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What changed in ORMAT TECHNOLOGIES, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ORMAT TECHNOLOGIES, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+660 added−638 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-23)

Top changes in ORMAT TECHNOLOGIES, INC.'s 2024 10-K

660 paragraphs added · 638 removed · 492 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

198 edited+62 added−47 removed184 unchanged
Biggest changeThe following is a breakdown of the Product segment backlog amount (in $ millions) by countries as of February 22, 2024: Country Backlog Amount Percentage of Backlog New Zealand 115.0 75.8% Indonesia 8.1 5.3% Guatemala 8.1 5.3% Turkey 6.7 4.4% U.S. 5.6 3.7% Israel 2.7 1.8% Taiwan 2.5 1.6% Others 3.0 2.0% Total 151.7 100% 49 Table of Contents The following is a breakdown of the Product segment backlog by technology as of February 21, 2024: % of Total Backlog Latest Expected Completion Geothermal 93.0% 2025 Recovered Energy 5% 2024 Pumps 2.0% 2025 Operations of our Energy Storage Segment Storage Projects In addition to our Geothermal activity, we own, operate and develop energy storage projects in the United States including the following: Under operation Project Name Customer Location Size (MW) MWh Type of contract ACUA PJM NJ 1 1 Merchant Plumsted PJM NJ 20 20 Merchant Stryker PJM NJ 20 20 Merchant Hinesburg ISONE VT 2.0 5.0 Merchant Rabbit Hill ERCOT TX 10.0 10.0 Merchant Pomona SCE/CAISO CA 20.0 80.0 Capacity PPA and Merchant Vallecito CAISO and SCE CA 10.0 40.0 Capacity PPA and Merchant Tierra Buena CAISO, RCEA and VCE CA 5.0 20.0 Capacity PPA and Merchant Upton ERCOT TX 23.0 23.0 Merchant Andover PJM NJ 20.0 20.0 Merchant Howell PJM NJ 7.0 7.0 Merchant Bowling Green PJM OH 12.0 12.0 Capacity and Merchant Pomona 2 SCE/CAISO CA 20.0 40.0 Full Tolling Total 170.0 298.0 50 Table of Contents Under construction and development Project Name Customer Location Size (MW) MWh Type of contract Expected COD Bottleneck CAISO CA 80 320 Full Tolling Q2 2024 East Flemington PJM NJ 20 20 Merchant Q1 2024 Montague PJM NJ 20 20 Merchant Q1 2025 Arrowleaf SDCP CA 35 140 Full tolling H1 2025 Lower Rio ERCOT TX 60 120 Merchant/Tolling under negotiation H1 2025 Bird Dog ERCOT TX 60 120 Merchant H2 2025 Shirk CAISO CA 80 320 RA under negotiation H2 2025 Total 355.0 1,060.0 Energy Storage Pipeline For an energy storage prospect to move into the EPC phase, it requires site control, an executed interconnection agreement, permits from all authorities and a viable financial model.
Biggest changeUnder construction and development Project Name Customer Location Size (MW) MWh Type of contract Expected COD Arrowleaf SDCP CA 35 140 Full tolling Q4 2025 Lower Rio Equilibrium Energy TX 60 120 Full tolling Q2 2025 Bird Dog Equilibrium Energy TX 60 120 Full tolling Q1 2026 Shirk CAISO CA 80 320 RA under negotiation Q1 2026 Israel – High Voltage (2 projects) Israeli Electricity Authority Israel 150 600 Full tolling 2028 Total 385.0 1,300.0 Energy Storage Pipeline For an energy storage prospect to move into the EPC phase, it requires site control, an executed interconnection agreement, permits from all authorities and a viable financial model.
On average, our expenses for an initial evaluation range from approximately $10,000 (mainly in the U.S.) to $50,000 (mainly in the international prospects) including travel, chemical analyses, and data acquisition.
On average, our expenses for an initial evaluation range from approximately $10,000 (mainly in the U.S.) to $50,000 (mainly for international prospects) including travel, chemical analyses, and data acquisition.
If we conclude, based on the information considered in the initial evaluation, that the geothermal resource has potential to support a commercially viable power plant, considering various factors described below, we proceed to land rights acquisition. Land Acquisition We acquire land rights to any geothermal resources our initial evaluation indicates could potentially support a commercially viable power plant.
If we conclude, based on the information considered in the initial evaluation, that the geothermal resource has potential to support a commercially viable power plant, considering various factors described below, we proceed to land rights acquisition. Land Acquisition We acquire land rights to any geothermal resources that our initial evaluation indicates could potentially support a commercially viable power plant.
Since BLM leases do not grant to the geothermal lessee the exclusive right to use the surface of the land, BLM may grant rights to others for activities that do not unreasonably interfere with the geothermal lessee’s uses of the same land, including use, off-road vehicles, and/or wind or solar energy developments.
Since BLM leases do not grant to the geothermal lessee the exclusive right to use the surface of the land, BLM may grant rights to others for activities that do not unreasonably interfere with the geothermal lessee’s uses of the same land, including, off-road vehicles, and/or wind or solar energy developments.
Ormat has an Integrated Quality, Environment, Health, and Safety Policy ("QEHS") that sets out our general commitments towards health and safety principles at our sites and for all our stakeholders.
Ormat has an integrated Quality, Environment, Health, and Safety (QEHS) Policy that sets out our general commitments towards health and safety principles at our sites and for all our stakeholders.
A third category of permits involves the regulation of potential air emissions associated with the construction and operation of wells and power plants and surface water discharges associated with construction and operations activities. Generally, each well and plant requires a preconstruction air permit and storm water discharge permit before earthwork can commence.
The third category of permits involves the regulation of potential air emissions associated with the construction and operation of wells and power plants and surface water discharges associated with construction and operations activities. Generally, each well and plant requires a preconstruction air permit and storm water discharge permit before earthwork can commence.
Power Units for Recovered Energy-Based Power Generation We design, manufacture, and sell power units used to generate electricity from recovered energy or so-called “waste heat”.
Power Units for Recovered Energy-Based Power Generation We design, manufacture, and sell power units used to generate electricity from recovered energy or so-called “waste heat”.
FERC's regulations under PURPA allow FERC, upon request of a utility, to terminate a utility’s obligation to purchase energy from Qualifying Facilities upon a finding that Qualifying Facilities have nondiscriminatory access to: (i) independently administered, auction-based day ahead, and real time markets for electric energy and wholesale markets for long-term sales of capacity and electric energy; (ii) transmission and interconnection services provided by a FERC-approved regional transmission entity and administered under an open-access transmission tariff that affords nondiscriminatory treatment to all customers, and competitive wholesale markets that provide a meaningful opportunity to sell capacity, including long-term and short-term sales, and electric energy, including long-term, short-term, and real-time sales, to buyers other than the utility to which the Qualifying Facility is interconnected; or (iii) wholesale markets for the sale of capacity and electric energy that are at a minimum of comparable competitive quality as markets described in (i) and (ii) above.
FERC's regulations under PURPA allow FERC, 41 upon request of a utility, to terminate a utility’s obligation to purchase energy from Qualifying Facilities upon a finding that Qualifying Facilities have nondiscriminatory access to: (i) independently administered, auction-based day ahead, and real time markets for electric energy and wholesale markets for long-term sales of capacity and electric energy; (ii) transmission and interconnection services provided by a FERC-approved regional transmission entity and administered under an open-access transmission tariff that affords nondiscriminatory treatment to all customers, and competitive wholesale markets that provide a meaningful opportunity to sell capacity, including long-term and short-term sales, and electric energy, including long-term, short-term, and real-time sales, to buyers other than the utility to which the Qualifying Facility is interconnected; or (iii) wholesale markets for the sale of capacity and electric energy that are at a minimum of comparable competitive quality as markets described in (i) and (ii) above.
Indonesia The Electricity Law No. 32 of 2009 (in conjunction with Government Regulation In Lieu of Law No. 2 of 2022 on Job Creation*/Omnibus Law) is the principal regulation for the electricity industry in Indonesia which divides the industry into two broad categories: (1) electrical power provision, covering electric power generation, transmission, distribution and sales, and (2) electrical power support such as services (consulting, construction, installation, operation & maintenance, certification & training, testing etc.) and manufacture (tools, power plant equipment, cables, electrical equipment, etc.).
Indonesia The Electricity Law No. 32 of 2009 (in conjunction with Government Regulation In Lieu of Law No. 2 of 2022 on Job Creation*/Omnibus Law) is the principal regulation for the electricity industry in Indonesia which divides the industry into two broad categories: (1) electrical power provision, covering electric power generation, transmission, distribution and sales, and (2) electrical power support such as services (consulting, construction, installation, operation & maintenance, certification & training, testing etc.) and industry (manufacture of tools, power plant equipment, cables, electrical 45 equipment, etc.).
Insurance We maintain partial physical damage and business interruption insurance, including the perils of flood, volcanic eruption, earthquake and windstorm, cyber coverage, general and excess liability, pollution legal liability, control of well, drilling rigs, construction risks, as well as customary worker’s compensation and automobile, marine transportation insurance and such other commercially available insurance as is generally carried by companies engaged in similar businesses and owning similar properties in the same general areas as us.
Insurance We maintain partial physical damage and business interruption insurance, including the perils of flood, volcanic eruption, earthquake and windstorm, cyber coverage, general and excess liability, pollution legal liability, control of well, drilling rigs, construction risks, as well as customary worker’s compensation and automobile, marine transportation insurance, charterers’ liability and such other commercially available insurance as is generally carried by companies engaged in similar businesses and owning similar properties in the same general areas as us.
How We Finance Our Power Plants We have funded our power plants with different sources of liquidity such as a non-recourse or limited recourse debt, lease financing, tax monetization transactions, internally generated cash, which includes funds from operations, as well as proceeds from loans under corporate credit facilities, green convertibles corporate bonds public debt and equity offerings, senior unsecured corporate bonds, project financing and the sale of equity interests and other securities.
How We Finance Our Power Plants We have funded our power plants with different sources of liquidity such as a non-recourse or limited recourse debt, lease financing, tax monetization transactions, internally generated cash, which includes funds from operations, as well as proceeds from loans under corporate credit facilities, green convertibles corporate bonds, public debt and equity offerings, senior unsecured corporate bonds, and the sale of equity interests and other securities.
Some foreign regions and countries have also adopted active government programs designed to encourage clean renewable energy power generation such as the following countries in which we operate, sell products and/or are conducting business development activities: Europe Europe has the fourth largest geothermal power capacity, the majority of which stems from Italy and Turkey and recently small-scale projects in Germany.
Some foreign regions and countries have also adopted active government programs designed to encourage clean renewable energy power generation such as the following countries in which we operate, sell products and/or are conducting business development activities: 24 Europe Europe has the fourth largest geothermal power capacity, the majority of which stems from Italy and Turkey and recently small-scale projects in Germany.
In Indonesia, Ormat experiences competition from Kaishan, PT Pertamina Geothermal Energy, PT Star Energy, and in a recent tender from Chevron (who teamed with Pertimina) to compete for land. Impex remains active in the Japanese geothermal sector, though Ormat has not experienced any direct competition yet. Turkish developers are also focusing on international market expansion.
In Indonesia, Ormat experiences competition from Kaishan, PT Pertamina Geothermal Energy, PT Star Energy, and in a recent tender from Chevron (who teamed with Pertamina) to compete for land. Impex remains active in the Japanese geothermal sector, though Ormat has not experienced any direct competition yet. Turkish developers are also focusing on international market expansion.
Laws provide certain benefits to companies that generate power through renewable sources, including a 10-year exemption from corporate income tax and VAT on imports and customs duties, a fast track process for certain permits and a Sovereign Guaranty by the Central Government for the payments of the off-taker, the Public Utility Company, ENEE.
Laws provide certain benefits to companies that generate power through renewable sources, including a 10-year exemption from corporate income tax and VAT on imports and customs duties, a fast-track process for certain permits and a Sovereign Guaranty by the Central Government for the 46 payments of the off-taker, the Public Utility Company, ENEE.
For most of our current exploration sites in the United States, we acquire rights to use the geothermal resource through land leases with the BLM (which regulates leasehold interests in U.S. federal land), with various states, or through private leases. A summary of our typical lease terms is provided below under “Description of our Leases and Lands”.
For most of our current exploration sites in the U.S., we acquire rights to use the geothermal resource through land leases with the BLM (which regulates leasehold interests in U.S. federal land), with various states, or through private leases. A summary of our typical lease terms is provided below under “Description of our Leases and Lands”.
A fourth category of permits, required in Nevada, California, Oregon, Utah, and Idaho, includes ministerial permits such as building permits, hazardous materials storage and management permits, and pressure vessel operating permits. We are also required to obtain water rights permits in Nevada if water cooling is being used at the power plant.
The fourth category of permits, required in Nevada, California, Oregon, Utah, and Idaho, includes ministerial permits such as building permits, hazardous materials storage and management permits, and pressure vessel operating permits. We are also required to obtain water rights permits in Nevada if water cooling is being used at the power plant.
By using advanced computational fluid dynamics techniques and other computer aided design software as well as our test facilities, we continuously seek to improve power plant components, reduce operations and maintenance costs, and increase the range of our equipment and applications.
By using advanced computational fluid dynamics techniques and other computer aided design software as well as our test facilities, we continuously seek to improve power plant components, reduce operations and maintenance costs, and increase the range of our equipment and 20 applications.
Our approach to plant management emphasizes the operational autonomy of our individual plant or complex managers and staff to identify and resolve operations and maintenance issues at their respective power plants; however, each power plant or complex draws upon our available collective resources and experience, and that of our subsidiaries.
Our approach to plant management emphasizes the operational autonomy of our individual plant or complex managers and staff to identify and resolve operations and maintenance issues at their respective power plants; however, each power plant or complex draws upon our available collective resources and 29 experience, and that of our subsidiaries.
For our projects, these permits are typically issued at the state or county level. Permits are also required to manage storm water during project construction and to manage drilling mud from well construction, as well as to manage certain discharges to surface impoundment, if any.
For our projects, these permits are typically issued at the state or county level. Permits are also required to 43 manage storm water during project construction and to manage drilling mud from well construction, as well as to manage certain discharges to surface impoundment, if any.
Geothermal power is regulated by The Geothermal Law issued in 2014 (Law No 21 of 2014, as also amended by the Indonesian Omnibus Law in 2022), that endorses private participation as geothermal IPP. The Central government conducts tenders for geothermal fields, awarding Geothermal Business License for the winner.
Geothermal power is regulated by The Geothermal Law issued in 2014 (Law No 21 of 2014, as also amended by the Indonesian Omnibus Law in 2022), that endorses private participation as geothermal IPP. The Central government conducts tenders for geothermal fields, awarding a Geothermal Business License for the winner.
This collective bargaining agreement principally concerns the cost of living pay increases, length of the workday, minimum wages and insurance for work-related accidents, annual and other vacation, sick pay, and determination of severance pay, pension contributions, and other conditions of employment.
This 40 collective bargaining agreement principally concerns the cost of living pay increases, length of the workday, minimum wages and insurance for work-related accidents, annual and other vacation, sick pay, and determination of severance pay, pension contributions, and other conditions of employment.
Transmission of electricity is now undertaken by KETRACO while another company, GDC, is responsible for geothermal assessment, drilling of wells and sale of steam for electricity operations to IPPs and KenGen. Both KETRACO and GDC are wholly owned by the government of Kenya.
Transmission of electricity is undertaken by KETRACO while another company, GDC, is responsible for geothermal assessment, drilling of wells and sale of steam for electricity operations to IPPs and KenGen. Both KETRACO and GDC are wholly owned by the government of Kenya.
The costs associated with an initial evaluation vary from site to site, based on various factors, including the acreage involved and the costs, if any, of obtaining information from private databases or other sources.
The costs associated with an initial evaluation vary from site to site, based on various factors, including the acreage involved and the costs, if any, of obtaining information from private 27 databases or other sources.
In the future, we may need to obtain and maintain similar membership and eligibility status with other ISO/RTOs in order to offer such services in their respective areas.
In the future, we 44 may need to obtain and maintain similar membership and eligibility status with other ISO/RTOs in order to offer such services in their respective areas.
(9) We hold the Platanares assets, including the project’s wells, land, permits and a PPA, under a BOT structure for 15 years from the date the Platanares plant commenced commercial operation on September 26, 2017. A portion of the land on which the project is located is held by us through a lease from a local municipality.
We hold the Platanares assets, including the project’s wells, land, permits and a PPA, under a BOT structure for 15 years from September 26, 2017, the date the Platanares plant commenced commercial operation. A portion of the land on which the project is located is held by us through a lease from a local municipality. 4.
We expect to continue to explore these and other opportunities for expansion so long as they continue to meet our business objectives and investment criteria. However, we prioritize our investments based on their readiness for continued construction and expected economics and therefore we are not planning to invest in all of such projects in 2024.
We expect to continue to explore these and other opportunities for expansion so long as they continue to meet our business objectives and investment criteria. However, we prioritize our investments based on their readiness for continued construction and expected economics and therefore we are not planning to invest in all of such projects in 2025.
