Q4 2024 Ormat Technologies Inc Earnings Call
Operator: Good morning and welcome to the Ormat Technologies 4th Quarter and Full Year 2024 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions.
Good morning, and welcome to the Ormat technologies fourth quarter and full year 'twenty 'twenty four earnings conference call all participants will be in a listen only mode.
After todays presentation, there will be an opportunity to ask questions to do so please press star one on your telephone keypad.
Operator: To do so, please press star 1 on your telephone keypad. Please note that this event is being recorded.
Please note that this event is being recorded.
Joshua Carroll: I would now like to turn the conference over to Josh Carroll with Alpha IR. Please go ahead. Thank you, Operator.
Speaker Change: I'd now like to turn the conference over to Josh Carroll with Alpha IR. Please go ahead.
John Bush: Thank you operator hosting the call today are John Bush, our Chief Executive Officer are they Ginsberg, Chief Financial Officer <unk>.
Joshua Carroll: Hosting the call today are Doron Blachar, Chief Executive Officer, Ozzie Ginzburg, Chief Financial Officer, and Smidar Lavie, Vice President of Best Relations and ESG Planning and Reporting.
John Bush: Vice President of Investor Relations, and ESG, you're planning and reporting.
Unknown Executive: Before beginning, we'd like to remind you that the information provided during this call may contain forelooking statements relating to current expectations, estimates, forecasts, and projections about future events that are forelooking, as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the company's plans, objectives, and expectations for future operations. and are based on management's current estimates and projections, future results, or trends. Actual future results may differ materially from those projected as a result of certain risks and circumstances.
John Bush: Before beginning we'd like to remind you that information provided during this call may contain forward looking statements relating to current expectations estimates forecasts and projections about future events that are forward looking as defined in the private Securities Litigation Reform Act 1995.
John Bush: These forward looking statements generally relate to the company's plans objectives and expectations for future operations.
John Bush: And are based on management's current estimates and projections future results or trends actual.
John Bush: Actual future results may differ materially from those projected as a result of certain risks uncertainties or discussion of such risks and uncertainties. Please see risk factors as described in Ormat technologies annual report on Form 10-K.
Unknown Executive: For a discussion of such risk and uncertainties, please see risk factors as described in Ormat Technologies' in-report on Form 10-K and co-reports on Form 10-Q that are filed with the SEC. In addition, during the call.
John Bush: <unk> Form 10-Q.
John Bush: With the SEC.
John Bush: In addition during the call.
Unknown Executive: company will present non-GAAP financial measures such as adjusted even. Reconciliations to the most directly comparable gap measures and management reasons for presenting such information is set forth in the press release that was issued last night, as well as in the slides posted on the website. Because these measures are not calculated in accordance with GAAP, they should not be considered in isolation from the financial statements prepared in accordance with GAAP.
John Bush: The company will present non-GAAP financial measures such as adjusted EBITDA.
John Bush: Reconciliations to the most directly comparable GAAP measures and management reasons for.
John Bush: Such information is set forth in the press release that was issued last night as well as in the slides posted on the website.
John Bush: Because these measures are not calculated in accordance with GAAP. They should not be considered in isolation from our financial statements prepared in accordance with GAAP.
Joshua Carroll: Before I turn the call over to management, I would like to remind everyone that a slide presentation accompanying this call may be accessed on the company's website at ormat.com under the presentation link that is found on the Investor Relations With all that said, I would now like to turn the call over to Ormat's CEO, Doron Blachar.
John Bush: Before I turn the call over to management I would like to remind everyone that a slide presentation accompanying this call may be accessed on the company's website.
John Bush: We have a presentation on.
John Bush: On the Investor Relations tab.
Speaker Change: All that said I would now like to turn the call over to CEO.
John Bush: Right.
Doron Blachar: Thank you, Josh.
Speaker Change: Thank you Josh and good morning, everyone. Thank you for joining us today.
Doron Blachar: And good morning, everyone. Thank you for joining us today. 2024 was another successful year for Ormat, as we delivered solid operational and financial performance and made marked advancements, executing against the key pillars of our multi-year growth strategy. This success was highlighted by a top line lift movement of 6.1% and an adjusted EBDI improvement of 14.3%, with solid growth demonstrated across all three of our business sectors. As you can see on slide 4, in the electricity segment, we celebrated the successful acquisition of Enel Assets, a strategic move that has substantially boosted our revenues and EBITDA. This acquisition, coupled with a remarkable recovery and resource stability at Puna and Olkaria, enabled us to more than offset the operational events and curtailments to deliver strong financial results and impressive adjusted EBITDA.
