balance sheet and favorable Significant, consistent Renewable asset growth leverage profile domestic growth in the U.S. supported by favorable regulation Long-term contracted International geothermal growth
Slide 39: Committed to Continued Profitable Growth
COMMITTED TO CONTINUED PROFITABLE GROWTH IR@ORMAT.COM 39
Slide 40: Air-Cooled Binary Geothermal Power Plant
AIR-COOLED BINARY GEOTHERMAL POWER PLANT COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 40
Slide 41: Payment of Principal Due by Period ($M)
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.15% Q4-2023 Year 2023 Long-term non-recourse debt & limited recourse debt 13.8 13.8 Long-term loans (full recourse) 18.3 18.3 Total $32.1 $32.1 Remaining Total 2023 2024 2025 2026 2027 Thereafter Long-term non-recourse debt & limited r
Slide 42: Capex for 2023
CAPEX FOR 2023 ACTUAL INVESTED CAPEX TOTAL CAPEX ($M) IN 9 MONTHS 2023 FOR Q4 2023 FOR 2023 Electricity Segment 327 70 397 Construction & Enhancements – fully released 168 19 187 Development enhancement, drillings and Exploration 59 20 79 Puna restoration (including drilling) 31 5 36 Olkaria recover
Slide 43: P&L Highlights
P&L HIGHLIGHTS Q3 2023 Q3 2022 YTD 2023 YTD 2022 GAAP MEASURES Revenues ($M) Electricity 157.2 152.8 482.8 466.5 Product 39.8 14.2 83.3 39.2 Energy Storage 11.0 8.8 21.9 22.9 Total Revenues 208.1 175.9 588.1 528.7 Gross Profit ($ millions) 60.0 61.1 185.6 188.6 Gross margin (%) Electricity 31.8% 36.
Slide 44: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Three Months Nine Months Ended September 30, Ended September 30, 2023 2022 2023 2022 Net income 36,332 19,826 94,304 57,564 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 22,227 20,744 63,45
Slide 45: Reconciliation of Adjusted Net Income and Adjusted EPS
RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS AND ADJUSTED EPS Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in millions, except for EPS) GAAP Net income attributable to the Company's stockholders 35.5 18.1 88.7 47.8 Impact o
Slide 46: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES September 30, 2023 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 78 Restricted cash and cash equivalents 108 Total cash and cash equivalents, marketable securities and Restricted cash (in m
Slide 47: Regulatory and Policy Drivers
REGULATORY AND POLICY DRIVERS Hinesburg storage facility, VT, USA 2MW/5MWh STATE-LEVEL ENERGY STORAGE TARGETS Oregon Nevada New York Maine Massachusetts 10 MWh1 1 GW by 2030 6 GW by 2030 400 MW by 2030 1 GW by YE 2025 CPUC2: Procure additional 15GW of new storage and demand response states have ener