In addition, we are expanding our core geothermal competencies to provide high efficiency solutions for high enthalpy applications by utilizing our binary enhanced cycle and technology. • Manufacturing and Providing Products and EPC Services Related to Renewable Energy - designing, manufacturing and contracting power plants for our own use and selling to third parties power units and other generation equipment for geothermal and recovered energy-based electricity generation. • Expanding into New Technologies - leveraging our technological capabilities over a variety of renewable energy platforms, including solar power generation, energy storage and recovered energy generation.
In addition, we are expanding our core geothermal competencies to provide high efficiency solutions for high enthalpy applications by utilizing our binary enhanced cycle and technology. • Manufacturing and Providing Products and EPC Services Related to Renewable Energy — designing, manufacturing and contracting power plants for our own use and selling to third parties power units and other generation equipment for geothermal and recovered energy-based electricity generation. 18 • Expanding into New Technologies — leveraging our technological capabilities over a variety of renewable energy platforms, including enhanced geothermal systems (EGS), solar power generation, energy storage and recovered energy generation.
The up-front bonus and royalty payments vary from site to site and are based on, among other things, current market conditions. Surveys We conduct geological, geochemical, and/or geophysical surveys on the sites we acquire. These surveys are conducted incrementally considering relative value and cost, and the geologic model is updated from progressively.
The up-front bonus and royalty payments vary from site to site and are based on, among other things, current market conditions. Surveys We conduct geological, geochemical, and/or geophysical surveys on the sites we acquire. These surveys are conducted incrementally considering relative value and cost, and the geologic model is updated continuously.
We are focused on helping to create a sustainable energy infrastructure, and further an alternative energy future, where greenhouse gas emissions are reduced and the ability to access and store renewable sourced power will enable electricity grids to become more responsive, more stable, and more environmentally friendly.
We are focused on helping to create a sustainable energy infrastructure and further an alternative energy future where greenhouse gas emissions are reduced and the ability to access and store renewable sourced power, including geothermal energy, will enable electricity grids to become more responsive, more stable, and more environmentally friendly.
In addition, we have one domestic power plants located in Hawaii that is eligible for capacity payments under the respective PPAs upon reaching certain levels of generation, or subject to a capacity payment reduction if certain levels of generation are not reached.
In addition, we have one domestic power plant located in Hawaii that is eligible for capacity payments under the respective PPAs upon reaching certain levels of generation, or subject to a capacity payment reduction if certain levels of generation are not reached.
Geothermal Business License holders can conduct exploration and feasibility studies within five years and subject to two times one-year extensions, conduct well development and power plant construction and sell the electricity generated to PLN for a maximum of 30 years.
Geothermal Business License holders can conduct exploration and feasibility studies within five years and subject to two extensions of one-year each, conduct well development and power plant construction and sell the electricity generated to PLN for a maximum of 30 years.
Environmental laws and regulations may change in the future that may modify the time to receive such permits and associated costs of compliance. Our Battery Energy Storage System (BESS) projects are subject to similar permitting and regulatory compliance requirements.
Environmental laws and regulations may change in the future that may modify the time it takes to receive such permits and the associated costs of compliance. Our Battery Energy Storage System (BESS) projects are subject to similar permitting and regulatory compliance requirements.
The royalty rate set by the BLM for geothermal resources produced for the commercial generation of electricity but not sold in an arm’s length transaction is 1.75% for the first ten years of production and 3.5% thereafter.
The royalty rate set by the BLM for geothermal resources produced for the commercial generation of electricity but not sold in an arm’s length transaction is 1.75% for the first 10 years of production and 3.5% thereafter.
The practical effect of these regulations is to require owners of Qualifying Facilities that are larger than 20 MW in size to obtain market-based rate authority from FERC if they seek to sell energy or capacity other than pursuant to a contract executed on or before March 17, 2006 or pursuant to a state regulatory authority’s implementation of PURPA.
The practical effect of these regulations is to require owners of Qualifying Facilities that are larger than 20MW in size to obtain market-based rate authority from FERC if they seek to sell energy or capacity other than pursuant to a contract executed on or before March 17, 2006 or pursuant to a state regulatory authority’s implementation of PURPA.
Electrical power provision business is dominated by PLN (a state-owned enterprise), which is the sole owner of transmission and distribution assets and 91%** of the power generation assets as per 2022. Private sector participation in power generation is allowed through an IPP scheme, mostly done through tenders or direct appointment for some power sources such as geothermal.
The Electrical power provision business is dominated by PLN (a state-owned enterprise), which is the sole owner of transmission and distribution assets and 91.6%** of the power generation assets as per 2023. Private sector participation in power generation is allowed through an IPP scheme, mostly done through tenders or direct appointment for some power sources such as geothermal.
FERC has granted the request of California investor-owned utilities for a waiver of the mandatory purchase obligation for Qualifying Facilities larger than 20 MW in size. In addition, FERC recently amended its PURPA regulations to reduce the rebuttable presumption that small power production facilities in organized markets have nondiscriminatory access to markets from 20 MW to 5 MW.
FERC has granted the request of California investor-owned utilities for a waiver of the mandatory purchase obligation for Qualifying Facilities larger than 20 MW in size. In addition, FERC recently amended its PURPA regulations to reduce the rebuttable presumption that small power production facilities in organized markets have nondiscriminatory access to markets from 20MW to 5MW.
If, at the end of the extended thirty-five-year term, geothermal steam is still being produced or utilized in commercial quantities and the lands are not needed for other purposes, the geothermal lessee will have a preferential right to renew the lease under terms and conditions as the BLM deems appropriate.
If, at the end of the extended 35-year term, geothermal steam is still being produced or utilized in commercial quantities and the lands are not needed for other purposes, the geothermal lessee will have a preferential right to renew the lease under terms and conditions as the BLM deems appropriate.
As a geothermal company, Ormat focuses on niche markets where its vertical integration proves advantageous for the development of competitive baseload projects. 38 Table of Contents Product Segment In our Product segment, we face competition from power plant equipment manufacturers and system integrators as well as engineering or project management companies.
As a geothermal company, Ormat focuses on niche markets where its vertical integration proves advantageous for the development of competitive baseload projects. Product Segment In our Product segment, we face competition from power plant equipment manufacturers and system integrators as well as engineering or project management companies.
The competition occurs both at the early stages of development and when obtaining a Power Purchase Agreement (PPA). In the development stage, the Company must acquire the rights to the resource or purchase a site that is already in the planning, permitting, or construction phase. Occasionally, other geothermal developers may become customers of Ormat in the Product Segment.
The competition occurs both at the early stages of development and when obtaining a PPA. In the development stage, the Company must acquire the rights to the resource or purchase a site that is already in the 37 planning, permitting, or construction phase. Occasionally, other geothermal developers may become customers of Ormat in the Product Segment.
New Zealand In New Zealand, where we have been actively providing geothermal power plant solutions since 1988, the government’s policies to fight climate change include a net zero GHG emissions reduction target by 2050 and a renewable electricity generation target of 90% of New Zealand’s total electricity generation by 2035.
I n New Zealand , where we have been actively providing geothermal power plant solutions since 1988, the government’s policies to fight climate change include a net zero GHG emissions reduction target by 2050 and a renewable electricity generation target of 90% of New Zealand’s total electricity generation by 2035.
Prior to the expiration of the Geothermal License, the IPP can propose to extend the license for an additional 20 years. In 2021, Presidential Regulation No. 112 was enacted with the aim of accelerating Renewable Energy. This regulation replaces the basis of the renewable energy tariff from the average electricity generation basic cost to ceiling price.
Prior to the expiration of the Geothermal License, the IPP can propose to extend the license for an additional 20 years. In 2022, Presidential Regulation No. 112 was enacted with the aim of accelerating renewable energy. This regulation replaces the basis of the renewable energy tariff from the average electricity generation basic cost to a ceiling price.
The countries along the Rift Valley are at different stages of development of their respective geothermal potential. In Kenya, there are already several geothermal power plants, including our 150 MW Olkaria III complex. The Kenyan government has identified the country's untapped geothermal potential as the most suitable indigenous source of electricity.
The countries along the Rift Valley are at different stages of development of their respective geothermal potential. In Kenya, there are already several geothermal power plants, including our 150MW Olkaria III complex. The Kenyan government has identified the country's untapped geothermal potential as the most suitable indigenous source of electricity.
This Technical Norm was created to regulate all aspects of generation, connection, operation, control and commercialization of electric energy produced with renewable sources to promote and facilitate the installation of new generation plants, and to promote the connection of existing generation plants which have excess amounts of electric energy for commercialization, provided the capacity does not exceed 5 MW.
This Technical Norm was created to regulate all aspects of generation, connection, operation, control and commercialization of electric energy produced with renewable sources to promote and facilitate the installation of new generation plants, and to promote the connection of existing generation plants which have excess amounts of electric energy for commercialization, provided the capacity does not exceed 5MW.
Such insurance covering our properties extends to Ormat and/or our owned, controlled, direct or indirect affiliated or associated companies, subsidiary companies or corporations in amounts generally based upon the estimated replacement value and maximum foreseeable loss of our facilities (provided that certain perils including earthquake, volcanic eruption and flood coverage are subject to sublimit and/or annual aggregate limits depending on the type and location of the facility) and business interruption insurance coverage in an amount that also varies from location to location.
Such insurance covering our properties extends to Ormat and/or our owned, controlled, direct or indirect affiliated or associated companies, subsidiary companies or corporations in amounts generally based upon the estimated replacement value and maximum foreseeable loss of our facilities (provided that certain perils including earthquake, volcanic eruption and flood coverage are subject to sublimit and/or annual aggregate limits depending on the type and location of the facility) and business interruption insurance coverage in an amount that also varies from location to location but limited to 12 months of operation.
Honduras has also approved a Law of Incentives for Renewable Energy Projects, Decree 70-2007, further amended by Decree 138-2013, with additional incentives to solar PV projects, etc. The purpose, as in other countries of the region, is to promote the development of renewable energy power plants.
Honduras also approved a Law of Incentives for Renewable Energy Projects, Decree 70-2007, further amended by Decree 138-2013, with additional incentives such as to solar PV projects. The purpose, as in other countries of the region, is to promote the development of renewable energy power plants.
Initial Evaluation We identify and evaluate potential geothermal resources through field investigations using a robust geoscience program identified through both public and private data sources. 27 Table of Contents Our initial evaluation is usually conducted by our internal exploration team, although we might engage outside service providers for some tasks from time to time.
Initial Evaluation We identify and evaluate potential geothermal resources through field investigations using a robust geoscience program identified through both public and private data sources. Our initial evaluation is usually conducted by our internal exploration team, although we might engage outside service providers for some tasks from time to time.
Diversity Initiatives We strive to provide a diverse and inclusive working environment where people are respected and feel a sense of belonging regardless of race, nationality, gender, age, religion or sexual orientation. Our offices, manufacturing plants and power plants are in multiple jurisdictions and our global workforce operates across many different beliefs.
Diversity Initiatives We strive to provide a diverse and inclusive working environment where people are respected and feel a sense of belonging regardless of race, nationality, gender, age, religion or sexual orientation. Our offices, manufacturing plants and power plants are in multiple jurisdictions and our global workforce holds many different and unique beliefs.
Our Geothermal Combined Cycle technology, that we have deployed in previous years, is depicted in the diagram below. 20 Table of Contents In the conversion of geothermal energy into electricity, our technology has a number of advantages over conventional geothermal steam turbine plants.
Our Geothermal Combined Cycle technology, that we have deployed in previous years, is depicted in the diagram below. In the conversion of geothermal energy into electricity, our technology has a number of advantages over conventional geothermal steam turbine plants.
We intend to implement this strategy through: • Development and Construction of New Geothermal Power Plants - identifying new commercially viable renewable geothermal resources, to accelerate the development and construction of new zero emission geothermal power plants by entering into long-term PPAs providing stable and sustainable cash flows. • Expanding our Geographical Reach — increasing our business development activities in an effort to grow our business in the global markets in all business segments.
We intend to implement this strategy through: 17 • Development and Construction of New Geothermal Power Plants — identifying new commercially viable renewable geothermal resources, and significantly expanding and expediting our exploration drilling to accelerate the development and construction of new zero emission geothermal power plants by entering into long-term PPAs providing stable and sustainable cash flows. • Expanding our Geographical Reach — increasing our business development activities in an effort to grow our business in the global markets in all business segments.
New realms for innovation include implementation of predictive maintenance software and automation of power plants performance analysis. As part of our continuous development, we developed and patented the extraction ORC, developed extraction and injection turbines that allow bleed or injection of motive fluid between stages from or to the organic turbine.
New realms for innovation include implementation of predictive maintenance software and automation of power plants performance analysis. As part of our continuous cost reduction and performance enhancement, we developed and patented the extraction ORC, extraction and injection turbines that allow bleed or injection of motive fluid between stages from or to the organic turbine.
Outside of the United States, the majority of power generating capacity has historically been owned and controlled by governments. Since the early 1990s, however, many foreign governments have privatized their power generation industries through sales to third parties encouraging new capacity development and/or refurbishment of existing assets by independent power developers.
Outside of the U.S., the majority of power-generating capacity has historically been owned and controlled by governments. Since the early 1990s, however, many foreign governments have privatized their power generation industries through sales to third parties encouraging new capacity development and/or refurbishment of existing assets by independent power developers.
We purchase, when available, certain insurance policies to cover a portion of our book equity investment to specified political risks involved in operating in developing countries. We hold a global political risk insurance program covering the significant political risks at certain of our locations. This program is issued by the global insurers in the private sector.
We purchase, when and where available, certain insurance policies to cover a portion or all of our book equity investment to specified political risks involved in operating in developing countries. We hold a global political risk insurance program covering the significant political risks at certain of our locations. This program is issued by the global insurers in the private sector.
We continue selling power plants and products to our New Zealand customers and cooperate with other potential customers for adding geothermal power generation capacity within the coming years. In 2023, we signed an EPC contract to build the Ngatamariki 58 MW following the 59MW Tehuka 3 geothermal project contract signed in 2022.
We continue selling power plants and products to our New Zealand customers and cooperate with other potential customers for adding geothermal power generation capacity within the coming years. In 2023, we signed an EPC contract to build the Ngatamariki 58MW geothermal power plant following the 59MW Tehuka 3 geothermal project contract signed in 2022.
While we continue to evaluate global opportunities, we currently see the United States, Indonesia, Central America and New Zealand as attractive markets for our Electricity Segment. We see New Zealand, Philippines, Turkey, Chile, Indonesia, The United States and China as attractive markets for our Product Segment.
While we continue to evaluate global opportunities, we currently see the United States, Indonesia, Central America and New Zealand as attractive markets for our Electricity Segment. We see New Zealand, the Philippines, Indonesia, and the United States as attractive markets for our Product Segment.
Southern California Edison BBB (Stable) Baa1 (Stable) HELCO B- (Negative watch)) Ba3 (Stable) Sierra Pacific Power Company A- (Stable) Baa1 (Stable) Nevada Power Company A- (Stable) Baa1 (Stable) SCPPA AA+ (Stable) B1 (Positive) PG&E BB- (Positive) B1 (Positive) EDF BB- (Stable) Baa3 (Stable) The credit ratings of any power purchaser may change from time to time.
Southern California Edison BBB (Stable) Baa1 (Stable) HELCO B- (Negative watch) Ba3 (Stable) Sierra Pacific Power Company A- (Stable) Baa2 (Stable) Nevada Power Company A- (Stable) Baa1 (Stable) SCPPA AA+ (Stable) Stable PG&E BB (Positive) Ba1 (Positive) EDF BBB (Positive) Baa1 (Stable) The credit ratings of any power purchaser may change from time to time.
These federal and local land use approvals typically impose conditions and restrictions on the construction, scope and operation of geothermal projects. 44 Table of Contents The second category of permitting focuses on the installation and use of the geothermal wells themselves.
These federal and local land use approvals typically impose conditions and restrictions on the construction, scope and operation of geothermal projects. The second category of permitting focuses on the installation and use of the geothermal wells themselves.
In the near term, however, we expect that the substantial majority of our revenues will continue to be generated from our traditional electrical utility customer base for the Electricity segment. • Maintaining a Prudent and Flexible Capital Structure - we have various financing structures in place, including non-recourse project financings, green convertible bonds, the sale of differential membership interests and equity interests in certain subsidiaries, as well as revolving credit facilities and term loans.
In the near term, however, we expect that the majority of our revenues will continue to be generated from our traditional electrical utility customer base for the Electricity segment. • Maintaining a Prudent and Flexible Capital Structure — we have various financing structures in place, including non-recourse project financings, green convertible bonds, the sale of differential membership interests and equity interests in certain subsidiaries, the sale and/or transfer of tax credits available to our projects, as well as revolving credit facilities and term loans.
In addition, our technology allows for better load following than conventional steam turbines, requires no water treatment (since it is air cooled and organic fluid motivated), and does not require the continuous presence of a licensed steam boiler operator on site.
In addition, our technology allows for better load following than conventional steam turbines, requires no water treatment (since it is air-cooled and organic fluid motivated), and does not require the continuous presence of a licensed steam boiler operator on site. 21 Our REG technology is depicted in the diagram below.
Regulation of the Electric Utility Industry in the United States The following is a summary overview of the electric utility industry and applicable federal and state regulations and should not be considered a full statement of the law or all issues pertaining thereto.
