Polaris Infrastructure: Deleveraged, Derisked
By Tom Konrad, Ph.D., CFA
Geothermal power is a type of renewable electricity that even the most conservative electric utilities find it easy to get behind. Like conventional coal and gas plants, it uses heat to drive a turbine which in turn creates electricity. The main difference is that the heat comes from natural geologic processes, rather than burning fossil fuels, making it renewable and free of greenhouse gas emissions, giving it considerable environmental appeal as well.
Where Geothermal Developers Stumble
The problem lies in the resource. The potential for producing power from solar, wind, and hydropower at any location can be...
Ormat Steams On
Ormat Technologies, Inc. (ORA: NYSE) recently reported financial results for the three-month period ending September 2018 - the first full quarter without the revenue and earnings of the company’s Puna geothermal electricity generation project. In early May 2018, the Kilauea volcano erupted, giving the Hawaiian Islands a grand fire show. For Ormat and its neighbors near its Puna Geothermal Power Project the volcano was more nightmare than entertainment. Within a few days Ormat was forced to shut down the facility on Kilauea by removing surface equipment and plugging the geothermal well holes. Nonetheless, three well sites, the electric substation, an adjacent warehouse and drilling equipment were overtaken...
Blindsided with Advance Warning
Holders of Ormat Technologies (ORA: NYSE) shares may feel somewhat blindsided by the cessation of operations at the Puna geothermal power plant on the Hawaii Island. Lava flowing from neighboring Kilauea volcano has overrun two of the geothermal wells as well as a warehouse and an electricity substation.
Shareholders cannot claim they were not forewarned. Ormat’s annual report for 2017 mentions the risk of volcanic eruptions seventeen times. However, since no geothermal power company has ever experienced an interruption in operations due to a volcanic eruption, investors most likely overlooked the real dangers of locating a business on top of geological ‘hot spot.’
https://upload.wikimedia.org/wikipedia/commons/3/3a/Hawaii_Mount_Kilauea%27s_eruption_opens_new_lava_vent.webm
Ormat is not the...
Geothermal Power: Business in a Tough Neighborhood
Geothermal power producers use Earth’s internal heat to power electrical generators. It is the quintessential renewable energy source. Most geothermal plants are located adjacent to underground pockets of super hot water. Developers look for locations where these thermal reservoirs are near the earth’s surface, providing availability of the super hot water at a reasonable cost. Unfortunately, those locations are often in tough neighborhoods.
Ring of Fire
The overwhelming majority (85%) of current geothermal power installations in the world are located along the Ring of Fire that circumvents the Pacific Ocean. More a horseshoe than a circle, the Ring of Fire is a geographic anomaly that is...
List of Geothermal Stocks
Geothermal stocks are publicly traded companies whose business involves using the earth's heat energy for productive use, such as generating electricity and space and process heat.
This list was last updated on 10/27/2020.
Calpine Corp. (CPN) Bought out. No longer publicly traded.
Climeon AB (CLIME-B.ST)
Contact Energy Limited (CEN.NZ, COENF)
Enel SpA (ENEL.MI, ESOCF)
Energy Development Corporation (EGDCY)
Innergex Renewable Energy Inc. (INE.TO, INGXF)
Mercury NZ Limited (MCY.NZ)
NIBE Industrier AB (NIBE-B.ST, NDRBF)
Ormat (ORA)
Ormat Industries (ORMT.TA)
Polaris Infrastructure Inc. (PIF.TO, RAMPF)
If you know of any geothermal stock that is not listed here and should be, please let us know by leaving a comment. Also for stocks in the...
Geothermal Tie-up
Ormat Technologies (ORA: NYSE) is buying U.S. Geothermal (HTM: NYSE) for $5.45 per share in cash. The offer represents a 29% premium to the HTM closing price the day prior to the announcement. The shares had been in a steady decline over the past several months, hitting a 52-week low of $3.11 earlier in January 2018. So while the offer price pales in comparison to the U.S. Geothermal’s all-time high stock price of $28.68 way back in October 2007, shareholders may be feeling a warm breeze coming off Ormat’s cash.
Should Ormat shareholders be as thrilled as the company ponies up $110 million...
US Geothermal Fizzles
by Debra Fiakas CFA Geothermal power generator US Geothermal (HTM: NYSE) came up short in reporting financial results for the first quarter ending 2017 - at least from the perspective of the four analysts with published sales and earnings expectations for the company. Operating revenue of $8.4 million slipped slightly from the same period a year ago, but produced slightly lower net income of $1.1 million. The company’s share was $260,000 or a penny per share. Not good enough say the analyst’s who were collectively looking for two pennies per share in earnings! Missing earnings expectations has...
