Loading...
HomeMy WebLinkAboutCOM 0743.003 2010-2012REGARDING: COMMUNICATION NO. 764 COUNTY CLERK CODU'tTla ti -,Slii 1011 JUL —2 AM 9:39 Puna Geothermal Venture: Permitting and Operation in Hawaii County PU NA GEOTHERMAL VENTURE H AWA I' 10,-) GREEN ENERGY you can rely on All rights resc ^ -ument contains information proprietary to ORMAT Reproduction in any form without prior written permission is strictly prohibited. Disclaimer Statements in this presentation as well as oral statements made by the officers or directors of Ormat Technologies, Inc., its advisors, affiliates or subsidiaries often will contain "forward- looking statements." Whenever you read or hear a statement that is not simply a statement of historical fact (such as when we describe what we "believe". "expect" or "anticipate" will occur, and other similar statements). you must remember that our expectations may not be correct, even though we believe they are reasonable. You should read and listen to these statements completely and with the understanding that actual future results may be materially different from what we expect, as a result of certain risks and uncertainties. For a complete discussion of the risks and uncertainties relating to the forward- looking statements in this presentation, please see "Risk Factors" as described in the Annual Report on Form 10 -K report filed with the Securities and Exchange Commission on 29 February 2012. We will not update these forward- looking statements, even though our situation will change in the future. ORMAT tj GREEN ENERGY you can rely on 2012 ORMAT Al' rights reserved This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited 2 Today's Agenda • Ormat Technologies, Inc. • Operations • Siting • Permitting • Drilling • Economic Impacts • On -going Efforts ORMAT tj GREEN ENERGY you can rely on -1. All riahts resr-. ,current contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited. 3 Ormat Technologies, Inc. 110 MW Geothermal Combined Cycle Plant. New Zealand 86 MW, ITLU Geothermal Plant, Nevada.. U.S. Meeting the Needs of Customers in 71 Countries • A pioneer and world leader in Organic Rankine Cycle (ORC) technology, with a focus on Geothermal and Recovered Energy Generation REG power applications • Listed on the New York Stock Exchange (NYSE: ORA) • Market cap: $972 Million* • Sales 2011: $437 Million • Over 500 employees in the U.S. (-1,200 worldwide) • Supplied 1,430 MW of geothermal and recovered energy power plants in 24 countries, owns and operates 556 MW generation worldwide • Vertically integrated • R &D, engineering, manufacturing, installation, support & O &M • Equipment Supply, EPC, BOT or IPP ORMATa3 *June 29, 2012 GREEN ENERGY you can rely on prior written permissior, s;'ic:ip prohibilec. 4 Ormat's History & Experience 1,600 1,400 1,200 1,000 800 600 400 200 0 Installed Geothermal & REG ORC Experience • Pratt & Whitney ■ TAS • Turboden ■ Ormat 1984 1991 1998 2005 2012 ORMAT can rely on CGPI RiGH' Hawaii History • 1961 -1962: First geothermal wells drilled in Kapoho by Richard Lyman • 1981 -1989: HGP -A 3 MW geothermal facility proves viability. This was not a closed loop system with the drawback of H2S emissions and noise (Ormat was not involved) • 1993: First commercial geothermal power plant startup located in Puna reinjects geothermal brine and all non - condensible gases including H2S ORMAT GREEN ENERGY you can rely on ,s reserve, ills document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited 6 PGV Operations now • 38 MW air - cooled geothermal power plant • 8 MW expansion completed in 2011 • 100% of the fluids reinjected into geothermal reservoir • Uses no fossil fuels, emits no greenhouse gases ▪ Recent upgrades further reduce noise ORMAT'j3 GREEN ENERGY you can rely on i yh s reserve0 . his document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited. Where it all began... • 1976: Public- private partnership developed well HGP -A (Ormat was not involved) • 1980s: PURPA requirements (avoided cost) initiated IPP's interest for geothermal development (Ormat was not involved) • 1982: U.S. DOE brings experimental 3 MW plant online (Ormat was not involved) • 1989: Experimental plant shut down (Ormat was not involved) • 1991: Uncontrolled venting incident (Ormat was not involved) • 1993: PGV reaches commercial operation (Ormat was not involved) • April 2002: Well KS -11 shut down: Production went from 25 MW to 5 MW (Ormat was not involved) ORMAT GREEN ENERGY you can rely on • All rights reserved. This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited. 8 Ormat steps up • June 3, 2004: Ormat acquires PGV from Constellation Energy • Makes significant improvements to well field • Adds bottoming cycle to increase output using existing brine • Brings on expert staff of reservoir engineers who stabilize and maintain the high quality of the resource • Launches employee and community relations efforts Ormat invests over $80 million in upgrades and additional resources to improve the power plant ORMATlbw GREEN ENERGY you can rely on COPYRIGHT i- All right, rscument contains information proprietary to ORMAT. Reproduction in any form withoot prior written permission is shim prchibite 9 How it works Air-Cooled Binary Geothermal Power Plant kirHot Geothermal ; Fluid Cooled Geothermal Fluid OR MAT tr^v) GREEN ENERGY you can rely on All rights reserved. Tr), _ ocument contains information proprietary to ORMAT How it works Geothermal Combined Cycle Power Plant INJECTION PUMP PRODUCTION WELL INJECTION WELL COOLED GEOTHERMAL FLUID ORMATi 3 GREEN ENERGY you can rely on COPYRIC All rights reserved. Thy, ocument contains information proprietary to OPr" Public Comment Claim: "Brine is very corrosive and leaks at flanges. Corrosion is so bad that every day PGV hauls pipes and replacement parts in." • Fact: PGV's geothermal resource, like many other resources in the world is naturally corrosive. To address this condition, water treatment chemicals are used to minimize the effect of the geothermal resource on piping and associated components to prevent leaks at flanges. We use corrosion corrective measures with anti- scalants. • Fact: All chemicals in use are reviewed and approved for use by the HDOH Safe Drinking Water Branch and the U.S. EPA Clean Water Branch. None of our water treatment chemicals contain lead or arsenic. ORMAT' GREEN ENERGY you can rely on reserves ,acument contains information proprietary to ORMAT Reproduction in any form without prior written permission is strictly prohibited. 12 Public Comment Cont. • Fact: Our facility, uses a Computerized Maintenance Management System (CMMS) software package called Mainsaver. * This system has been in service since the early 1990s. The focus of Mainsaver is for PGV to be proactive. We maintain our equipment so that we control the work schedule of the plant. This is implemented to prevent corrosion. ORMAT t3 GREEN ENERGY you can rely on *www.mainsaver.com Public Comment Claim: "There is a very toxic purple mix that is poured down the well during drilling, that contains lead and arsenic." • Fact: Ormat uses non -toxic biodegradable drilling mud. We are very careful to protect the fresh water aquifer. We run three layers of cemented pipe through the ground water aquifer. • Fact: An FDA - approved "Royal Purple" lubricant is used onsite but never used in drilling. Royal Purple is used as a lubricant for mechanical seals on fluid pumps. This product is not listed on the EPA's volatile hazardous air pollutants or volatile organic compounds lists. ORMAT w) GREEN ENERGY you can rely on document contains information proprietary to ORMAT Reproduction in any form without prior written permission < ;t ict!y prohibite 14 Public Comment Claim: "Recent lightning strike took -out wells." • Fact: The recent lightning strike damaged a power line resulting in the power plant being disconnected from the grid. Equipment and operators responded according to safety protocols and the plant was safely shut down. • Fact: In the case that PGV is tripped offline and starts to over - pressure, the power facility can implement controlled venting and follow mandatory protocols that exist to mitigate the impact to the plant and surrounding areas. ORMATj1 GREEN ENERGY you can rely on . 