Regulation of the Electric Utility Industry in the U.S. The following is a summary overview of the electric utility industry and applicable federal and state regulations and should not be considered a full statement of the law or all issues pertaining thereto.
The Solar PV facility is presented separately in the table above. 6. Tungsten Mountain is a hybrid geothermal and solar power plant that uses the solar energy for geothermal power plant auxiliary power. The Solar PV facilities are presented separately in the table above. 7. We own 60% and Enbridge owns 40% of the Neal Hot Springs power plant. 8.
This is a hybrid geothermal and solar power plant that uses the solar energy for geothermal power plant auxiliary power. The solar PV facilities are presented separately in the table above. 6. We own 60% and Enbridge owns 40% of the Neal Hot Springs power plant. 7.
Involvement in continuous innovation by research and development efforts aimed at enhancing the efficiency of our operations. In addition, we recognize the importance of Corporate Venture Capital (CVC) in acquiring or investing in companies with integration and technological capabilities that complement our existing expertise.
Involvement in continuous innovation by research and development efforts aimed at enhancing the efficiency of our operations, including through the use of AI technologies. In addition, we recognize the importance of corporate venture capital in acquiring or investing in companies with integration and technological capabilities that complement our existing expertise.
Hazardous materials are also used in our equipment manufacturing operations in Israel. 45 Table of Contents Although we are not aware of any mismanagement of these materials, including any mismanagement prior to the acquisition of some of our power plants that has materially impaired any of the power plant sites, any disposal or release of these materials onto the power plant sites, other than by means of permitted injection wells, could lead to contamination of the environment and result in material cleanup requirements or other responsive obligations under applicable environmental laws.
Although we are not aware of any mismanagement of these materials, including any mismanagement prior to the acquisition of some of our power plants that has materially impaired any of the power plant sites, any disposal or release of these materials onto the power plant sites, other than by means of permitted injection wells, or could lead to contamination of the environment and result in material cleanup requirements or other responsive obligations under applicable environmental laws.
The generating capacity of certain of our power plants and complexes listed below has been updated from our 2021 disclosure to reflect changes in the resource temperature and other factors that impact resource capabilities: Type Region Plant Ownership (1) Generating capacity (MW) (2) PPA Tenor Capacity Factor Geothermal California Ormesa Complex 100% 36 19 Heber Complex 100% 91 10 81% Mammoth Complex 100% 65 13 Brawley 100% 7 8 West Nevada Steamboat Complex 100% 79 (4) 19 83% Brady Complex 100% 24 (5) 26 East Nevada Tuscarora 100% 17 (3) 9 Jersey Valley 100% 8 9 McGinness Hills 100% 146 15 Don A.
The generating capacity of certain of our power plants and complexes listed below has been updated from our 2023 disclosure to reflect changes in the resource temperature and other factors that impact resource capabilities: Type Region Plant Ownership (1) Generating capacity (MW) (2) PPA Tenure Capacity Factor (3) Geothermal California Ormesa Complex 100% 36 18 86% Heber Complex 100% 91 18 Mammoth Complex 100% 65 14 Brawley 100% 7 7 West Nevada Steamboat Complex (5) 100% 79 22 83% Brady Complex (5) 100% 24 25 13 Type Region Plant Ownership (1) Generating capacity (MW) (2) PPA Tenure Capacity Factor (3) East Nevada Tuscarora 100% 17 9 81% (13) Jersey Valley 100% 8 8 McGinness Hills 100% 146 14 Don A.
How We Sell Electricity In the United States, our purchasers are typically investor-owned electric utility companies or electric cooperatives including public owned utilities, and more recently, CCAs. Outside of the United States, our purchasers are either state-owned utilities or privately-owned-entities. We typically operate our facilities under rights granted to us by a governmental agency pursuant to a concession agreement.
How We Sell Electricity In the U.S., our purchasers are investor-owned or publicly owned utilities, including electric cooperatives, and, more recently, CCAs. Outside of the U.S., our purchasers are either state-owned utilities or privately-owned entities and we typically operate our facilities under rights granted to us by a governmental agency pursuant to a concession agreement.
In 2023, our geothermal and REG power plants generated at a capacity factor of 84% and 38%, respectively, which is higher than the 20%-30% capacity factor typically generated in wind and solar projects. 12 Table of Contents The table below summarizes certain key non-financial information relating to our power plants and complexes as of February 23, 2024.
In 2024, our geothermal and REG power plants generated at a capacity factor of 84%% and 70%%, respectively, which is higher than the 20%-30% capacity factor typically generated in wind and solar projects. The table below summarizes certain key non-financial information relating to our power plants and complexes as of February 25, 2025.
Our customers include contractors and geothermal plant owners and operators. The power units are usually paid for in installments, in accordance with milestones set forth in the supply agreement. We also provide the purchaser with spare parts (either upon their request or our recommendation). We provide the purchaser with at least a 12-month warranty for such products.
The power units are usually paid for in installments, in accordance with milestones set forth in the supply agreement. We also provide the purchaser with spare parts (either upon their request or our recommendation). We provide the purchaser with at least a 12-month warranty for such products.
Monterey Bay, SCPPA and SVCE G-1 and G-3 - 2034 CD4 - 2047 G-2 plant - 2027 McGinness Hills Complex 146 Geothermal air cooled binary system About 5.5°F per year Nevada Power Company and SCPPA. Phases 1 and 2 - 2033 Phase 3 - 2043.
Monterey Bay, SCPPA and SVCE G-1 and G-3 - 2033 CD4 - 2047 G-2 plant - 2037 McGinness Hills Complex (7) 146 Geothermal air-cooled binary system 5°F to 6°F per year Nevada Power Company and SCPPA. Phases 1 and 2 - 2033 Phase 3 - 2043.
On August 25,2, 20214 CNEE issued a resolution that approved the Technical Norms for the Connection, Operation, Control and Commercialization of the Renewable Distributed Generation and Self-producers Users with Exceeding Amounts of Energy.
In August 2024 CNEE issued a resolution that approved the Technical Norms for the Connection, Operation, Control and Commercialization of the Renewable Distributed Generation and Self-producers Users with Exceeding Amounts of Energy.
The increase in the 2023 backlog is mainly related to the continued recovery and the signing of a new large EPC contract in New Zealand during 2023 and the Ijen project.
The increase in the 2024 backlog is mainly related to the continued recovery and the signing of a new large EPC contract in New Zealand during 2024 and the Dominica BOT project.
We own 63.75%, CDC owns 21.25% and Sageos owns 15.0% of the Bouillante power plant. 14. The OREG power plants are not operating at full capacity due to low run time of the compressor stations that serves as the power plants heat source.
We own 63.75%, CDC owns 21.25% and Sageos owns 15.0% of the Bouillante power plant. 12. The OREG power plants are not operating at full capacity due to low run time of the compressor stations that serves as the power plants heat source. This has resulted in lower power generation. 13.
At present, the Law of the Electrical Industry and the Laws of Incentives for Renewable Energy Projects are still in force. 48 Table of Contents Operations of our Product Segment Power Units for Geothermal Power Plants We design, manufacture, and sell power units for geothermal electricity generation, which we refer to as OECs.
At present, the Law of the Electrical Industry and the Laws of Incentives for Renewable Energy Projects are still in force. Operations of our Product Segment Power Units for Geothermal Power Plants We design, manufacture, and sell power units for geothermal electricity generation, which we refer to as OECs. Our customers include contractors and geothermal plant owners and operators.
According to the multi-annual energy program (PPE) for Guadeloupe, the island aims to reach total energy independence by 2030. The program outlines the development schedule with an emphasis on solar, wind and geothermal growth for the years 2023-2026.
According to the multi-annual energy program (PPE) for Guadeloupe, the island aims to reach total energy independence by 2030. The program outlines the development schedule with an emphasis on solar, wind and geothermal growth for the years 2023-2026. The PPE also predicts a geothermal installed capacity of 78MW by 2028.
PURPA PURPA and FERC's regulations thereunder exempt owners of small power production Qualifying Facilities that use geothermal resources as their primary source and other Qualifying Facilities that are 30 MW or under in size from regulation under the PUHCA 2005, from many provisions of the FPA and from state laws relating to the financial, organization and rate regulation of electric utilities.
PURPA PURPA and FERC's regulations thereunder exempt owners of certain Qualifying Facilities, including small power production facilities that use geothermal resources as their primary energy source, from regulation under the PUHCA 2005, from many provisions of the FPA and from state laws relating to the financial, organization and rate regulation of electric utilities.
We own and operate several grid-scale BESS facilities, where revenues are derived from selling energy, capacity and/or ancillary services in merchant markets like PJM Interconnect, ISO New England, ERCOT and CAISO.
We currently own and operate 16 grid-scale BESS facilities, where revenues are derived from selling energy, capacity and/or ancillary services in merchant markets like PJM, ISO-NE, ERCOT and CAISO.
Our current land position is comprised of various leases, concessions and private land for geothermal resources in 42 prospects across the western United States, Latin America and Africa.
Our current land position is comprised of various leases, concessions and private land for geothermal resources in 44 prospects across the western U.S., Latin America and Africa.
In any given year, the actual power generation of a particular power plant may differ from that power plant’s generating capacity due to variations in ambient temperature, the availability of the geothermal resource, and operational issues affecting performance during that year.
We determine the generating capacity of these power plants by taking into account resource and power plant capabilities. In any given year, the actual power generation of a particular power plant may differ from that power plant’s generating capacity due to variations in ambient temperature, the availability of the geothermal resource, and operational issues affecting performance during that year.
We continue to evaluate investment opportunities in companies with innovative technology or product offerings for renewable energy and energy storage solutions. 22 Table of Contents Market Opportunities Geothermal Market Opportunities Renewable energy offers a sustainable solution to two major global issues: climate change and unpredictable commodity costs.
We continue to evaluate investment opportunities in companies with innovative technology or product offerings for renewable energy and energy storage solutions Market Opportunities Geothermal Market Opportunities Renewable energy offers a sustainable solution to several global issues: climate change, grid volatility, and unpredictable commodity costs.
The vast majority of Ormat’s geothermal projects are in California, Nevada, and Hawaii, all of which have the most stringent RPS programs in the country. Ormat sees the impact of RPS and climate legislation as a significant driver to expanding existing power plants and building new renewable projects. States also provide incentives to geothermal energy producers.
Additionally, three states and one territory have set voluntary renewable energy goals. The vast majority of Ormat’s geothermal projects are in California, Nevada, and Hawaii, all of which have the most stringent RPS programs in the country. Ormat sees the impact of RPS and climate legislation as a significant driver to expanding existing power plants and building new renewable projects.
The loss of any single patent would not have a material effect on our business or results of operations. Research and Development We conduct research and development activities intended to improve plant performance, reduce costs, and increase the breadth of our product offerings.
The remaining terms of our issued patents range from one year to 16 years. The loss of any single patent would not have a material effect on our business or results of operations. Research and Development We conduct research and development activities intended to improve plant performance, reduce costs, and increase the breadth of our product offerings.
In the United States we hold 33 prospects: • 22 prospects in Nevada • 4 prospects in California • 2 in Oregon • 4 in Utah • 1 in New Mexico Outside the U.S. we hold 9 prospects: • 2 prospects in Indonesia • 4 prospects Ethiopia • 2 prospects in Guatemala • 1 prospect in Honduras Competition Electricity Segment Ormat’s Electricity Segment competes with geothermal power plant operators, other renewable energy providers, and other geothermal developers.
In the U.S. we hold 31 prospects: • 21 prospects in Nevada • 4 prospects in California • 2 prospects in Oregon • 3 prospects in Utah • 1 in New Mexico Outside the U.S. we hold 13 prospects: • 5 prospects in Indonesia • 4 prospects Ethiopia • 2 prospects in Guatemala • 1 prospect in Honduras • 1 prospect in New Zealand Competition Electricity Segment Ormat’s Electricity Segment competes with geothermal power plant operators, other renewable energy providers, and other geothermal developers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe market price of our common stock may be highly volatile and may fluctuate substantially due to many factors, including: • actual or anticipated fluctuations in our results of operations including as a result of seasonal variations in our Electricity segment-based revenues or variations from year-to-year in our Product segment-based revenues; • variance in our financial performance from the expectations of market analysts; • conditions and trends in the end markets we serve, and changes in the estimation of the size and growth rate of these markets; • our ability to integrate acquisitions; • announcements of significant contracts by us or our competitors; • changes in our pricing policies or the pricing policies of our competitors; • restatements of historical financial results and changes in financial forecasts; • loss of one or more of our significant customers; • legislation; • changes in market valuation or earnings of our competitors; • the trading volume of our common stock; • the trading of our common stock on multiple trading markets, which takes place in different currencies and at different times; and • general economic conditions. 74 Table of Contents In addition, the stock market in general, and the NYSE and the market for energy companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected.
Biggest changeThe price of our common stock has in the past and may in the future fluctuate substantially, and your investment may decline in value. 69 The market price of our common stock has in the past and may in the future be highly volatile and may fluctuate substantially due to many factors, including: • actual or anticipated fluctuations in our results of operations including as a result of seasonal variations in our Electricity segment-based revenues or variations from year-to-year in our Product segment-based revenues; • variance in our financial performance from the expectations of market analysts; • conditions and trends in the end markets we serve, and changes in the estimation of the size and growth rate of these markets; • our ability to integrate acquisitions; • announcements of significant contracts by us or our competitors; • changes in our pricing policies or the pricing policies of our competitors; • restatements of historical financial results and changes in financial forecasts; • loss of one or more of our significant customers; • legislation; • changes in market valuation or earnings of our competitors; • the trading volume of our common stock; • the trading of our common stock on multiple trading markets, which takes place in different currencies and at different times; and • general economic conditions.
Finally, political conditions within Israel could affect our operations or negatively impact the business environment in Israel due to reluctance of foreign investors to invest or conduct business in Israel, increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in securities markets, adverse impacts on the labor market, and other related changes in macroeconomic conditions.
Finally, political conditions within Israel could affect our operations or negatively impact the business environment in Israel due to the reluctance of foreign investors to invest or conduct business in Israel, increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in securities markets, adverse impacts on the labor market, and other related changes in macroeconomic conditions.
It is possible that technological advances and economies of scale will further reduce the cost of alternate methods of power generation. It is also possible that energy technologies will compete with our basic premise of a firm (non-intermittent) renewable baseload power source by combining renewable technologies with energy storage to provide an alternative to firm baseload energy.
It is possible that technological advances and economies of scale will further reduce the cost of alternate methods of power generation. It is also possible that intermittent energy technologies will compete with our basic premise of a firm (non-intermittent) renewable baseload power source by combining renewable technologies with energy storage to provide an alternative to firm baseload energy.
Any changes to such public policies, or any reduction in or elimination or expiration of such government incentives, could affect us in different ways. For example, any reduction in, termination or expiration of renewable portfolio standards may result in less demand for generation from our geothermal and recovered energy-based, power plants.
Changes to such public policies, or any reduction in or elimination or expiration of such government incentives, could affect us in different ways. For example, any reduction in, termination or expiration of renewable portfolio standards may result in less demand for generation from our geothermal and recovered energy-based power plants.
For example, we may face significant challenges and risks expanding into the energy storage market (or expanding our core geothermal business), including: • our ability to compete with the large number of other companies pursuing similar business opportunities in energy storage and solar PV power generation, many of which already have established businesses in these areas and/or have greater financial, strategic, technological or other resources than we have; • our ability to obtain financing on terms we consider acceptable, or at all, which we may need, for example, to develop new projects, to obtain any technology, personnel, intellectual property, or to acquire one or more existing businesses as a platform for our expansion, or to fund internal research and development, for energy storage and solar PV electric power generation products and services; • our ability to provide energy storage services that keep pace with rapidly changing technology, customer preferences, equipment costs, increasing raw materials and transportation costs, market conditions and other factors that are unknown to us now that will impact these markets; • our ability to manage the risks and uncertainties associated with our operating storage facilities and future development of storage and geothermal projects which may operate as facilities without long-term sales agreements, including the variability of revenues and profitability of such projects; • our ability to devote the amount of management time and other resources required to implement this plan, while continuing to grow our core geothermal and recovered energy businesses; and • our ability to recruit appropriate employees and labor market challenges.
For example, we may face significant challenges and risks expanding into the energy storage market (or expanding our core geothermal business), including: • our ability to compete with the large number of other companies pursuing similar business opportunities in energy storage and solar PV power generation, many of which already have established businesses in these areas and/or have greater financial, strategic, technological or other resources than we have; • our ability to obtain financing on terms we consider acceptable, or at all, which we may need, for example, to develop new projects, to obtain any technology, personnel, intellectual property, or to acquire one or more existing businesses as a platform for our expansion, or to fund internal research and development, for energy storage and solar PV electric power generation products and services; • our ability to provide energy storage services that keep pace with rapidly changing technology, customer preferences, equipment costs, increasing raw materials and transportation costs, market conditions and other factors that are unknown to us now that will impact these markets; • our ability to manage the risks and uncertainties associated with our operating storage facilities and future development of storage and geothermal projects which may operate as facilities without long-term sales agreements, including the variability of revenues and profitability of such projects; 50 • our ability to devote the amount of management time and other resources required to implement this plan, while continuing to grow our core geothermal and recovered energy businesses; and • our ability to recruit appropriate employees and labor market challenges.