Alterra Power: Deep Geothermal
by Debra Fiakas CFA Last week, one of the leaders in a development consortium, Iceland’s largest privately owned energy generator HS Orka hf, announced the completion of a project to prove the merits of deeper geothermal wells. The project in the Reykjanes Peninsula in southern Iceland reached 4,659 meters depth in January 2017, where temperatures measured 427 degrees Centigrade and fluid pressure was 340 bars. By all accounts the project was successful, suggesting that deep wells could a cost effective approach to geothermal energy. The drilling program was mentioned in early December 2015 a recent post “Hot...
US Geothermal: Can A Reverse Split Heat Up This Stock?
by Debra Fiakas CFA
US Geothermal (HTM: NYSE) has been on our radar for some time. Despite considerable accomplishment in terms of building electricity output from a portfolio of geothermal power installations, investors seem reluctant to embrace the company and its stock. Earlier this week, US Geothermal management issued its usual quarterly update on its development work, this time detailing progress in expanding capacity and improving well performance on three of its geothermal installations. Altogether an incremental 90 megawatts are under development, which would triple the current power generation capacity of 45 megawatts. The company press release was met by...
Ormat Eyeing Storage M&A for Geothermal Projects
Jennifer Delony Reno, Nev.-based Ormat Technologies (ORA) is seeking mergers and acquisitions that will help the company enhance its geothermal projects with energy storage technologies, Ormat CEO Isaac Angel said on Nov. 4. “On the storage solutions side, we are progressing well,” Angle said during a 3Q15 earnings webcast. “I’m very optimistic that we will be able to add a lot of MW … and profitability to our existing power plants.” Angle said that he also is optimistic that the company will secure a deal soon that will initiate Ormat’s energy storage strategy. “We’re almost there,” he said....
US Geothermal: Wringing Profits From Hot Rocks
by Debra Fiakas CFA Last week I spent the better part of a day listening to presentations of energy companies at the Wall Street Analyst Forum in New York. Although I had heard the management of US Geothermal (HTM: NYSE) tell the company’s story before, I was impressed to hear about the progress the company has made in squeezing profits from electricity produced with turbines run by underground steam. Management called it gratifying! The company reported $31 million in sales in the year 2014, delivering $14.9 million in net income to the bottom line. That is something...
Ormat: A Bargain Green Stock?
by Debra Fiakas CFA Everybody likes a bargain. Investors really like a good cheap buy. A review of our four alternative energy industries revealed several stocks trading below industry average multiples of forecasted earnings. Tracking the geothermal power generators has frequently taken us to the door of Ormat Technologies, Inc. (ORA: NYSE). Ormat has two revenue segments: power generation through geothermal generators and energy recovery and equipment sales to utility and industrial customers installing geothermal power plants. The company owns and operates plants with 626 megawatts generating power and has supplied equipment around the world for another...
Geothermal Should Ride The Duck Curve
Meg Cichon As the geothermal industry limps along year after year, a utility insider strongly suggests that it changes its tactics. For years the geothermal industry has relentlessly boasted that it is a baseload resource, meaning it provides stable power similar to a coal or natural gas plant, except without all of those pesky carbon emissions. While upfront costs to develop a plant are higher than other renewable sources, geothermal leaders say that this baseload aspect makes it a more attractive resource in the long run since the grid needs more stable power as increasing amounts of...
US Geothermal: Egregiously Undervalued?
by Debra Fiakas CFA Last week US Geothermal (HTM: AMEX), a power generator from geothermal projects in California, Oregon, Nevada and Idaho, made an appearance at the Marcum Microcap Conference in New York City. The company stood out among most of the companies appearing in Marcum’s so-called ‘energy track’ as one of the few with solid revenue and profits. US Geothermal reported a net profit of $1.9 million on $28.8 million in total sales in the twelve months ending March 2014. The net profit is commendable, but what I find more interesting is the conversion of 30%...
How Geothermal Heat Pumps Can Soar Like Solar
Tom Konrad CFA Geothermal Heat Pumps (GHP) are a niche market. They shouldn’t be. Disclosure: Long WFIFF, short LXU puts (a net long position.) A Better Mousetrap? Ralph Waldo Emerson never said “Build a better mousetrap, and the world will beat a path to your door.” The mousetrap that likely inspired the misquote was invented seven years after his death. Unfortunately, many people take it literally. GHPs have all the hallmarks of a better mousetrap: They do the job of heating and cooling a building more efficiently than any other option. Despite...
Holiday Shopping Deal On Ram Power Shares
Tom Konrad CFA Holders of Ram Power Corp. (TSX:RPG, OTC:RAMPF) on November 26 (the “record date”) will be receiving valuable coupons as the result of the company’s rights offering, announced November 18th. Just in time for the holidays, these coupons, or “rights” can be used to buy additional shares of Ram Power for 8¢ Canadian per share any time before 5pm on December 23rd. (Disclosure: I am long Ram Power stock.) Holiday shoppers looking for more traditional gifts will be able to raise a little cash by selling the rights on the Toronto Stock Exchange,...