112 ORh .ahts reset document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited. 15 Puna Geothermal Venture Site Kailua Kona East Rift Zone W/ ORMAT GREEN ENERGY you can rely on COPYRIGHT © 2012 ORMAT. hts rese document contains information proprietary to ORMAT Online since 1993 Today: 6 production wells 4 injection wells Siting PGV • Determined by geothermal subzone location (legislatively) • Plant location is result of prominent resource geology • 1987 EIS completed • Site happens to be in an active lava inundation zone • Surrounding area is zoned as agricultural lands • Agricultural zoning resulted in affordable homes being built close to the PGV site • Since 1991, over 117 new dwelling permits have been pulled for properties located within approximately one mile of the plant boundary; close to 600 permits have been pulled for additional structures and renovations in the area ORMAT GREEN ENERGY you can rely on document contains information proprietary to ORMAT Reproduction in any form without prior written permission is st, ::ctiy pro hibltcc 17 Public Comment Claim: "A ten -mile buffer from residential neighborhoods is standard in the industry." • Fact: In the U.S., Ormat operates in multiple counties, none of which have a mandatory buffer. For example, Imperial County California Land Use Ordinance says geothermal wells are allowed to be sited within 300 feet of residences and closer if permitted by the decision- making authority.* *Imperial County Planning & Development Services Department, Title 9 Land Use Ordinance #1203, (Original enactment 11/24/98 M.O. #16), Revised Dec. 16, 2003 M.O. 25, Revised August 3, 2004 M.O. 15 (Amended October 31, 2006 M.O.20)(Amended January 29. 2008 M.O.20) (Amended October 27, 2009 M.O. #35) ORMAT "� GREEN ENERGY you can rely on COPYRIGh . 2012 ORMAT. F ccument contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibiter 18 Public Comment Cont. ORMAT - GREEN ENERGY you can rely on COPYRIGI- ORMAT. All rights :rved. This document contains information proprietary to ORMAT. Reproduction in any form without prior writte, perm:ssor, is strictly prohibited. 19 I Cultural Sensitivities • The EIS did review archaeological information about the site, and cultural analysis was performed. • Ormat and PGV continue to review concerns and have been taking steps to understand the perspective of Pele from respected kupuna. PGV continues to review appropriate protocols for geothermal utilization. ORMAT1-4 GREEN ENER G Y y o u can rely on :'012 ORh s, document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibiter. 20 Permitting PGV These permits oversee the protection of the underground source of drinking water (USDW) at both the State and Federal level: • Underground Injection Control (UIC) Permit UH -1529 issued by the Department of Health (DOH) State of Hawaii: Primary contact Chauncey Hew - 808 - 586 -4258 • Authority to Construct (UIC) Permit issued by the Department of Health (DOH) State of Hawaii: Primary contact Chauncey Hew - 808 - 586 -4258 • Underground Injection Control (UIC) Permit HI596002 issued by the Environmental Protection Agency (EPA) Region IX: Primary contact George Robin - 415 - 972 -3532 David Albright (Manager) This permit protect air quality including noise, H2S and all other emissions and mandates including constant third - party air monitoring • Non- Covered Source Permit 0008 -02 -N (NSP) issued by the Department of Health (DOH) State of Hawaii: Primary contact Darin Lum - 808- 586 -4200 Wilfred K. Nagamine (Chief) These permits protect and regulate all aspects of land use and the emergency response plan: • Geothermal Resource Permit GRP 2(GRP) issued by Hawaii County Planning Department: Primary contact Bobby -Jean Leithead Todd, Planning Director - 808 -961 -8288 • Civil Defense Administration: Primary contact Ben Fuata - 808 935- 0031 This permit protects and regulates all drilling activities and reservoir management: • Plan of Operations (P00) issued by the Department of Land and Natural Resources (DLNR): Primary contact Eric Tanaka - 808- 961 -6586 William J. Aila Jr. (Chairman) - 808 - 587 -0400 These Agencies oversee emergency response