In the event that a lease is terminated and we determine that we will need that lease once the applicable power plant is operating, we would need to enter into one or more new leases with the owner(s) of the premises that are the subject of the terminated lease(s) in order to develop geothermal resources from, or inject geothermal resources into, such premises or secure rights to alternate geothermal resources or lands suitable for injection.
In the event that a lease is terminated and we determine that we will need that lease once the applicable power plant is operating, we would need to enter into one or more new leases 55 with the owner(s) of the premises that are the subject of the terminated lease(s) in order to develop geothermal resources from, or inject geothermal resources into, such premises or secure rights to alternate geothermal resources or lands suitable for injection.
Our operations could be adversely impacted by climate change. We are susceptible to losses and interruptions caused by extreme weather conditions such as droughts, hurricanes, tsunamis, floods, wildfires, and water or other natural resource shortages, occurrences of which may increase in frequency and severity as a result of climate change.
Our operations could be adversely impacted by climate change and other extreme weather events. We are susceptible to losses and interruptions caused by extreme weather conditions such as droughts, hurricanes, tsunamis, floods, wildfires, and water or other natural resource shortages, occurrences of which may increase in frequency and severity as a result of climate change.
Environmental Protection Agency (the “EPA”) has adopted rules that, among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and reporting of GHG emissions from certain sources and implement standards directing the reduction of methane from certain facilities in the oil and gas sector.
Environmental Protection Agency (the “EPA”) has adopted rules that, among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and reporting of GHG emissions from certain sources and implement standards directing the reduction of methane from 58 certain facilities in the oil and gas sector.
Pursuant to the Energy Policy Act of 2005, FERC also has the authority to prospectively lift the mandatory obligation of a utility under PURPA to offer to purchase the electricity from a Qualifying Facility if the utility operates in a workably competitive market. Our existing PPAs between a Qualifying Facility and a utility are not affected.
Pursuant to the Energy Policy Act of 2005, FERC also has the authority to prospectively lift the mandatory obligation of a utility under PURPA to offer to purchase the electricity from a Qualifying Facility if the utility operates in a workably competitive market. Our existing PPAs between a QF and a utility are not affected.
While we have attempted to ensure that our technology and the operation of our business does not infringe other parties' patents and other intellectual property or proprietary rights, our competitors or other third parties may assert that certain aspects of our business or technology infringe upon, misappropriate or otherwise violate their intellectual property or proprietary rights.
While we have attempted to ensure that our technology and the operation of our business does not infringe on other parties' patents and other intellectual property or proprietary rights, our competitors or other third parties may assert that certain aspects of our business or technology infringe upon, misappropriate or otherwise violate their intellectual property or proprietary rights.
Our geothermal energy power plants may also suffer an unexpected decline in the capacity of their respective geothermal wells and are exposed to a risk of geothermal reservoirs not being sufficient for sustained generation of the electrical power capacity desired over time.
Our geothermal energy power plants may also suffer an unexpected decline in the capacity of their respective geothermal wells and are exposed to a risk of geothermal reservoirs not being sufficient for sustained 49 generation of the electrical power capacity desired over time.
Our continued access to capital on acceptable or favorable terms to us is necessary for the success of our growth strategy, particularly in enhancing our portfolio through M&A activities. Our attempts to obtain future financings may not be successful or on favorable terms.
Our continued access to 65 capital on acceptable or favorable terms to us is necessary for the success of our growth strategy, particularly in enhancing our portfolio through M&A activities. Our attempts to obtain future financings may not be successful or on favorable terms.
In particular, the legal and regulatory systems in the foreign jurisdictions where we operate can be characterized by one or more of the following: • Selective or inconsistent enforcement of laws or regulations, sometimes in ways that have been perceived as being motivated by political or financial considerations; • A perceived lack of judicial and prosecutorial independence from political, social and commercial forces; • A high degree of discretion on the part of the judiciary and governmental authorities; • Legal and bureaucratic obstacles and corruption; • Rapidly evolving legal systems whose systems may not always coincide with market developments.
In particular, the legal and regulatory systems in the foreign jurisdictions where we operate can be characterized by one or more of the following: • Selective or inconsistent enforcement of laws or regulations, sometimes in ways that have been perceived as being motivated by political or financial considerations; • A perceived lack of judicial and prosecutorial independence from political, social and commercial forces; • A high degree of discretion on the part of the judiciary and governmental authorities; • Legal and bureaucratic obstacles and corruption; 52 • Rapidly evolving legal systems may not always coincide with market developments.
Furthermore, attempts to enforce our intellectual property rights against third parties could also provoke these third parties to assert their own intellectual property or other rights against us, or result in a holding that invalidates or narrows the scope of our rights, in whole or in part.
Furthermore, attempts to enforce our intellectual property rights against third parties could also provoke these third parties to assert their own intellectual property or other rights against us, or result in a holding that invalidates or narrows the scope of our rights, in 60 whole or in part.
As such, our ownership of assets in joint ventures is subject to risks that may not be present with other methods of ownership, including: • we could experience an impasse on certain decisions because we do not have sole decision-making authority, which could require us to expend additional resources on resolving such impasses or potential disputes, including arbitration or litigation; 60 Table of Contents • our joint venture partners could have investment goals that are not consistent with our investment objectives, including the timing, terms and strategies for any investments in the projects that are owned by the joint ventures, which could affect decisions about future capital expenditures, major operational expenditures and retirement of assets, among other things; • our ability to transfer our interest in a joint venture to a third party may be restricted and the market for our interest may be limited; • our joint venture partners may be structured differently than us for tax purposes, and this could impact our ability to fully take advantage of federal tax incentives available for renewable energy projects; • our joint venture partners might become bankrupt, fail to fund their share of required capital contributions or fail to fulfill their obligations as a joint venture partner, which may require us to infuse our own capital into the venture on behalf of the partner despite other competing uses for such capital; and • our joint venture partners may have competing interests in our markets and investments in companies that compete directly or indirectly with us that could create conflict of interest issues.
As such, our ownership of assets in joint ventures is subject to risks that may not be present with other methods of ownership, including: • we could experience an impasse on certain decisions because we do not have sole decision-making authority, which could require us to expend additional resources on resolving such impasses or potential disputes, including arbitration or litigation; • our joint venture partners could have investment goals that are not consistent with our investment objectives, including the timing, terms and strategies for any investments in the projects that are owned by the joint ventures, 57 which could affect decisions about future capital expenditures, major operational expenditures and retirement of assets, among other things; • our ability to transfer our interest in a joint venture to a third-party may be restricted and the market for our interest may be limited; • our joint venture partners may be structured differently than us for tax purposes, and this could impact our ability to fully take advantage of federal tax incentives available for renewable energy projects; • our joint venture partners might become bankrupt, fail to fund their share of required capital contributions or fail to fulfill their obligations as a joint venture partner, which may require us to infuse our own capital into the venture on behalf of the partner despite other competing uses for such capital; and • our joint venture partners may have competing interests in our markets and investments in companies that compete directly or indirectly with us that could create conflict of interest issues.
Before the eruption in 2018, we obtained natural disasters business interruption and property damage insurance coverage of up to approximately $100 million compared to $30 million, with portions of the risk self-insured, secured in 2022 and 2023.
Before the eruption in 2018, 68 we obtained natural disasters business interruption and property damage insurance coverage of up to approximately $100 million compared to $30 million, with portions of the risk self-insured, secured in 2022 and 2023.
In addition, some of the environmental permits and governmental approvals that have been issued to the power plants contain conditions and restrictions, including restrictions or limits on emissions and discharges of pollutants and contaminants, or may have limited terms.
In addition, some of the environmental permits and governmental approvals that have been issued to the power plants contain conditions and restrictions, including restrictions or limits on emissions and discharges of pollutants and 64 contaminants, or may have limited terms.
In addition, the anticipated conversion of the Notes could depress the market price of our common stock. The fundamental change provisions of the Notes may delay or prevent an otherwise beneficial takeover attempt of us.
In addition, the anticipated conversion of the Notes could depress the market price of our common stock. 67 The fundamental change provisions of the Notes may delay or prevent an otherwise beneficial takeover attempt of us.
If, in addition to the California utilities’ waiver of the mandatory purchase obligation for QF projects that exceed 20 MW described in the risk factor above, the utilities in the other regions in which our domestic power plants operate were to be relieved of the mandatory purchase obligation, they would not be required to purchase energy from the power plant in the region under Federal law upon termination of the existing PPA or with respect to new power plants, which could materially and adversely affect our business, financial condition, future results and cash flow.
If, in addition to the California utilities’ waiver of the mandatory purchase obligation for QF projects that exceed 20MW described in the risk factor above, the utilities in the other regions in which our domestic power plants operate were to be relieved of the mandatory purchase obligation, they would not be required to purchase energy from the power plant in the region under Federal law upon termination of the existing PPA or with respect to new power plants, which could materially and adversely affect our business, financial condition, future results and cash flow.
We are experiencing intense competition in the energy storage market from independent power producers, developers, and third-party investors.
We encounter intense competition in the energy storage market. We are experiencing intense competition in the energy storage market from independent power producers, developers, and third-party investors.
Furthermore, under certain federal and states laws in the United States, we can be held liable for the cleanup of releases of hazardous substances at any of our current or former facilities or at any other locations where we arranged for disposal of those substances, even if we did not cause the release at that location or if the release complied with applicable law at the time it occurred.
Furthermore, under certain federal and states laws in the U.S., we can be held liable for the cleanup of releases of hazardous substances at any of our current or former facilities or at any other locations where we arranged for disposal of those substances, even if we did not cause the release at that location or if the release complied with applicable law at the time it occurred.
Any or all of these considerations could materially and adversely affect our business, financial condition, future results and cash flow. 65 Table of Contents If any of our domestic power plants loses its current Qualifying Facility status under PURPA, or if amendments to PURPA are enacted that substantially reduce the benefits currently afforded to Qualifying Facilities, our domestic operations could be adversely affected.
Any or all of these considerations could materially and adversely affect our business, financial condition, future results and cash flow. If any of our domestic power plants loses its current Qualifying Facility status under PURPA, or if amendments to PURPA are enacted that substantially reduce the benefits currently afforded to Qualifying Facilities, our domestic operations could be adversely affected.
Since we primarily engage in sales in those markets where there is a geothermal reservoir, any such change might adversely affect geothermal developers in those markets and, subsequently, the ability of such developers to purchase our products. Generally.
Since we primarily engage in sales in those markets where there is a geothermal reservoir, any such change might adversely affect geothermal developers in those markets and, subsequently, the ability of such developers to purchase our products. General.
Our obligation to repurchase the Notes or increase the conversion rate upon the occurrence of a make-whole fundamental change may, in certain circumstances, delay or prevent a takeover of us that might otherwise be beneficial to our stockholders. 71 Table of Contents The Capped Call Transactions may affect the value of the Notes and our common stock.
Our obligation to repurchase the Notes or increase the conversion rate upon the occurrence of a make-whole fundamental change may, in certain circumstances, delay or prevent a takeover of us that might otherwise be beneficial to our stockholders. The Capped Call Transactions may affect the value of the Notes and our common stock.
We maintain physical damage and business interruption insurance however, our business interruption and property damage insurance coverage may not be sufficient to cover all losses sustained as a result of natural disasters such as flood, volcanic eruptions, lava flows, wind and earthquake or any other insurable risk.
However, our business interruption and property damage insurance coverage may not be sufficient to cover all losses sustained as a result of natural disasters such as flood, volcanic eruptions, lava flows, wind and earthquake or any other insurable risk.
Even if a power plant does not lose its Qualifying Facility status, pursuant to regulations issued by FERC for Qualifying Facility power plants above 20 MW, if a power plant’s PPA is terminated or otherwise expires, and the subsequent sales are not made pursuant to a state’s implementation of PURPA, that power plant will become subject to FERC’s ratemaking jurisdiction under the FPA.
Even 62 if a power plant does not lose its Qualifying Facility status, pursuant to regulations issued by FERC for Qualifying Facility power plants above 20MW, if a power plant’s PPA is terminated or otherwise expires, and the subsequent sales are not made pursuant to a state’s implementation of PURPA, that power plant will become subject to FERC’s ratemaking jurisdiction under the FPA.
The PURPA and QF risks described above also are not likely to affect our Nevada and California based projects that have their PPAs with the SCPPA because SCPPA is not a regulated public utility under PURPA. 66 Table of Contents The reduction, elimination or inability to monetize government incentives could adversely affect our business, financial condition, future results and cash flows.
The PURPA and QF risks described above also are not likely to affect our Nevada and California based projects that have their PPAs with the SCPPA because SCPPA is not a regulated public utility under PURPA. The reduction, elimination or inability to monetize government incentives could adversely affect our business, financial condition, future results and cash flows.
Climate change could also affect the availability of a secure and economical supply of water, whether due to an increase in water restrictions, an impact on our ability to obtain water permits, or otherwise. Water is essential for the continued operation of certain of our power plants that use water cooling systems. Ormat monitors water risk carefully.
Climate change could also affect the availability of a secure and economical supply of water, whether due to an increase in water restrictions, an impact on our ability to obtain water permits, or otherwise. Water is essential for the continued operation of certain of our power plants that use water cooling systems. We monitor water risk carefully.
We may not be able to obtain sufficient insurance coverage to cover damages resulting from any damages to our assets and profitability including but not limited to natural disasters such as volcanic eruptions, lava flows, wind and earthquake, which could materially and adversely affect our business, operating results, and financial condition.
We may not be able to obtain sufficient insurance coverage to cover damages resulting from any damages to our assets and profitability including but not limited to natural disasters such as volcanic eruptions, lava flows, wind and earthquake, which could materially and adversely affect our business, operating results, and financial condition. We maintain physical damage and business interruption insurance.
Threats of terrorism may impact our operations in unpredictable ways and could adversely affect our business, financial condition, future results and cash flow.
Threats of terrorism and other disasters may impact our operations in unpredictable ways and could adversely affect our business, financial condition, future results and cash flow.
Moreover, FERC has the authority to modify its regulations relating to the utility’s mandatory purchase obligation under PURPA, which could result in the reduction in the purchase obligation of California and other utilities to a level below 5 MW, or the elimination of the purchase obligation.
Moreover, FERC has the authority to modify its regulations relating to the utility’s mandatory purchase obligation under PURPA, which could result in the reduction in the purchase obligation of California and other utilities to a level below 5MW, or the elimination of the purchase obligation.
Political, economic and other conditions in the emerging economies where we operate, including Israel, may subject us to greater risk than in the developed U.S. economy, which may have a materially adverse effect on our business. We have substantial operations outside of the United States, both in our Electricity segment and our Product segment.
Political, economic and other conditions in the emerging economies where we operate, may subject us to greater risk than in the developed U.S. economy, which may have a materially adverse effect on our business. We have substantial operations outside of the U.S., both in our Electricity segment and our Product segment.
The FCPA prohibits United States companies and their officers, directors, employees and agents acting on their behalf from corruptly offering, promising, authorizing or providing anything of value to foreign officials for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment.
The FCPA prohibits U.S. companies and their officers, directors, employees and agents acting on their behalf from corruptly offering, promising, authorizing or providing anything of value to foreign officials for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment.
If it is determined that a water supply risk exists that could impact projected generation levels at any plant, risk mitigation efforts are identified and evaluated for implementation. We could be negatively impacted by regulatory and other responses to climate change.
If it is determined that a water supply risk exists that could impact projected generation levels at any plant, risk mitigation efforts are identified and evaluated for implementation. We could be impacted by regulatory and other responses to climate change and other sustainability-related matters.
Construction and operation of our geothermal power plants and recovered energy-based power plants has benefited, and may benefit in the future, from public policies and government incentives that support renewable energy and enhance the economic feasibility of these projects in regions and countries where we operate.
Construction and operation of our geothermal power plants and recovered energy-based power plants has benefited, and may benefit in the future, from public policies and government incentives that support energy production (including, in certain cases, renewable energy and enhance the economic feasibility of these projects in regions and countries where we operate.
Our completion of these facilities’ development and/or enhancement is subject to substantial risks, including: • inability to secure a PPA; • inability to secure transmission services agreements; 59 Table of Contents • inability to secure the required financing; • cost increases and delays due to unanticipated shortages of adequate resources to execute the project such as equipment, material and labor; • work stoppages resulting from force majeure events including riots, strikes and weather conditions; • inability or delays in obtaining permits, licenses and other regulatory approvals; • inability to satisfactorily complete field development and testing; • failure to secure sufficient land positions for the wellfield, power plant and rights of way; • failure by key contractors and vendors to timely and properly perform, including where we use equipment manufactured by others; • inability to secure or delays in securing the required transmission line and/or capacity; • adverse environmental and geological conditions (including, but not limited to, discoveries of contamination, protected plant or animal species or habitat, archaeological or cultural resources, or inclement weather conditions); • adverse local business law; • our attention to other projects and activities, including those in the solar energy and energy storage sectors; and • changes in laws that mandate, incentivize or otherwise favor renewable energy sources.
