Ormat posts growth with energy systems

Ormat Technologies Inc. of Reno has built a tidy business generating power from geothermal sources in Nevada and elsewhere around the world.

In recent months, however, the company has gained traction in a new field using waste heat from industrial applications to drive electric generators.

The company said last week the new business "recovered energy" in the language of engineers generated $9.2 million in revenues in the first half of this year compared with $600,000 in first half of 2005.

That's 7 percent of the company's total revenues in the first half, and accounted for much of Ormat's revenue growth in the past 12 months.

And Ormat officials have left no doubt they are pushing hard to carve out a significant piece of the recovered-energy market.

"We intend to continue to aggressively seek opportunities in recovered energy," Dita Bronicki, Ormat's president and chief executive officer, said last week.

The company is focused first on the North American market, then plans to leverage its success in the United States and Canada into sales worldwide.

Along a natural gas pipeline in North Dakota and South Dakota, for instance, Ormat is building a recovered-energy system that uses waste heat thrown off by the compressor stations that keep natural gas moving through the pipeline.

That waste heat is potentially can generate about 22 megawatts of electricity enough to serve at least 9,000 homes. Ormat is contracted to sell the production to Basin Electric Power Cooperative.

Another way that Ormat is selling the recovered-energy technology is demonstrated at a natural gas processing plant in Louisiana.

At that plant operated by Enterprise Products Partners LP, Ormat equipment captures waste heat and uses it to generate electricity used elsewhere in the plant. Some of the electricity also is sold to an electric utility in the area.

Companies that install the systems also may get federal tax breaks.

The recovered-energy business provides a third strategic leg for Ormat.

The company also owns and operates geothermal plants, making a profit on the electricity it sells to utilities, and sells the hardware for geothermal facilities to other operators.

In the first half of this year, electricity sales generated $92.5 million in revenues for Ormat while product sales totaled $31.9 million.

For the second quarter, Ormat earned $8.4 million on total revenues of $64.1 million. This compares with net of $4.1 million on revenues of $56 million a year earlier.

Ormat's electric sales will get another boost as it signed a contract a few days ago with Reno-based Sierra Pacific Resources to sell up to 60 megawatts of power generated by new geothermal plants at Carson Lake in Churchill County and Buffalo Valley in Lander County.

Bronicki said terms of the contract prohibit Ormat from disclosing the amount that Sierra Pacific is paying for the power.