preparedness at the Federal and State level: • Hazard Evaluation and Emergency Response (HEER) issued by the Department of Health (DOH) State of Hawaii: Primary contact Beryl Ekimoto - 808 - 586 -4249 • Environmental Protection Specialist Issued by the Environmental Protection Agency (EPA) Region IX: Primary contact Michael Ardito - 415 - 972 -3081 ORMAT'U GREEN ENERGY you can rely on ORMAT. Ad right. reserved This oocrr -pnt contains information proprietary to ORMAT Reproduction in any form without prior written permission is strictly prohibited 21 Public Comment Claim: "Geothermal brine contains benzene, ammonium, arsenic, lead, mercury, cadmium, bicarbonate, sulfates, chlorides, nitrates, boron, hydrogen sulfides, beryllium, radon, asbestos and radio nuclides that is released into the atmosphere. There are too many toxins in the geothermal brine to count and they only monitor H2S." • Fact: This is correct for most resources but the majority contain trace amounts. Naturally occurring chemicals are reinjected into the reservoir, never emitted through the closed -loop system. • Fact: PGV must operate under stringent air emission, water quality and noise standards set forth by the Hawai'i Department of Health and Environmental Protection Agency OR MAT tag GREEN ENERGY you can rely on 22 Public Comment Cont. • Fact: Ormat monitors all naturally occurring chemical elements in the brine and continuously monitors H2S through 35 point- source detectors placed throughout the power plant. PGV also maintains three monitoring stations that are located on the perimeter of the facility. These stations monitor meteorological and noise data, which can be viewed on the company website and is provided in a formal report given to the HDOH on a monthly basis, or as requested. • Fact: This is done even though the plant operates as a closed loop system with no emissions during normal plant operations. ORMAT GREEN ENERGY you can rely on document contains information proprietary to ORMAT. Reproducflo■ rn ,ny four v.,Thoui prior written pern.,ssl •!. s p•:,i.; 23 Public Comment Cont. • Fact: For over 20 years, PGV has had to meet state - mandated emissions standards. • Fact: Third -party consultant is Bill Whitman with CARDNO TEC (Phone 808 - 528- 1445). All emission and noise data is currently available for all years at the HDOH. • Fact: The EPA states the Kilauea Volcano emits 661 tons of SO2 per day.* ORMAT t� * htt : / /www.hawaiitri bune - herald.com /sections /news /local _ news /epa -cap GREEN ENERGY you can rely on cserved. This document contains information proprietary to ORMAT Reproduction in any form without prior written permission F.;!,ct?) prohitnt,u 24 Public Comment Claim: "Ormat reinjects into the water table." • Fact: When drilling, Ormat triple cases the wells past the fresh -water lens and, unlike anywhere else in the U.S., uses nitrogen in the annular space in the design to safeguard against exchange of geothermal brine with nearby aquifers. Thus, PGV is protecting the water table without compromising the health and well -being of the surrounding ecosystem. All geothermal brine is reinjected into the geothermal reservoir, thousands of feet below the fresh water aquifer. • Fact: Every year PGV conducts Mechanical Integrity Testing (MIT). These tests review the integrity of our wells and confirms protection of the ground water. Recorded continuous monitoring is required by HDOH and EPA for detection of potential leaks on all injection wells. ORMAT ,,t-1) GREEN ENERGY you can rely on COPYRIGHT © 2012 ORMAT. This document contains information proprietary to ORMAT. Reproduction if sr form v,cno.c prior written permission is strictly prohibitec 25 Recent 8 MW Expansion • 25 MW contract remains as -is • 5 MW contract at fixed price of 11.8 cents per kWhr —39% lower than current pricing • 8 MW contract at fixed price of 9 cents per kWhr —54% lower than current pricing • Dispatchable energy, remotely and automatically controlled by HELCO System Operator • Optimizes geothermal resource; brine not previously used will generate the additional power ORMAT t GREENENERGYyou can rely on reprietary