Our completion of these facilities’ development and/or enhancement is subject to substantial risks, including: • inability to secure a PPA; • inability to secure transmission services agreements; • inability to secure the required financing; • cost increases and delays due to unanticipated shortages of adequate resources to execute the project such as equipment, material and labor; • work stoppages resulting from force majeure events including riots, strikes and weather conditions; • inability or delays in obtaining permits, licenses and other regulatory approvals; 56 • inability to satisfactorily complete field development and testing; • failure to secure sufficient land positions for the wellfield, power plant and rights of way; • failure by key contractors and vendors to timely and properly perform, including where we use equipment manufactured by others; • inability to secure or delays in securing the required transmission line and/or capacity; • adverse environmental and geological conditions (including, but not limited to, discoveries of contamination, protected plant or animal species or habitat, archaeological or cultural resources, or inclement weather conditions); • adverse local business law; • our attention to other projects and activities, including those in the solar energy and energy storage sectors; and • changes in laws that mandate, incentivize or otherwise favor renewable energy sources (for more information, see “–We could be impacted by regulatory and other responses to climate change”).
As a renewable energy solution provider, we are motivated to identify our opportunities and risks with respect to climate change and take efforts to reduce our GHG emissions and improve our energy efficiency. While we generally view this as an opportunity, uncertainty regarding nascent regulation in this area could also adversely affect us.
As a renewable energy solution provider, we are motivated to identify our opportunities and risks with respect to climate change and take efforts to reduce our GHG emissions and improve our energy efficiency. While we generally view this as an opportunity, uncertainty regarding recent regulation or reduction in incentives in this area could also adversely affect us.
Risks Related to the Company ’ s Business and Operation Our financial performance depends on the successful operation of our geothermal, REG and Solar PV power plants under the Electricity segment, as well as our Energy Storage facilities, which are subject to various operational risks.
Risks Related to the Company’s Business and Operation Our financial performance depends on the successful operation of our geothermal, REG and solar PV power plants under the Electricity segment, as well as our Energy Storage facilities, which are subject to various operational risks. Our financial performance depends on the successful operation of our geothermal, REG, and solar PV power plants.
The cost of operation and maintenance and the operating performance of our geothermal power, REG and Solar PV power plants may be adversely affected by a variety of factors, including: • regular and unexpected maintenance and replacement expenditures; • shutdowns due to the breakdown or failure of our equipment or third party equipment of the transmission serving utility; • labor disputes; • labor market risk; • the presence of hazardous materials on our power plant sites; • continued availability of cooling water supply; • catastrophic events such as fires, explosions, earthquakes, volcanic activity, landslides, floods, releases of hazardous materials, severe weather storms or other weather events (including weather conditions associated with climate change, or similar occurrences affecting our power plants or any of the power purchasers or other third parties providing services to our power plants, such as the 2018 volcanic eruption that occurred in Hawaii's Big Island that impacted our Puna project, as discussed elsewhere in this Annual Report; • the aging of power plants (which may reduce their availability and increase the cost of their maintenance); • unsuccessful augmentation of batteries or other necessary equipment; and • cyber-attacks that may interrupt the operation of our power plants.
The cost of operation and maintenance and the operating performance of our geothermal power, REG, and solar PV power plants and our storage facilities may be adversely affected by a variety of factors, including: • regular and unexpected maintenance and replacement expenditures; • shutdowns due to the breakdown or failure of our equipment or third-party equipment of the transmission serving utility; • labor disputes or collective bargaining arrangements with employees that successfully unionize; • labor market risk; • the presence of hazardous materials on our power plant sites; • continued availability of cooling water supply; • catastrophic events such as fires, explosions, earthquakes, volcanic activity, landslides, floods, releases of hazardous materials, severe weather storms or other weather events (including weather conditions associated with climate change, or similar occurrences affecting our power plants or any of the power purchasers or other third parties providing services to our power plants, such as the 2018 volcanic eruption that occurred in Hawaii's Big Island that impacted our Puna project; • the aging of power plants (which may reduce their availability and increase the cost of their maintenance); • unsuccessful augmentation of batteries or other necessary equipment; and • cyber-attacks that may interrupt the operation of our power plants.
Our global operations in countries including Kenya, Turkey, Guadeloupe, Guatemala, Honduras, Indonesia and others require us to comply with the laws and regulations of various governments and regulatory authorities outside the United States in addition to legal and regulatory requirements in the United States.
Our global operations in countries including Kenya, Turkey, Guadeloupe, Guatemala, Honduras, Indonesia and others require us to comply with the laws and regulations of various governments and regulatory authorities outside the U.S. in addition to legal and regulatory requirements in the U.S.
Responses in various countries where we have business operations to Israel ’ s ongoing military conflicts on some of its borders or future similar conflicts may adversely affect our operations and may limit our ability to produce and sell our products.
Responses in various countries where we have business operations to Israel’s ongoing military conflicts on some of its borders or future similar conflicts may adversely affect our operations and may limit our ability to produce and sell our products.
Such foreign laws or regulations may not provide the same type of legal certainty, rights, or judicial processes with respect to our contractual relationships in such countries, as are afforded to our operations in the United States.
Such foreign laws or regulations may not provide the same type of legal certainty, rights, or judicial processes with respect to our contractual relationships in such countries, as are afforded to our operations in the U.S.
In addition, we may be required by local governmental agencies to restrict our battery charging services, and in February 2021, as a result of the power crisis in Texas, we incurred $9.1 million in losses associated with our Rabbit Hill facility because ERCOT restricted us from providing battery charging services from February 16, 2021 to February 19, 2021.
In addition, we may be required by local governmental agencies to restrict our battery charging services. For example, in February 2021, as a result of the power crisis in Texas, 51 we incurred $9.1 million in losses associated with our Rabbit Hill facility because ERCOT restricted us from providing battery charging services.
The perception that we are an Israeli company could impair our business and results of operations due to the international response to Israel’s ongoing military conflicts in its boarders or future similar conflicts.
The perception that we are an Israeli company could impair our business and results of operations due to the international response to Israel’s ongoing military conflicts on its borders or future similar conflicts.
Our business development activities may not be successful and our projects under construction or facilities undergoing enhancement and repowering may encounter delays, which may impact our future growth. We are in the process of developing and constructing a number of new power plants.
Our business development activities may not be successful and our projects under construction or facilities undergoing enhancement and repowering may encounter delays, which may impact our future growth. We are routinely in the process of developing and constructing new power plants in the ordinary course of business.
For example, a lawsuit was filed by the Center for Biological Diversity and Fallon Paiute-Shoshone Tribe in 2021 that sought to revoke the BLM’s approval of the development of our Dixie Meadows geothermal power plant in Nevada.
For example, a lawsuit was filed by the Center for Biological Diversity and the Fallon Paiute-Shoshone Tribe in 2021 that sought to revoke the BLM’s approval of the development of our Dixie Meadows geothermal power plant in Nevada, which was later closed without prejudice.
The conflict could additionally result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.
Future regional conflicts could additionally result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.
In addition, we generate a significant portion of our revenue from our two largest projects, the McGinness Hills complex in East Nevada and the Olkaria III Complex in Kenya, which together accounted for approximately 27.6% of the total generating capacity of our Electricity segment in 2023.
In addition, we generate a significant portion of our revenue from our two largest projects, the McGinness Hills complex in east Nevada and the Olkaria III Complex in Kenya, which together accounted for approximately 23.7% of the total generating capacity of our Electricity segment in 2024.
In 2023, 38.5% of our total revenues were derived from international operations, and our Electricity segment international operations had higher gross profit than our U.S. operations. In 2023 a substantial portion of international revenues came from Kenya and, to a lesser extent, from Honduras, Guatemala, Guadeloupe and other countries.
In 2024, 36.6% of our total revenues were derived from international operations, and our Electricity segment international operations had higher gross profit than our U.S. operations. In 2024 a substantial portion of international revenues came from Kenya and, to a lesser extent, from Honduras, Guatemala, Guadeloupe and other countries.
In the United States, where we have a significant portion of our operations, no comprehensive climate change legislation has been implemented federally. The U.S.
In the U.S., where we have a significant portion of our operations, no comprehensive climate change legislation has been implemented federally. To date, the U.S.
We are also exposed to the credit and financial condition of SCPPA and its municipal utility members that account for 21.2% of our total revenues, as customers that buy the output from seven of our geothermal power plants.
We are also exposed to the credit and financial condition of SCPPA and its municipal utility members that account for 20.6% of our total revenues in 2024, as customers that buy the output from seven of our geothermal power plants.
Conditions in and around Israel, where the majority of our senior management and our main production and manufacturing facilities are located, including the ongoing military conflicts in Israel's borders, may adversely affect our operations and may limit our ability to produce and sell our products, and support our Electricity segment.
Conditions in and around Israel, where the majority of our senior management and our main production and manufacturing facilities are located, may adversely affect our operations and may limit our ability to produce and sell our products, and support our Electricity segment.
The operation of our subsidiaries’ geothermal power plants is subject to a variety of risks, including public health issues, such as epidemics, pandemics, and other outbreaks, as well events such as fires, explosions, earthquakes, landslides, floods, severe storms, volcanic eruptions, lava flow or other similar events.
The operation of our subsidiaries’ geothermal power plants is subject to a variety of risks, including public health issues, such as epidemics, pandemics, and other outbreaks, as well events such as fires, explosions, earthquakes, landslides, floods, severe storms, volcanic eruptions, lava flow or other similar events. Any of these events could result in a shutdown of certain of our businesses.
These two facilities accounted for 25.6% of our total revenues for the year ended December 31, 2023. Any disruption to the operation of these facilities would have a disproportionately adverse effect on our revenues and on our profitability.
These two facilities accounted for 23.5% of our total revenues for the year ended December 31, 2024. Any disruption to the operation of these facilities would have a disproportionately adverse effect on our revenues and on our profitability.
The settlement or resolution of such claims or proceedings may have a material adverse effect on us. We use appropriate means to contest litigation threatened or filed against us, but the litigation environment poses a significant business risk .
The settlement or resolution of such claims or proceedings may have a material adverse effect on us. We use appropriate means to contest or otherwise respond to litigation and/or regulatory proceedings threatened or filed against us, but the litigation and/or regulatory enforcement environments poses a significant business risk.
U.S. federal, state and international income tax law changes could adversely affect us The Company continuously monitors and examines the impact of U.S. and international tax law changes, such as the Tax Act, CARES and similar tax law changes internationally, in order to determine the impact it may have on our business.
The Company continuously monitors and examines the impact of U.S. and international tax law changes, such as the Tax Act, CARES and similar tax law changes internationally, in order to determine the impact it may have on our business.
Currently, we have geothermal projects and prospects under exploration, development or construction in the United States, as well as in Indonesia, Ethiopia, Guadeloupe and Guatemala, and we intend to pursue the development of other new plants.
Currently, we have geothermal projects and prospects under exploration, development or construction in the U.S., as well as in Indonesia, Guadeloupe, Guatemala, New Zealand and Dominica and we intend to pursue the development of other new plants.
If our project subsidiaries default on their obligations under such limited or non-recourse debt or lease financing, we may be required to make certain payments to the relevant debt holders, and if the collateral supporting such leveraged financing structures is foreclosed upon, we may lose certain of our power plants.
If our project subsidiaries default on their obligations under such limited or non-recourse debt or lease financing, we may be required to make certain payments to the relevant debt holders, and if the collateral supporting such leveraged financing structures is foreclosed upon, we may lose certain of our power plants. 66 Our power plants have generally been financed using a combination of our corporate funds and limited or non-recourse project finance debt or lease financing.
Developments in alternative technologies may materially and also adversely affect demand for battery energy storage. Our BESS projects are also subject to current permitting and regulatory compliance requirements and an evolving regulatory landscape at both the federal and state level. Our projects under development have experienced delays and] may in the future experience delays as a result of these requirements.
Our BESS projects are also subject to current permitting and regulatory compliance requirements and an evolving regulatory landscape at both the federal and state level. Our projects under development have experienced delays and may in the future experience delays as a result of these requirements.
In recent years, we have also increased our corporate recourse debt at the holding company level due to our ability to obtain improved economic terms, and in June 2022 we issued, $431.25 million aggregate principal amount of 2.50% convertible senior notes due 2027, which we refer to as the “Notes”.
In recent years, we have also increased our corporate recourse debt at the holding company level due to our ability to obtain improved economic terms, and in June 2022 we issued, $431.3 million aggregate principal amount of 2.50% convertible senior notes due 2027, and an additional $45.2 million aggregate principal amount of the same notes in July 2024.
Our foreign operations and our exposure to foreign customers that are in most cases, government owned utilities, subject us to significant political, economic and financial risks, which vary by country, and include: • changes in government policies or personnel; • changes in general economic conditions; • restrictions on currency transfer or convertibility; • the adoption or expansion of trade restrictions, the occurrence or escalation of a “trade war,” or other governmental action related to tariffs or trade agreements or policies among the governments of the United States and countries where we operate; • reduced protection for intellectual property rights in some countries; • changes in labor relations; • political instability and civil unrest, and risk of war; • terrorist acts or other similar events; • changes in the local electricity and/or geothermal markets; • difficulties enforcing our rights against a governmental agency because of the doctrine of sovereign immunity and foreign sovereignty over international operations; • breach or repudiation of important contractual undertakings by governmental entities; and • expropriation and confiscation of assets and facilities, including without adequate compensation. 56 Table of Contents Electricity Segment .
Our foreign operations and our exposure to foreign customers that are in most cases, government owned utilities, subject us to significant political, economic and financial risks, which vary by country, and include: • changes in government policies or personnel; • changes in general economic conditions; • restrictions on currency transfer or convertibility; • the adoption or expansion of trade restrictions, such as Turkey’s ban on trade with Israel, the occurrence or escalation of a “trade war,” or other governmental action related to tariffs or trade agreements or policies among the governments of the U.S. and countries where we operate (such as ones similar to the tariffs imposed by the U.S. in early 2025 on Canada and Mexico, which were subsequently paused, and on China, despite not being countries where we do business, could be illustrative of trade wars with countries where we do have operations and/or customers); 53 • reduced protection for intellectual property rights in some countries; • changes in labor relations; • political instability and civil unrest, and risk of war; • terrorist acts or other similar events; • changes in the local electricity and/or geothermal markets; • difficulties enforcing our rights against a governmental agency because of the doctrine of sovereign immunity and foreign sovereignty over international operations; • breach or repudiation of important contractual undertakings by governmental entities; and • expropriation and confiscation of assets and facilities, including without adequate compensation.
Expanding our customer base may expose us to customers with different credit profiles than our current customers. Expanding our geographic base will subject us to risks associated with doing business in new foreign countries in which we will have to learn the business and political environment.
Expanding our geographic base will subject us to risks associated with doing business in new foreign countries in which we will have to learn the business and political environment.
Liability under these laws can be joint and several. The cost of any remediation activities in connection with a spill or other release of such substances could be significant and could expose us to significant liability.
Liability under these laws can be joint and several. The cost of any remediation activities in connection with a spill or other release of such substances could be significant and could expose us to significant liability. U.S. federal, state and international income tax law changes could adversely affect us.
Integrating our acquired companies involves a number of risks that could materially and adversely affect our business, including: • failure of the acquired companies to achieve the results we expect; • inability to retain key personnel of the acquired companies; • risks associated with unanticipated events or liabilities; and • the difficulty of establishing and maintaining uniform standards, controls, procedures and policies, including accounting controls and procedures.
Integrating our acquired companies involves a number of risks that could materially and adversely affect our business, including: • failure of the acquired companies to achieve the results we expect; • inability to retain key personnel of the acquired companies; • risks associated with unanticipated events or liabilities; and • the difficulty of establishing and maintaining uniform standards, controls, procedures and policies, including accounting controls and procedures. 59 If any of our acquired companies suffers customer dissatisfaction or performance problems, this could adversely affect the reputation of our group of companies and could materially and adversely affect our business, financial condition, future results and cash flow.
In California, for example, the California Consumer Privacy Act (the “CCPA”) imposes obligations on businesses to be transparent with their data privacy practices and vests consumers with rights to access and delete the personal information held by businesses.
In California, there are obligations on businesses to be transparent with their data privacy practices and vests consumers and employees with rights to access and delete the personal information held by businesses.
The availability and continuation of these public policies and government incentives have a significant effect on the economics and viability of our development program and continued construction of new geothermal, recovered energy-based, solar PV facilities and, recently, energy storage projects.
The incentives in these jurisdictions include accelerated depreciation tax benefits, rebates, mandated feed-in tariffs and other similar incentives. The availability and continuation of these public policies and government incentives have a significant effect on the economics and viability of our development program and continued construction of new geothermal, recovered energy-based, solar PV facilities and, recently, energy storage projects.
Our failure to renew, maintain or obtain required permits or governmental approvals, including the permits and approvals necessary for operating power plants under development, construction or enhancement, could cause our operations to be limited or suspended resulting in fines under the PPA. 67 Table of Contents We may also be subject to litigation seeking to rescind or delay our receipt of environmental permits and governmental approvals.
Our failure to renew, maintain or obtain required permits or governmental approvals, including the permits and approvals necessary for operating power plants under development, construction or enhancement, could cause our operations to be limited or suspended resulting in fines under the PPA.
