Ormat reports Q2 2020 financial results

OrmatThe parent company of Puna Geothermal Venture (PGV), Ormat Technologies released its financial results for the second quarter of 2020 with additional details on its business in an investor call. Reportedly, Ormat made significant progress to bring the Puna geothermal power plant on Hawaii online. Ormat’s updates on PGV during the investor call include the following:

PGV’s recent developments:

TNG Energy Services recently assisted with installing a new wellhead, centralizer, and pack-off at Puna Geothermal Venture.

As of August 2020, Ormat continue its efforts to recommission its Puna power plant. The Company obtained all necessary permits to start operation, completed the construction of the substation and connected a new production well to the power plant. We expect to resume commercial operation during the fourth quarter with gradual increase of generation to 29MW by the end of the year, subject to on time completion of the transmission line by HELCO and additional field recovery work.

The construction of the substation was completed by Ormat with the local utility HELCO as offtaker now having to complete their part for the grid connection, which is expected in Q3 2020. The drilling of two production wells was completed, while one well blocked after flow test, one is a successful well. Cleanout and drilling of new wells continues.

Initial power generation is now expected to begin in Q4 2020 with gradual operation of 29 MW by the end of the year, all under the assumption that transmission line upgrades and field recovery is successfully achieved.

Financial Highlight Regarding PGV:

… The Company recorded business interruption insurance income of $3.3 million related to the 2018 volcanic eruption in Hawaii, which netted to zero Puna’s cost of revenues and reduced general and administrative costs by $0.6 million; In the second quarter 2019, the Company recorded business interruption insurance income of $6.8 million that resulted in a positive gross margin of $1.8 million.

Comments by CEO Doron Blachar:

This was another solid quarter of strong execution led by the improved profitably of our Electricity segment. I am extremely proud of how our team is operating through the challenging COVID-19 environment and how we were able to successfully complete the enhancement of our 19MW Steamboat Hills complex on time and make significant progress to bring Puna back online by the end of the year.

Ormat reports Q2 2020 financial results and improved profitability for electricity segment
August 6, 2020, by Alexander Richter, ThinkGeoEnergy