to ORMAT. Reproduction in any form without prior rib.,.,, 26 Public Comment Claim: "PGV wants to expand to 700 MW and transfer power to Oahu through an undersea cable." • Fact: There is a pervasive belief that PGV is expanding to sell electricity off - island. This simply is not the case. There is no way to move power off the Big Island, HELCO has excess power, and we have no power purchase agreement or contract to justify expansion. The well we have been drilling is simply to keep the existing facility at its contracted amount of 38 MW. • Fact: On May 1, 2012, the HPUC approved a request to open a docket, which allows HELCO to proceed with a competitive bidding process. To date, the company has not issued an RFP. ORMATiV GREEN ENERGY you can rely on OPNri, Pep od o orm ..���. ,:•ion v _t er• perm; 27 Public Comment Claim: "Geothermal wells have to be constantly drilled because the pockets of steam dry -out. They have to be drilled every three months." • Fact: Not true. Please see drilling timeline on next slide. ORMAT, GREEN ENERGY you can rely on All rights reserved. This document contains information proprietary to ORMAT. Reproduction in any form with written permission is strictly prohibited 28 Drilling Timeline Year Welt Name Status Spud Date Comp Date Depth Comments 1976 HGP -A Production 12/10/1975 6/5/1976 6456 State Well Produced 1982 - 1989 1990 KS -3 INJ 11/5/1990 1/24/1991 7406 New Well MW -1 Water 12/1/1990 12/19/1990 720 Ground Water Well 1991 MW -2 Monitor 1/7/1991 1/21/1991 640 Ground Water Well KS -7 Production 1/30/1991 2/28/1991 1678 Plugged and Abandoned KS -1A INJ 3/20/1991 4/23/1991 5745 Workover KS-8 Production 5/2/1991 8/23/1992 3488 New Well MW -3 Water 8/7/1991 8/23/1991 720 Ground Water Well 1992 KS -4 INJ 9/13/1992 11/25/1992 6796 New Well 1993 KS -9 Production 12/6/1992 1/25/1993 4564 New Well KS -10 Production 2/1/1993 4/6/1993 5083 New Well 1999 KS -11 Production 9/18/1999 11/22/1999 7951 New Well 2003 KS -5 Production 8/23/2002 1/12/2003 6418 New Well 2004 KS -11 INJ 5/19/2004 5/26/1999 3200 Convert to Injection well 2005 KS -6 Production 6/26/2005 7/16/2005 6584 New Well KS -13 INJ 7/26/2005 12/12/2005 6970 New Well 2009 KS -14 Production 9/12/2009 1/10/2010 5717 New Well 2012 KS -15 Production 2/1/2012 New Well ORMATtoe GREEN ENERGY you can rely on Drilling Blowout Preventor ORMAT GREEN ENERGY you can rely on • document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibit?'. CURRENT BOP STACK ON WELL KS -15 ROTATING HEAD II Iri' 5M ANNULAR BOP 1 I(2 PIPE RAMS DOUBLE GATE RAMS BLIND RAMS FLOW TEE WITH T' OUTLET 5" PIPE RAMS DOUBLE GATE RAMS BLIND RAMS KILL LINE i CHOICE LIME IS' 15•1 X IF -Ii1' 5M DS1 HEIGHT • 45.12 MM TIX IRS Sr CLASS MO RTl FLANGED MODEL '3" S. AB GATE VALVE BEVEL GEAR OPERATED. T -GE TRIM. R S1 RING GASKET TIX IES EXPANSION WOOL. If I, -BINDS WP FLANGED BOTTOM XIS' 154.WP FLANGE DTOP WITH T W Ol I1' 51115W? FLANGED SIDE OUTLETS WITH PACE OFT FOR I I I J' OD CASING HEIGHT - an MAn ITX KS CASING HEAD. If DA' WOW FLANGED TOP X If' OD SOW BOTTOM WITH TWO 1 IrI' -BIMSWP FLANGED SIDE OUTLETS BX II) RING GASKET. If' CASING STUB WELDED WITH SI. it PLN DOWN HEIGHT 1S K If' HS TV/CASING 30 How Holding Ponds Work • All liquids from the lined pond are pumped back into the geothermal reservoir. • Any residue left in the pond after fluids are removed is tested and disposed of properly. OR MAT '"-- GREEN ENERG Yyou can rely on ORMAT document contains information proprietary to ORMAT. Reprodu_ ._ .ut prior written permission is strictly prohibited 31 Public Comment Claim: "Injections in drilling cause earthquakes or is similar to fracking." • Fact: Reinjection of the geothermal brine into the geothermal reservoir is not fracking as is done in the natural gas industry. Induced seismicity is not common in geothermal systems. • Fact: Ormat provides seismic data to the volcano observatory (which, at the time did not exist) and now adds an early warning in the case of seismic activity. ORMAT 1 GREEN ENERGY you can rely on ORMAT reserved. This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited 32 Economic Contributions • 30 full -time employees • Numerous routine & seasonal contractors • Royalty payments to the State, County & OHA ORMAT GREEN ENERGY you can rely on • s document contains information proprietary to ORMAT. Repro tiowa• Expenditures from the Geothermal Relocation and Community Benefits Fund 2007 -2011 • Two 33- passenger buses were purchased to increase the number of buses serving the Puna makai area • Two bus driving positions • Numerous street lights on Hawaiian Beaches • One street light at Post Office Road closer to Highway 130 • Four street lights from Nanawale Subdivision to Pahoa School • Three lifeguard pool positions and one swim instructor • Pahoa transfer station upgrades • Opihikao road paving • Lockers and benches for the swimming pool • Repaving of main street Pahoa Town ORMATV GREEN ENERGY you can rely on • Funded the completion of the Pahoa skate board park for the kids in the area • Fenced the Pahoa skate board park • Playground set for Hawaiian Beach Park • Playground set next to Pahoa Skate Park • Security Guards stationed at the Pahoa Neighborhood Facility providing additional after -hours security in Pahoa • Security Guards stationed at Pohoiki Beach Park • Lifeguard and lifeguard stand at Pohoiki to improve the family experience • District 5 council office 2008 -2009 itornatior. proprietary tc ORMAT Reproduction in any form without prior written permission is st.icty prohibiter! 34 Bill 256 • Ormat strongly supports evaluating and studying the health effects of living on the rift zone and in close proximity to industrial facilities of all types. • Ormat cannot support legislation that creates an arbitrary buffer that predicates the expenditure of royalties due to concerns that, to date, cannot be substantiated and takes away community benefits. • Our goal is that PGV be an asset in evaluating environmental impacts in our community using what we have learned from years of extensive monitoring. ORMAT GREEN ENERGY you can rely on COPYRIGr 2012 ORMAI .s reserved. This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited 35 Expenditures from the Geothermal Relocation and Community Benefits Fund 2007 -2011 • Two 33 purch.� bu • P of the Pahoa s in the area e number of una makai area s s es street light at er to Highway 130 r street lights from Nana division to Pahoa School e lifeguard pool positions and one instructor ransfer station upgrades ad paving nches for the swimming waiian skate bo • Fenced the Pah • Playground set for H • Playground set next to Park • Security Guards stationed at Neighborhood Facility providi additional after -hours security curity Guards stationed at Park park h Park • • L d lifeguard sta mily exp • Di e p00 • Repavin ORMAT t GREEN ENERGY you can rely on • Town COPYRIGH 2012 ORMAT. All rights reserved. This document contains information proprietary to ORMAT Reproduction in any form without prior written permission is strictly prohibited. k 36 On -going Efforts • Build relationships with stakeholders • Community education • Landowner participation • County, State & Federal agencies • Local and State legislative support • Maintain ongoing stakeholder relations • Routine and regular updates to adjacent communities • Routine and regular updates to government agencies and legislators • Participation with business organizations • Financial support of local education and social organizations • Volunteering time to support educational or other related organizations ORMAT� GREEN ENERGY you can rely on 37 Geothermal Benefits ORMAT low rt GREEN ENERGY you can rely on • Reliable, continuous and secure • Renewable and sustainable • Safeguards clean air • Uses little land • Predictable costs, no price shocks • Boosts local economies • Conserves fossil fuels • No importing or transporting fuels • Contributes to energy diversity en perrmss or _ ctir prohih�ta� 38 Questions? Mahalo For questions or comments, please contact Paul Thomsen (775) 313 -6569 pthomsen a.ormat.com OR MAT' `j3 GREEN ENERGY you can rely on ,MAT. All rights reserved. This document contains information proprietary to ORMAT. Reproduction in any form without prior written permission is strictly prohibited. 39