Any change in KPLC’s financial condition or the terms of our agreement with KPLC, may adversely affect us. In Honduras, as of December 31, 2023, the total amount overdue from ENEE was $15.7 million of which $2.5 million was collected in January and February of 2024.
In addition, KPLC recently requested more favorable rates on its existing PPAs with it. Any change in KPLC’s financial condition or the terms of our agreement with KPLC, may adversely affect us. In Honduras, as of December 31, 2024, the total amount overdue from ENEE was $16.2 million of which $2.5 million was collected in January and February of 2025.
We have shelter-in-place and work-from-home measures, government-imposed restrictions on movement and travel and other precautions taken to address the ongoing conflict and which may temporarily disrupt our management and employees’ ability to effectively perform their daily tasks. All of the foregoing factors could negatively affect operations within our Product segment or delay growth in our Electricity segment.
We have shelter-in-place and work-from-home measures, government-imposed restrictions on movement and travel and other precautions taken to address the ongoing conflict and which have temporarily and may continue to disrupt our management and employees’ ability to effectively perform their daily tasks.
Most of our geothermal resource leases are for a fixed primary term, and then continue for so long as geothermal resources are extracted in “commercial quantities” or pursuant to other terms of extension.
Most of our geothermal resource leases are for a fixed primary term, and then continue for so long as geothermal resources are extracted in “commercial quantities” or pursuant to other terms of extension. The land covered by some of our leases is undeveloped and has not yet produced geothermal resources in commercial quantities.
Although the SEC has not finalized these rules, we would expect to incur substantial additional compliance costs to the extent these or similar rules are adopted. Such compliance costs could in turn adversely effect on our business or results of operations.
While these rules are currently stayed and may eventually not go into effect, we would expect to incur substantial additional compliance costs to the extent these or similar rules are adopted. Such compliance costs could in turn adversely effect our business or results of operations.
Continued or escalated civil and political unrest and acts of terrorism in the countries in which we operate could result in our curtailing operations.
Guatemala also experienced several months of anti-government protests in 2023 and 2024. Continued or escalated civil and political unrest and acts of terrorism in the countries in which we operate could result in our curtailing operations.
If insurance premiums or deductibles were to increase in the future, if certain types of insurance coverage were to become unavailable or cost prohibitive, if we were to have to increase the percentage of our self-insured insurance coverage or if we were to experience losses in excess of, or outside the scope of, our insurance coverage, such additional costs could have a material adverse effect on our business, financial condition, results of operations and cash flows. 72 Table of Contents Risks Related to Force Majeure The existence of a prolonged force majeure event or a forced outage affecting a power plant, or the transmission systems could reduce our net income and materially and adversely affect our business, financial condition, future results and cash flow.
If insurance premiums or deductibles were to increase in the future, if certain types of insurance coverage were to become unavailable or cost prohibitive, if we were to have to increase the percentage of our self-insured insurance coverage or if we were to experience losses in excess of, or outside the scope of, our insurance coverage, such additional costs could have a material adverse effect on our business, financial condition, results of operations and cash flows .
Any such terrorist acts, environmental repercussions or disruptions or natural disasters could result in a significant decrease in revenues or significant reconstruction or remediation costs, beyond what could be recovered through insurance policies, which could have a material adverse effect on the business, financial condition, results of operations and cash flows. 73 Table of Contents Risks Related to Ownership of Our Common Stock Future equity issuances, including through our current or any future equity compensation plans, could result in dilution, which could cause the price of our shares of common stock to decline.
Any such terrorist acts, environmental repercussions or disruptions or natural disasters could result in a significant decrease in revenues or significant reconstruction or remediation costs, beyond what could be recovered through insurance policies, which could have a material adverse effect on the business, financial condition, results of operations and cash flows.
In 2023, the international operations of the Electricity segment accounted for 23% of our total revenues, but accounted for 44% of our gross profit, 63% of our net income and 36% of our EBITDA.
Electricity Segment . In 2024, the international operations of the Electricity segment accounted for 22% of our total revenues, but accounted for 39% of our gross profit, 78% of our net income and 31% of our EBITDA.
We are a multinational company and do not derive a majority of our revenues from Israel, however, the majority of our senior management and our main production and manufacturing facilities are located in Israel, approximately 26 miles from the border with the Gaza Strip.
We are a multinational company and do not derive a majority of our revenues from Israel; however, the majority of our senior management and our main production and manufacturing facilities are located in Israel, approximately 26 miles from the border with the Gaza Strip, and we receive supplies for and ship products for our Product segment via the Port of Ashdod, which is also close to the Gaza Strip and its coastline.
Our ability to meet our payment obligations under the Note, depends on our future cash flow performance. This, to some extent, is subject to general economic, financial, competitive, legislative and regulatory factors, as well as other factors that may be beyond our control.
This, to some extent, is subject to general economic, financial, competitive, legislative and regulatory factors, as well as other factors that may be beyond our control.
We currently obtain all such raw materials, commodities and equipment at prevailing market prices. We are not dependent on any one supplier and do not have any long-term agreements with any of our suppliers. Global events, such as the ongoing military conflicts at some of Israel's borders have also resulted in delays in supply and increased costs.
We currently obtain all such raw materials, commodities and equipment at prevailing market prices. We are not dependent on any one supplier and do not have any long-term agreements with any of our suppliers.
We could also face an increase in competition as a result of the energy transition, as new entrants of disruptive technologies and/or competitors, including in the solar, wind, and storage sectors, could adversely impact our ability to renew existing PPAs or sign new contracts. 61 Table of Contents In addition, the SEC proposed rules in March 2022 that would require public companies to include extensive climate-related disclosures in their SEC filings.
We could also face an increase in competition as a result of the energy transition, as new entrants of disruptive technologies and/or competitors, including in the solar, wind, and storage sectors, could adversely impact our ability to renew existing PPAs or sign new contracts.
Our primary business involves the exploration, development, and operation of geothermal energy resources. These activities are subject to uncertainties that, in certain respects, are similar to those typically associated with oil and gas exploration, development, and exploitation, such as dry holes, uncontrolled releases, and pressure and temperature decline.
These activities are subject to uncertainties that, in certain respects, are similar to those typically associated with oil and gas exploration, development, and exploitation, such as dry holes, uncontrolled releases, and pressure and temperature decline. Any of these uncertainties may increase our capital expenditures and our operating costs or reduce the efficiency of our power plants.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Audit Committee is informed of such risks through reports from our Chief Information Officer (“CIO”) on at least an annual basis. 75 Table of Contents Our Chief Information Security Officer (“CISO”), who has been a chief information security officer at Ormat for six years, is certified by the International Information System Security Certification Consortium as an Information Systems Security Management Professional (“ISSMP”), as an Information Systems Security Architecture Professional (“ISSAP”), and as a Certified Information Systems Security Professional (“CISSP”).
Biggest changeOur Chief Information Security Officer (“CISO”), who has been a chief information security officer at Ormat for seven years, is certified by the International Information System Security Certification Consortium as an Information Systems Security Management Professional (“ISSMP”), as an Information Systems Security Architecture Professional (“ISSAP”), and as a Certified Information Systems Security Professional (“CISSP”).
While we have experienced cybersecurity incidents, to date, we are not aware that we have experienced a material cybersecurity incident. The sophistication of cybersecurity threats continues to increase, and the controls and preventative actions we take to reduce the risk of cybersecurity incidents and protect our systems, including the regular testing of our cybersecurity incident response plan, may be insufficient.
While we have experienced cybersecurity 70 incidents, to date, we are not aware that we have experienced a material cybersecurity incident.The sophistication of cybersecurity threats continues to increase, and the controls and preventative actions we take to reduce the risk of cybersecurity incidents and protect our systems, including the regular testing of our cybersecurity incident response plan, may be insufficient.
In addition, new technology that could result in greater operational efficiency may further expose our computer systems to the risk of cybersecurity incidents.
In addition, new technology that could result in greater operational efficiency may further expose our computer systems to the risk of cybersecurity incidents. We may also maintain cyber liability insurance that covers certain damages caused by cybersecurity incidents.
We also contract with an external vendor to monitor alerts in real time on cybersecurity incidents.
We also contract with an external vendor to monitor alerts in real time on cybersecurity incidents. With respect to third party service providers, we obligate our vendors to adhere to privacy and cybersecurity measures.
Our Audit Committee, comprised fully of independent directors from our Board, oversees the Board’s responsibilities relating to cybersecurity risks.
Our Audit Committee, comprised fully of independent directors from our Board, oversees the Board’s responsibilities relating to cybersecurity risks. Each of our Audit Committee and Board is informed of such risks through reports from our Chief Information Officer (“CIO”) at least twice per year.
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However, there is no guarantee that adequate insurance will continue to be available at rates that we believe are reasonable or that the costs of responding to and recovering from a cybersecurity incident will be covered by insurance or recoverable in rates.
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We also restrict vendors’ access to our organizational systems through a segmented and controlled environment which is monitored by us, and perform detailed and customized risk assessments of certain vendors, including their ability to protect data from unauthorized access.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeEach of our power plants is located on property leased or owned by us or one of our subsidiaries or is a property that is subject to a concession agreement. Information and descriptions of our plants and properties are included in Item 1 — “Business”, of this Annual Report.
Biggest changeWe believe that our current offices and manufacturing facilities will be adequate for our operations as currently conducted. 71 Each of our power plants is located on property leased or owned by us or one of our subsidiaries or is a property that is subject to a concession agreement.
ITEM 2. PROPERTIES We currently own our corporate offices at 6140 Plumas Street and 6140 Sierra Center Drive in Reno, Nevada 89519. We also occupy an approximately 807,000 square foot office and manufacturing facility located in the Industrial Park of Yavne, Israel, which we lease from the Israel Land Administration. See Item 13 — “Certain Relationships and Related Transactions”.
ITEM 2. PROPERTIES Our main corporate offices are located at 6884 Sierra Center Drive in Reno, Nevada 89511 in the U.S, which property we currently own. We also occupy an approximately 807,000 square foot office and manufacturing facility located in the Industrial Park of Yavne, Israel, which we lease from the Israel Land Administration.
In Turkey, we established and leased a facility to locally produce power plant components to our local customers. We believe that our current offices and manufacturing facilities will be adequate for our operations as currently conducted.
See Item 13 — “Certain Relationships and Related Transactions”. In Turkey, we established and leased a facility to locally produce power plant components to our local customers.
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Information and descriptions of our plants and properties are included in Item 1 — “Business”.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe results of the sensitivity analysis calculations as of December 31, 2023 and 2022 are presented below: Assuming a 10% Increase in Rates Assuming a 10% Decrease in Rates As of December 31, As of December 31, Risk 2023 2022 2023 2022 Change in the Fair Value of (In thousands) Foreign Currency $ (3,191 ) $ (5,093 ) $ 3,901 $ 6,220 Foreign Currency Forward Contracts Interest Rate (754 ) (946 ) 769 965 Mizrachi Loan Interest Rate (1,090 ) — 1,127 — Mizrahi Loan 2023 Interest Rate (1,080 ) (1,493 ) 1,105 1,531 Hapoalim Loan Interest Rate (2,142 ) — 2,216 — Hapoalim 2023 Loan Interest Rate (462 ) (631 ) 473 648 HSBC Loan Interest Rate (1,067 ) (1,378 ) 1,093 1,416 Discount Loan Interest Rate (3,292 ) (4,096 ) 3,401 4,232 Financing Liability - Dixie Valley Interest Rate (3,158 ) (3,693 ) 3,271 3,832 OFC 2 LLC Senior Secured Notes ("OFC 2") Interest Rate (2,532 ) (3,178 ) 2,617 3,295 Olkaria III Loan - DFC Interest Rate — (259 ) — 268 Amatitlan Loan Interest Rate (4,593 ) (5,701 ) 4,762 5,925 Senior Unsecured Bonds Interest Rate (379 ) (527 ) 390 544 Olkaria III plant 4 - DEG 2 Interest Rate (1,334 ) (1,528 ) 1,392 1,597 Don A.
Biggest changeThe results of the sensitivity analysis calculations as of December 31, 2024 and 2023 are presented below: Assuming a 10% Increase in Rates Assuming a 10% Decrease in Rates As of December 31, As of December 31, Risk 2024 2023 2024 2023 Change in the Fair Value of (In thousands) Foreign Currency $ (700) $ (3,191) $ 2,078 $ 3,901 Foreign Currency Forward Contracts Interest Rate (2,986) — 3,180 — Bottleneck Loan Interest Rate (5,096) — 5,469 — Mammoth Senior Secured Notes Interest Rate (574) (754) 584 769 Mizrahi Loan Interest Rate (886) (1,090) 914 1,127 Mizrahi Loan 2023 97 Assuming a 10% Increase in Rates Assuming a 10% Decrease in Rates As of December 31, As of December 31, Risk 2024 2023 2024 2023 Change in the Fair Value of Interest Rate (679) (1,080) 691 1,105 Hapoalim Loan Interest Rate (1,708) (2,142) 1,762 2,216 Hapoalim 2023 Loan Interest Rate (1,295) — 1,333 — Hapoalim 2024 Loan Interest Rate (289) (462) 294 473 HSBC Loan Interest Rate (1,213) — 1,233 — HSBC Bank 2024 Loan Interest Rate (759) (1,067) 776 1,093 Discount Loan Interest Rate (599) — 617 — Discount 2024 Loan Interest Rate (851) — 871 — Discount 2024 II Loan Interest Rate (9,275) (3,292) 9,882 3,401 Financing Liability Interest Rate (2,617) (3,158) 2,704 3,271 OFC 2 LLC Senior Secured Notes Interest Rate (1,909) (2,532) 1,965 2,617 Olkaria III Loan - DFC Interest Rate (924) — 960 — DEG 4 Loan Interest Rate (3,542) (4,593) 3,661 4,762 Senior Unsecured Bonds Interest Rate (240) (379) 245 390 Olkaria III plant 4 - DEG 2 Interest Rate (197) (313) 201 321 DEG 3 Loan Interest Rate (1,142) (1,334) 1,189 1,392 DAC 1 Senior Secured Notes Interest Rate (2,491) (3,230) 2,561 3,337 Senior Unsecured Loan (Migdal) Interest Rate (835) (913) 886 971 Prudential - NV Interest Rate (583) (667) 603 691 DOE Loan Interest Rate (2,026) (2,239) 2,164 2,399 Prudential - Idaho Refinancing Interest Rate (1,517) (1,854) 1,574 1,929 Platanares Loan - DFC Loan Interest Rate (22) (151) 22 152 Commercial paper Interest Rate (17) (54) 17 55 Other long-term loans Effect of Inflation Over the last four years, although to a lesser extent during 2024, we experienced an increase in the overall operating and other costs as a result of higher inflation rates, in particular in the U.S.
Revenues attributable to our Electricity segment are derived from the sale of electricity from our power plants pursuant to long-term PPAs.
Electricity Segment Revenues attributable to our Electricity segment are derived from the sale of electricity from our power plants pursuant to long-term PPAs.
Goodwill represents the excess of the fair value of consideration transferred in the business combination transactions over the fair value of tangible and intangible assets acquired, net of the fair value of liabilities assumed and the fair value of any noncontrolling interest in the acquisitions.
Goodwill Goodwill represents the excess of the fair value of consideration transferred in the business combination transactions over the fair value of tangible and intangible assets acquired, net of the fair value of liabilities assumed and the fair value of any noncontrolling interest in the acquisitions.
In connection with this transaction, the Company entered into a guarantee in favor of the administrative agent for the benefit of the banks, pursuant to which the Company agreed to guarantee Ormat Nevada’s obligations under the credit agreement. Ormat Nevada’s obligations under the credit agreement are otherwise unsecured.
In connection with this transaction, the Company entered into a guarantee in favor of the administrative agent for the benefit of the banks, pursuant to which the Company agreed to guarantee Ormat Nevada’s obligations under the credit agreement. Ormat Nevada’s obligations under the credit agreement are otherwise unsecured.
Our exposure to such market risk is currently limited (except for 25 MW PPA for the Puna complex) because the majority of our long-term PPAs have fixed or escalating rate provisions that limit our exposure to changes in electricity prices. Our energy storage projects sell primarily on a "merchant" basis and are exposed to changes in the electricity market prices.
Our exposure to such market risk is currently limited because the majority of our long-term PPAs have fixed or escalating rate provisions that limit our exposure to changes in electricity prices, except for 25 MW PPA for the Puna complex. Our energy storage projects sell primarily on a "merchant" basis and are exposed to changes in the electricity market prices.
These include, among other things, a prohibition on: (i) creating any floating charge or any permanent pledge, charge or lien over our assets without obtaining the prior written approval of the lender; (ii) guaranteeing the liabilities of any third party without obtaining the prior written approval of the lender; and (iii) selling, assigning, transferring, conveying or disposing of all or substantially all of our assets, or a change of control in our ownership structure.
These include, among other things, a prohibition on: (i) creating any floating charge or any permanent pledge, charge or lien over our assets without obtaining the prior written approval of the lender; (ii) 89 guaranteeing the liabilities of any third-party without obtaining the prior written approval of the lender; and (iii) selling, assigning, transferring, conveying or disposing of all or substantially all of our assets, or a change of control in our ownership structure.
Such cost estimates are made by management based on prior operations and specific project characteristics and designs. If management’s estimates of total estimated costs with respect to our Product segment are inaccurate, then the percentage of completion is inaccurate resulting in an over- or under-estimate of revenue and gross margin.
Such cost estimates are made by management based on prior operations and specific project characteristics and designs. If management’s estimates of total estimated costs with respect to our Product segment are inaccurate, then the percentage of completion is inaccurate resulting in an 80 over- or under-estimate of revenue and gross margin.
In assessing the need for a valuation allowance, we estimate future taxable income, including the impacts of the enacted tax law, the feasibility of ongoing tax planning strategies and the realizability of tax credits and tax loss carryforwards. Valuation allowances related to deferred tax assets can be affected by changes in tax laws, statutory tax rates, and future taxable income.
In assessing the need for a valuation allowance, we estimate future taxable income, including the impacts of the enacted tax law, the feasibility of ongoing tax planning strategies and the realizability of tax credits and tax loss carryforwards. 82 Valuation allowances related to deferred tax assets can be affected by changes in tax laws, statutory tax rates, and future taxable income.
This liability is included in long-term liabilities in our consolidated balance sheet, because we generally do not anticipate that settlement of the liability will require payment of cash within the next 12 months. We are not able to reasonably estimate when we will make any cash payments required to settle this liability.
This liability is included in long-term liabilities in our consolidated balance sheet, because we generally do not anticipate that settlement of the liability will require payment of cash within the 93 next 12 months. We are not able to reasonably estimate when we will make any cash payments required to settle this liability.
We calculate Adjusted EBITDA as net income before interest, taxes, depreciation, amortization and accretion, adjusted for (i) mark-to-market gains or losses from accounting for derivatives not designated as hedging instruments; (ii) stock-based compensation; (iii) merger and acquisition transaction costs; (iv) gain or loss from extinguishment of liabilities; (v) cost related to a settlement agreement; (vi) non-cash impairment charges; (vii) write-off of unsuccessful exploration activities; and (viii) other unusual or non-recurring items.
We calculate Adjusted EBITDA as net income before interest, taxes, depreciation, amortization and accretion, adjusted for (i) mark-to-market gains or losses from accounting for derivatives not designated as hedging instruments; (ii) stock-based compensation; (iii) merger and acquisition transaction costs; (iv) gain or loss from extinguishment of liabilities; (v) costs related to a settlement agreement; (vi) non-cash impairment charges; (vii) write-off of unsuccessful exploration and storage activities; and (viii) other unusual or non-recurring items.
We test for impairment of our operating plants which are not operated as a complex, as well as our projects under exploration, development or construction that are not part of an existing complex, at the plant or project level.
We test for impairment of our operating plants which are not operated as a complex, as well as our projects 81 under exploration, development or construction that are not part of an existing complex, at the plant or project level.
Revenues Sources of Revenues We generate our revenues from the sale of electricity from our geothermal and recovered energy-based power plants; the design, manufacture and sale of equipment for electricity generation; the construction, installation and engineering of power plant equipment; and the sale of energy storage services and electricity from our operating energy storage facilities. Electricity Segment.
Revenues Sources of Revenues We generate our revenues from the sale of electricity from our geothermal and recovered energy-based power plants; the design, manufacture and sale of equipment for electricity generation; the construction, installation and engineering of power plant equipment; and the sale of energy storage services and electricity from our operating energy storage facilities.
The Puna Complex is currently benefiting from energy prices which are higher than the floor under the 25 MW PPA for the Puna Complex as a result of higher fuel costs that impact HELCO's avoided cost.
The Puna Complex is currently 96 benefiting from energy prices which are higher than the floor under the 25 MW PPA for the Puna Complex as a result of higher fuel costs that impact HELCO's avoided cost.
In addition, there are restrictions on dividend distributions in the event of a payment default or noncompliance with such ratios, and subject to specified carve-outs and exceptions, a negative pledge on the assets of Ormat Nevada in favor of Union Bank. As of December 31, 2023, the covenants have been met.
In addition, there are restrictions on dividend distributions in the event of a payment default or noncompliance with such ratios, and subject to specified carve-outs and exceptions, a negative pledge on the assets of Ormat Nevada in favor of Union Bank. As of December 31, 2024, the covenants have been met.
In addition, there are restrictions on dividend distributions in the event of a payment default or noncompliance with such ratios, and subject to specified carve-outs and exceptions, a negative pledge on the assets of Ormat Nevada in favor of HSBC. As of December 31, 2023, the covenants have been met.
In addition, there are restrictions on dividend distributions in the event of a payment default or noncompliance with such ratios, and subject to specified carve-outs and exceptions, a negative pledge on the assets of Ormat Nevada in favor of HSBC. As of December 31, 2024, the covenants have been met.
Consequently, we are generally unable to predict the timing of such orders for our products and may not be able to replace existing orders that we have completed with new ones. As a result, revenues from our Product segment fluctuate (sometimes extensively) from period to period. Energy Storage Segment.
Consequently, we are generally unable to predict the timing of such orders for our products and may not be able to replace existing orders that we have completed with new ones. As a result, revenues from our Product segment fluctuate (sometimes extensively) from period to period.
The sensitivity analysis involved increasing and decreasing forward rates at December 31, 2023 and 2022 by a hypothetical 10% and calculating the resulting change in the fair values. At this time, the development of our strategic plan has not exposed us to any additional market risk.
The sensitivity analysis involved increasing and decreasing forward rates at December 31, 2024 and 2023 by a hypothetical 10% and calculating the resulting change in the fair values. At this time, the development of our strategic plan has not exposed us to any additional market risk.
The IRA also includes significant tax incentives for energy and climate initiatives related to Production Tax Credits (“PTC”) and Investment Tax Credits (“ITC”), including extending ITC to energy storage projects for assets placed in service after December 31, 2022 and the ability to transfer or sell PTCs to other taxpayers.
The IRA also includes significant tax incentives for energy and climate initiatives related to Production Tax Credits (“PTC”) and Investment Tax Credits (“ITC”), including extending ITCs to energy storage projects for assets placed in service after December 31, 2022 and the ability to transfer or sell PTCs to other taxpayers.
(3) The Commercial Paper was issued for a period of 90 days and extends automatically for additional 90 day periods for up to five years, unless the Company notifies the participants otherwise or a notice of termination is provided by the participants in accordance with the provisions of the Commercial Paper Agreement.
(4) The Commercial Paper was issued for a period of 90 days and extends automatically for additional 90 day periods for up to five years, unless the Company notifies the participants otherwise or a notice of termination is provided by the participants in accordance with the provisions of the Commercial Paper Agreement.
We have utilized this cash to develop and construct power plants, fund our acquisitions, pay down existing outstanding indebtedness, and meet our other cash and liquidity needs. Based on current conditions, we believe that we have sufficient financial resources to fund our activities and execute our business plans.
We have utilized this cash to develop and construct power plants, storage facilities, fund our acquisitions, pay down existing outstanding indebtedness, and meet our other cash and liquidity needs. Based on current conditions, we believe that we have sufficient financial resources to fund our activities and execute our business plans.
We capitalize all costs associated with the acquisition, development and construction of power plant facilities. Major improvements are capitalized and repairs and maintenance (including major maintenance) costs are expensed. We estimate the useful life of our power plants to range between 15 and 30 years.
Property, Plant and Equipment We capitalize all costs associated with the acquisition, development and construction of power plant facilities. Major improvements are capitalized and repairs and maintenance (including major maintenance) costs are expensed. We estimate the useful life of our power plants to range between 15 and 30 years.
We evaluate long-lived assets, such as property, plant and equipment and construction-in-process for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of We evaluate long-lived assets, such as property, plant and equipment and construction-in-process for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
This Form 10-K for the fiscal year ended December 31, 2022 is available free of charge on the SECs website at www.sec.gov and at www.Ormat.com, by clicking “Investors” located at the top of the home page.
This Form 10-K for the fiscal year ended December 31, 2023 is available free of charge on the SECs website at www.sec.gov and at www.Ormat.com, by clicking “Investors” located at the top of the home page.
The current expiration date of the facility under this credit agreement is October 31, 2024. On December 31, 2023, the aggregate amount available under the credit agreement was $35.0 million. This credit line is limited to the issuance, extension, modification or amendment of letters of credit.
The current expiration date of the facility under this credit agreement is October 31, 2025. On December 31, 2024, the aggregate amount available under the credit agreement was $35.0 million. This credit line is limited to the issuance, extension, modification or amendment of letters of credit.
Concentration of Credit Risk Our credit risk is currently concentrated with the following major customers: Sierra Pacific Power Company and Nevada Power Company (subsidiaries of NV Energy), SCPPA and KPLC. If any of these electric utilities fail to make payments under its PPAs with us, such failure would have a material adverse impact on our financial condition .
Concentration of Credit Risk Our credit risk is currently concentrated with the following major customers: Sierra Pacific Power Company and Nevada Power Company (subsidiaries of NV Energy), SCPPA, and KPLC. If any of these electric utilities fail to make payments under their respective PPAs with us, such failure would have a material adverse impact on our financial condition.
Third-Party Debt Our third-party debt consists of (i) non-recourse and limited-recourse project finance debt or acquisition financing that we or our subsidiaries have obtained for the purpose of developing and constructing, refinancing or acquiring our various projects; (ii) full-recourse debt incurred by us or our subsidiaries for general corporate purposes; (iii) convertible senior notes issued in June 2022; (iv) commercial paper; (iv) financing liability assumed as part of the TG Geothermal Portfolio, LLC acquisition; and (v) short term revolving credit lines with banks.
Third-Party Debt Our third-party debt consists of (i) non-recourse and limited-recourse project finance debt or acquisition financing that we or our subsidiaries have obtained for the purpose of developing and constructing, refinancing or acquiring our various projects; (ii) full-recourse debt incurred by us or our subsidiaries for general corporate purposes; (iii) convertible senior notes; (iv) commercial paper; (iv) financing liability assumed as part of the TG Geothermal Portfolio, LLC acquisition; and (v) short term revolving credit lines with banks.
For additional description of our long term debt entered into subsequent to December 31, 2023, see Note 22 - Subsequent events, to our consolidated financial statements, set forth in Item 8 of this Annual Report.
For additional description of our long-term debt entered into subsequent to December 31, 2024, see Note 22 - Subsequent events, to our consolidated financial statements, set forth in Item 8 of this Annual Report.
Our short-term commercial paper, which was issued on October 23, 2023, bears an annual interest of three months SOFR +1.1%, therefore presents an exposure to interest rate volatility. The outstanding amount of the short-term commercial paper as of December 31, 2023 was $100.0 million. Our cash equivalents are subject to interest rate risk.
Additionally, our short-term commercial paper, which was issued on October 23, 2023, bears an annual interest of three months SOFR +1.1%, and therefore presents an exposure to interest rate volatility. The outstanding amount of the short-term commercial paper as of December 31, 2024 was $100.0 million. Our cash equivalents are subject to interest rate risk.
This belief is supported by the fact that in addition to KPLC's obligations under its power purchase agreement, the Company holds a support letter from the Government of Kenya that covers certain cases of KPLC non-payment (such as where caused by government actions and/or political events).
This belief is supported by the fact that in addition to KPLC's obligations under its power purchase agreement, the Company holds a support letter from the Government of Kenya that covers certain cases of KPLC non-payment (such as non-payments that are caused by government actions and/or political events).
Royalty payments, included in cost of revenues, are made as compensation for the right to use certain geothermal resources and are paid as a percentage of the revenues derived from the associated geothermal rights. Royalties constituted approximately 4.6% and 4.8% of Electricity segment revenues for the years ended December 31, 2023 and 2022, respectively.
Royalty payments, included in cost of revenues, are made as compensation for the right to use certain geothermal resources and are paid as a percentage of the revenues derived from the associated geothermal rights. Royalties constituted approximately 4.6% and 4.6% of Electricity segment revenues for the years ended December 31, 2024 and 2023, respectively.
Energy Storage Segment The principal cost of revenues attributable to our Energy Storage segment are direct costs of the BESS that we own. Direct costs include the labor associated with operations and maintenance of owned BESS.
Energy Storage Segment The principal cost of revenues attributable to our Energy Storage segment are direct costs of the BESS that we own, and depreciation and amortization. Direct costs include the labor associated with operations and maintenance of owned BESS.
The tax benefit of lower effective tax rate is reflected in the 2021 net income.
The tax benefit of lower effective tax rate is reflected in the 2021 net income. 100
We are also permitted to depreciate most of the cost of a new geothermal power plant. In cases where we claim ITC, our tax basis in the plant that is eligible for depreciation is reduced by one-half of the ITC amount. In cases where we claim the PTC, there is no reduction in the tax basis for depreciation.
We are currently permitted to depreciate most of the cost of a new geothermal power plant. In cases where we claim ITCs, our tax basis in the plant that is eligible for depreciation is reduced by one-half of the ITC amount. In cases where we claim the PTC, there is no reduction in the tax basis for depreciation.
The prices paid for electricity under the PPAs for the Mammoth Complex and the North Brawley power plant in California, the Raft River power plant in Idaho, the Neal Hot Springs power plant in Oregon and the recently acquired Dixie Valley power plant in Nevada, are higher in the months of June through September.
The prices paid for electricity under the PPAs for the Mammoth Complex 79 and the North Brawley power plant in California, the Raft River power plant in Idaho, the Neal Hot Springs power plant in Oregon and Dixie Valley power plant in Nevada, are higher in the months of June through September.
In the future, if there is insufficient evidence that we will be able to generate sufficient future taxable income in the United States, we may be required to record a valuation allowance, resulting in income tax loss in our Consolidated Statement of Operations. In the ordinary course of business, there can be inherent uncertainty in quantifying our income tax positions.
In the future, if there is insufficient evidence that we will be able to generate sufficient future taxable income in the U.S., we may be required to record a valuation allowance, resulting in income tax loss in our Consolidated Statement of Operations. In the ordinary course of business, there can be inherent uncertainty in quantifying our income tax positions.
Credit Agreements Credit Agreement with MUFG Union Bank Ormat Nevada has a credit agreement with MUFG Union Bank under which it has an aggregate available credit of up to $60.0 million as of December 31, 2023.The credit termination date is June 30, 2024. The facility is limited to the issuance, extension, modification or amendment of letters of credit.
Credit Agreements Credit Agreement with MUFG Union Bank Ormat Nevada has a credit agreement with MUFG Union Bank under which it has an aggregate available credit of up to $100.0 million as of December 31, 2024. The credit termination date is June 30, 2025. The facility is limited to the issuance, extension, modification or amendment of letters of credit.
Future minimum payments Future minimum payments under long-term obligations as of December 31, 2023, are detailed under the caption Contractual Obligations and Commercial Commitments, below.
Future minimum payments Future minimum payments under long-term obligations as of December 31, 2024, are detailed under the caption Contractual Obligations and Commercial Commitments, below.
EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States, or U.S.
EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the U.S., or U.S.
Liquidity Impact of Uncertain Tax Positions As discussed in Note 16 - Income Taxes, to our consolidated financial statements set forth in Item 8 of this Annual Report, we have a liability associated with unrecognized tax benefits and related interest and penalties in the amount of approximately $8.7 million as of December 31, 2023.
Liquidity Impact of Uncertain Tax Positions As discussed in Note 16 - Income Taxes, to our consolidated financial statements set forth in Item 8 of this Annual Report, we have a liability associated with unrecognized tax benefits and related interest and penalties in the amount of approximately $6.3 million as of December 31, 2024.
In Honduras, as of December 31, 2023, the total amount overdue from ENEE was $15.7 million of which $2.5 million was collected in January and February of 2024. In addition, due to the financial situation in Honduras, the Company may experience additional delays in collection. The Company believes it will be able to collect all past due amounts in Honduras.
In Honduras, as of December 31, 2024, the total amount overdue from ENEE was $16.2 million of which $2.5 million was collected in January and February of 2025. In addition, due to the financial situation in Honduras, the Company may experience additional delays in collection. The Company believes it will be able to collect all past due amounts in Honduras.
Our Product segment foreign revenues were 94%, 90% and 88% of our total Product segment revenues for the years ended December 31, 2023, 2022 and 2021, respectively. Energy Storage Segment. Our Energy Storage segment domestic revenues were 100.0% of our total Energy storage segment revenues for years ended December 31, 2023, 2022 and 2021, respectively.
Product Segment Our Product segment foreign revenues were 94%, 94% and 90% of our total Product segment revenues for the years ended December 31, 2024, 2023 and 2022, respectively. Energy Storage Segment Our Energy Storage segment domestic revenues were 100.0% of our total Energy storage segment revenues for years ended December 31, 2024, 2023 and 2022, respectively.
Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 24, 2023, which is incorporated by reference herein .
Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 23, 2024, which is incorporated by reference herein .
Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 24, 2023, which is incorporated by reference herein .
Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 23, 2024, which is incorporated by reference herein .
These initiatives include the award of long-term contracts to independent power generators, the creation of competitive wholesale markets for selling and trading energy, capacity and related energy products and the adoption of programs designed to encourage “clean” renewable and sustainable energy sources. • In the Product segment, we see new opportunities for business in the U.S., Asia Pacific and Central and South America.
These initiatives include the award of long-term contracts to independent power generators, the creation of competitive wholesale markets for selling and trading energy, capacity and related energy products and the adoption of programs designed to encourage “clean” renewable and sustainable energy sources. • Product Segment Opportunities and Competition: In the Product segment, we believe there are new business opportunities in the U.S., Asia Pacific, New Zealand and Central and South America.
Revenues attributable to our Energy Storage segment are generated by several grid-connected BESS facilities that we own and operate from selling energy, capacity and/or ancillary services in merchant markets like PJM Interconnect, ISO New England, ERCOT and CAISO.
Energy Storage Segment Revenues attributable to our Energy Storage segment are generated by several grid-connected BESS facilities that we own and operate from selling energy, capacity and/or ancillary services in merchant markets like PJM Interconnect, ISO New England, ERCOT and CAISO or under tolling agreements that have fixed revenues.
After applying any depreciation bonus that is available, we can depreciate the remainder of our tax basis in the plant, if any, mostly over five years on an accelerated basis, meaning that more of the cost may be deducted in the first few years than during the remainder of the depreciation period.
After applying any depreciation bonus that is available, we are currently permitted to depreciate the remainder of our tax basis in the plant, if any, mostly over five years on an accelerated basis, meaning that more of the cost may be deducted in the first few years than during the remainder of the depreciation period.
See “ Cautionary Note Regarding Forward-Looking Statements. ” You should also review Item 1A — “ Risk Factors ” for a discussion of important factors that could cause actual results to differ materially from the results described herein or implied by such forward-looking statements.
See “Cautionary Note Regarding Forward-Looking Statements.” You should also review Item 1A — “Risk Factors” for a discussion of important factors that could cause actual results to differ materially from the results described herein or implied by such forward-looking statements.
Other non-operating income for the year ended December 31, 2023 is primarily attributable to $1.2 million related to a settlement and release transaction with a third party entered into in December 2023.
Other non-operating (expense), net for year ended December 31, 2023 is primarily attributable to $1.2 million related to a settlement and release transaction with a third party entered into in December 2023.
Department of Energy loan (2) 96.8 30.2 2.61 % February, 2035 Neal Hot Springs United States Prudential Capital Group Nevada Loan 30.7 23.9 6.75 % December, 2037 San Emidio United States Platanares Loan with DFC 114.7 71.7 7.02 % September, 2032 Platanares Honduras Geothermie Bouillante (3) 8.9 3.5 1.52 % March, 2026 Geothermie Bouillante Guadeloupe Geothermie Bouillante (3) 8.9 4.2 1.93 % April, 2026 Geothermie Bouillante Guadeloupe Total $ 1,015.8 $ 512.9 (1) Secured by equity interest.
Department of Energy loan (2) 96.8 27.5 2.61 February, 2035 Neal Hot Springs United States Prudential Capital Group Nevada Loan 30.7 23.0 6.75 December, 2037 San Emidio United States Platanares Loan with DFC 114.7 63.5 7.02 September, 2032 Platanares Honduras Geothermie Bouillante (3) 8.9 1.9 1.52 March, 2026 Geothermie Bouillante Guadeloupe Geothermie Bouillante (3) 8.9 2.1 1.93 April, 2026 Geothermie Bouillante Guadeloupe Total $ 1,223.5 $ 657.4 (1) Secured by equity interest.
Provisions for estimated losses relating to contracts are made in the period in which such losses are determined. Revenues generated from engineering and operating services and sales of products and parts are recorded once the service is provided or product delivered as the customer obtains control of the asset, as applicable. 85 Table of Contents • Property, Plant and Equipment.
Provisions for estimated losses relating to contracts are made in the period in which such losses are determined. Revenues generated from engineering and operating services and sales of products and parts are recorded once the service is provided or product delivered as the customer obtains control of the asset, as applicable.
Government Grants and Tax Benefits On August 16, 2022, the President of the United States signed into law the Inflation Reduction Act of 2022 (the “IRA"), which is effective for taxable years beginning after December 31, 2022. The IRA includes several tax incentives to promote climate change mitigation and clean energy, electric vehicles, battery and energy storage manufacture or purchase.
Government Grants and Tax Benefits On August 16, 2022, the then President of the U.S. signed into law the Inflation Reduction Act of 2022 (the “IRA"), which is effective for taxable years beginning after December 31, 2022. The IRA included several tax incentives to promote climate change mitigation and clean energy, electric vehicles, battery and energy storage manufacture or purchase.
EBITDA and Adjusted EBITDA include our proportionate share (12.75%) of Sarulla's EBITDA and Adjusted EBITDA, respectively. On May 2014, the Sarulla consortium (“SOL”) closed $1,170 million in financing. As of December 31, 2023, the credit facility has an outstanding balance of $796.5 million. Our proportionate share in the SOL credit facility is $101.6 million.
EBITDA and Adjusted EBITDA include our proportionate share (12.75%) of Sarulla's EBITDA and Adjusted EBITDA, respectively. On May 2014, the Sarulla consortium (“SOL”) closed $1,170 million in financing. As of December 31, 2024, the credit facility has an outstanding balance of $717.6 million. Our proportionate share in the SOL credit facility is $91.5 million.
We are pursuing the development of additional grid-connected BESS projects in multiple regions, with expected revenues coming from providing energy, capacity and/or ancillary services on a merchant basis, and/or through bilateral fixed contracts with load serving entities, investor owned utilities, publicly owned utilities and community choice aggregators.
We are pursuing the development of additional grid-connected BESS projects in multiple regions, with expected revenues coming from providing energy, capacity and/or ancillary services on a merchant basis, and/or through bilateral fixed contracts with load serving entities, investor-owned utilities, publicly owned utilities and community choice aggregators. Our management assesses the performance of our operating segments differently.
Much of this is attributable to legislative and regulatory requirements and incentives, such as state RPS and federal tax credits such as PTCs or ITCs (which are discussed in more detail in the section entitled “Government Grants and Tax Benefits” below).
This is largely due to legislative and regulatory requirements and incentives, such as state RPS and federal tax credits such as PTCs or ITCs (which are discussed in more detail in the section entitled “Government Grants and Tax Benefits” below).
(5) The Commercial Paper was issued for a period of 90 days and extends automatically for additional 90 day periods for up to five years, unless the Company notifies the participants otherwise or a notice of termination is provided by the participants in accordance with the provisions of the Commercial Paper Agreement.
(3) The Commercial Paper was issued on October 23, 2023 for a period of 90 days and extends automatically for additional 90-day periods for up to five years, unless the Company notifies the participants otherwise or a notice of termination is provided by the participants in accordance with the provisions of the Commercial Paper Agreement.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our results of operations, financial condition and liquidity in conjunction with our consolidated financial statements and the related notes.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our results of operations, financial condition and liquidity in conjunction with our consolidated financial statements and the related notes.
Under ASU 2017-04, Intangibles – Goodwill and Other (Topic 350), an entity should recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. • Obligations Associated with the Retirement of Long-Lived Assets.
Under ASU 2017-04, Intangibles – Goodwill and Other (Topic 350), an entity should recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.
Campbell Senior Secured Notes 92.5 57.4 4.03 % September, 2033 Don A. Campbell Complex United States Idaho Refinancing Note (1) 61.6 58.9 6.26 % March, 2038 Neal Hot Springs and Raft River United States U.S.
Campbell Senior Secured Notes 92.5 52.2 4.03 September, 2033 Don A. Campbell Complex United States Idaho Refinancing Note (1) 61.6 55.9 6.26 March, 2038 Neal Hot Springs, Raft River United States U.S.
Our capital expenditures primarily relate to the enhancement of our existing power plants and the construction of new power plants. We have budgeted approximately $572.0 million in capital expenditures for construction of new projects and enhancements to our existing power plants, of which we had invested $111.0 million as of December 31, 2023.
Our capital expenditures primarily relate to the enhancement of our existing power plants and the construction of new power plants. We have budgeted approximately $460.0 million in capital expenditures for construction of new projects and enhancements to our existing power plants, of which we had invested $135.0 million as of December 31, 2024.
Under the agreement, Ormat paid $272 million for 100% of the equity interest in the portfolio assets.
Under the agreement, Ormat paid $274.6 million for 100% of the equity interest in the portfolio of assets.
As a percentage of total Electricity revenues, the total cost of revenues attributable to our Electricity segment for the year ended December 31, 2023 was 63.4%, compared to 60.2% for the year ended December 31, 2022.
As a percentage of total Electricity revenues, the total cost of revenues attributable to our Electricity segment for the year ended December 31, 2024 was 65.4%, compared to 63.4% for the year ended December 31, 2023.
As of December 31, 2023, letters of credit in the aggregate amount of $34.3 million were issued and outstanding under the committed portion of this credit agreement and $36.3 million under the uncommitted portion of the agreement.
As of December 31, 2024, letters of credit in the aggregate amount of $34.8 million were issued and outstanding under the committed portion of this credit agreement and $36.9 million under the uncommitted portion of the agreement.
Our estimated capital needs for 2024 include approximately $550.0 million for capital expenditures on new projects under development or construction including storage projects, exploration activity and maintenance capital expenditures for our existing projects. In addition, we expect $179.0 million for long-term debt repayments.
Our estimated capital needs for 2025 include approximately $570.0 million for capital expenditures on new projects under development or construction including storage projects, exploration activity and maintenance capital expenditures for our existing projects. In addition, we expect $235.7 million for long-term debt repayments.
Other Non-Operating Income (Expense), Net Other non-operating income (expense), net for the year ended December 31, 2023 was a income of $1.5 million, compared to an expense of $0.7 million for the year ended December 31, 2022.
Other Non-Operating Income (Expense), Net Other non-operating income (expense), net for the year ended December 31, 2024 was an income of $0.2 million, compared to an expense of $1.5 million for the year ended December 31, 2023.
Seasonality Electricity generation from some of our geothermal power plants is subject to seasonal variations; in the winter, our power plants produce more energy primarily attributable to the lower ambient temperature, which has a favorable impact on the energy component of our Electricity segment revenues as the prices under many of our contracts are fixed throughout the year with no time-of-use impact.
In the winter, our power plants produce more energy primarily attributable to the lower ambient temperature, which has a favorable impact on the energy component of our Electricity segment revenues as the prices under many of our contracts are fixed throughout the year with no time-of-use impact.
While approximately 87.9% of our Electricity revenues for the year ended December 31, 2023 were derived from PPAs with fixed price components, we have variable price PPAs in Hawaii, which provide for payments based on the local utilities’ avoided cost.
While approximately 81.3% of our Electricity revenues for the year ended December 31, 2024 were derived from PPAs with fixed price components, we have a variable price PPA in Hawaii, which provide for payments based on the local utilities’ avoided cost.
The Commercial Paper bears an annual interest of three months SOFR +1.1% which will be paid at the end of each 90 day period. Base rate was 5.3%. The table above does not reflect unrecognized tax benefits of $8.7 million, the timing of which is uncertain.
The Commercial Paper bears an annual interest of three months SOFR +1.1% which will be paid at the end of each 90-day period. As of December 31, 2024, the base rate was 4.6%. The table above does not reflect unrecognized tax benefits of $6.3 million, the timing of which is uncertain.
We record the fair market value of legal liabilities related to the retirement of our assets in the period in which such liabilities are incurred.
Obligations Associated with the Retirement of Long-Lived Assets We record the fair market value of legal liabilities related to the retirement of our assets in the period in which such liabilities are incurred.
This increase was mainly due to the addition of new energy storage systems to our commercially operating facilities in 2023. Research and Development Expenses Research and development expenses for the year ended December 31, 2023 were $7.2 million, compared to $5.1 million for the year ended December 31, 2022, represent a 42.1% increase.
This increase was mainly due to depreciation related to the addition of new energy storage systems to our commercially operating facilities in 2023 and 2024. Research and Development Expenses Research and development expenses for the year ended December 31, 2024 were $6.5 million, compared to $7.2 million for the year ended December 31, 2023, represent a 9.9% decrease.
In addition, we estimate approximately $365.0 million in additional capital expenditures in 2024 to be allocated as follows: (i) approximately $89.0 million for the exploration, drilling and development of new projects and enhancements of existing power plants that are not yet released for full construction; (ii) approximately $66.0 million for maintenance of capital expenditures to our Electricity segment operating power plants; (iii) approximately $187.0 million for the construction and development of storage projects; and (iv) approximately $23.0 million for enhancements to our production facilities.
In addition, we estimate approximately $410.0 million in additional capital expenditures in 2025 to be allocated as follows: (i) approximately $140.0 million for the exploration, drilling and development of new projects and enhancements of existing power plants that are not yet released for full construction; (ii) approximately $55.0 million for maintenance of capital expenditures to our Electricity segment operating power plants; (iii) approximately $200.0 million for the construction and development of storage projects; and (iv) approximately $15.0 million for enhancements to our production facilities.
Currently, we have forward and cross-currency swap contracts in place to reduce our NIS/U.S. dollar currency exposure and expect to continue to use currency exchange and other derivative instruments to the extent we deem such instruments to be the appropriate tool for managing such exposure.
Currently, we have forward and cross-currency swap contracts in place to reduce our NIS/U.S. dollar currency exposure related to our Senior Unsecured Bonds - Series 4, as detailed below, and expect to continue to use currency exchange and other derivative instruments to the extent we deem such instruments to be the appropriate tool for managing such exposure.
Following the IRA, projects that were or will be placed in service after September 27, 2017, could qualify for a 100% bonus depreciation with respect to its qualifying assets.
Projects that were placed in service after September 27, 2017, could qualify for a 100% bonus depreciation with respect to its qualifying assets.
Net income for the year ended December 31, 2023 was $133.1 million, compared to $77.8 million for the year ended December 31, 2022 and $76.1 million for the year ended December 31, 2021.
Net income for the year ended December 31, 2024 was $131.2 million, compared to $133.1 million for the year ended December 31, 2023 and $77.8 million for the year ended December 31, 2022.
Adjusted EBITDA for the year ended December 31, 2023 was $481.7 million, compared to $435.5 million for the year ended December 31, 2022 and $401.4 million for the year ended December 31, 2021.
Adjusted EBITDA for the year ended December 31, 2024 was $550.5 million, compared to $481.7 million for the year ended December 31, 2023 and $435.5 million for the year ended December 31, 2022.
Electricity Segment Revenues attributable to our Electricity segment for the year ended December 31, 2023 were $666.8 million, compared to $631.7 million for the year ended December 31, 2022, representing a 5.5% increase.
Electricity Segment Revenues attributable to our Electricity segment for the year ended December 31, 2024 were $702.3 million, compared to $666.8 million for the year ended December 31, 2023, representing a 5.3% increase.
As of December 31, 2023, letters of credit in the aggregate amount of $59.3 million were issued and outstanding under this credit agreement. 95 Table of Contents Credit Agreement with HSBC Bank USA N.A. Ormat Nevada has a credit agreement with HSBC Bank USA, N.A for one year with annual renewals.
As of December 31, 2024, letters of credit in the aggregate amount of $86.7 million were issued and outstanding under this credit agreement. Credit Agreement with HSBC Bank USA N.A. Ormat Nevada has a credit agreement with HSBC Bank USA, N.A for one year with annual renewals.
As of December 31, 2023, $302.8 million in the aggregate was outstanding under credit agreements with several banks as detailed below under “Letters of Credits under the Credit Agreements”.
As of December 31, 2024, $286.6 million in the aggregate was outstanding under credit agreements with several banks as detailed below under “Letters of Credits under the Credit Agreements”.
While we believe that we have a distinct competitive advantage based on our technology, accumulated experience and current worldwide share of installed binary generation capacity, an increase in competition may impact our ability to secure new purchase orders from potential customers.
We have experienced increased competition from binary power plant equipment suppliers including the major steam turbine manufacturers. While we believe that we have a distinct competitive advantage based on our technology, accumulated experience and current worldwide share of installed binary generation capacity, an increase in competition may impact our ability to secure new purchase orders from potential customers.
As of December 31, 2023: (i) total equity was $2,441.0 million and the actual equity to total assets ratio was 46.9%; and (ii) the 12-month debt, net of cash and cash equivalents to Adjusted EBITDA ratio was 3.74. During the year ended December 31, 2023, we distributed interim dividends in an aggregate amount of $28.4 million.
As of December 31, 2024: (i) total equity was $2,550.9 million and the actual equity to total assets ratio was 45.0%; and (ii) the 12-month debt, net of cash and cash equivalents to Adjusted EBITDA ratio was 4.03. During the year ended December 31, 2024, we distributed interim dividends in an aggregate amount of $29.1 million.
For the year ended December 31, 2023, our Electricity segment generated 80.4% of our total revenues, compared to 86.0% in the previous year, while our Product segment generated 16.1% of our total revenues, compared to 9.7% in the previous year, and our Energy Storage segment generated 3.5% of our total revenues, compared to 4.2% in the previous year.
For the year ended December 31, 2024, our Electricity segment generated 79.8% of our total revenues, compared to 80.4% in the previous year, while our Product segment generated 15.9% of our total revenues, compared to 16.1% in the previous year, and our Energy Storage segment generated 4.3% of our total revenues, compared to 3.5% in the previous year.

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