Speaker Change: 224 was another successful year for but as we delivered solid operational and financial performance and made the Mazda advancements executing against the key pillars of our multiyear growth strategy.
Speaker Change: This success was highlighted by top line movements of six 1% and adjusted EBITDA improvement of 14, 3% with solid growth demonstrated across all three of our business segments.
Speaker Change: Yeah.
Speaker Change: As you can see on slide four in the electricity segment, we celebrated the successful acquisition of <unk> assets.
Speaker Change: Well this is substantially boosted our revenues and EBITDA.
Speaker Change: This acquisition, coupled with a remarkable recovery and resource stability. Its full name them calia enabled us to more than offset the operational events entertainment to deliver strong financial results and impressive adjusted EBITDA shortfall.
Doron Blachar: In addition, we secured three new PPAs for our Boyan power plant in Guadalupe, as well as Heber 1 and Mammoth 2 in California, which captured significantly higher rates than our current aggregate. demonstrating the strong demand we are experiencing in the U.S. and globally for geotech.
Speaker Change: In addition, we secured three new Ppas for power plant in Waterloo.
Speaker Change: He built one in mammals still in California, which captured significantly higher rates than our current agreements demonstrating the strong demand we're experiencing in the U S and globally full geo too.
Doron Blachar: turning to the store. brought three new facilities online, including the 80 megawatts, 320 megawatts-hour bottleneck project, the largest storage facility in our portfolio. This milestone, along with the signing of two tolling agreements in Texas and one resource adequacy agreement in California, has transitioned this segment towards lower overall volatility and more consistent profitability while growing its way within our overall portfolio. In the product segment, we have fully recovered our top line, improved our segment profitability, and reached an all-time high backlog with the support of the approximately $210 million contract in Utah. This achievement, combined with our successful efforts in raising over $500 million in corporate and finance debt and the receipt of significant tax benefits, highlights our strategic financial management and robust market threat.
Speaker Change: Turning to the store to pick up.
Speaker Change: Draw three new facilities online, including the 80 megawatts 320 megawatts hour both of this project.
Speaker Change: The largest storage facility in our portfolio.
This milestone along with the signing of two tolling agreements in Texas, and one resource adequacy agreement in California has transitioned this segment towards lower overall volatility and more consistent profitability, while growing its way within our overall portfolio.
Speaker Change: In the product segment, we have fully recovered our topline improve the segment's profitability and reached an all time high backlog with the support of the approximately $210 million contract and you see them.
Speaker Change: These achievements combined with our successful efforts in raising over $500 million.
Speaker Change: In pulpwood and finance debt and the receivables significant tax benefits highlights, our strategic financial management and robust market driven.
Doron Blachar: These accomplishments are a testament to our unwavering dedication to... They position us for continued success and reinforce our commitment to delivering value to our state.
Speaker Change: These accomplishments are a testament to our unwavering dedication to growth.
Speaker Change: This position us for continued success and reinforce our commitment to delivering value to our stakeholders.
Ozzie Ginzburg: Now before I provide further updates on our operations and plans, I will turn the call over to Asi to review the financial results for the quarter. Asi? Thank you, Doron. Let me start my review of our financial highlights on slide 6. Total revenues for 2024 were $879.7 million. marking growth of 6.1% year over year. and revenue for the fourth quarter was $230.7 million. down 4.4% year-over-year. The improved top-line performance on a full-year basis was driven by growth across all three of our business models. with the magnitude of year-over-year revenue growth driven largely by the strategic expansion on our electricity portfolio.
Speaker Change: Now before I provide further updates on our operations and plan I will turn the call over to <unk> to review the financial results for the quarter.
<unk>.
Speaker Change: Thank you dawn.
Speaker Change: Let me start my review of our financial highlights on slide six.
Speaker Change: Total revenues for 2024 $879 million.
Speaker Change: Mark King growth of six 1% year over year.
Speaker Change: And revenue for the fourth quarter was $237 million.
Down four 4% year over year.
Speaker Change: The improved top line performance on a full year basis was driven by growth across all three of our business segments.
Speaker Change: With the magnitude of year over year revenue growth driven largely by the strategic expansion on our electricity portfolio.
Ozzie Ginzburg: Ormat gross profit for 2024 was $272.6 million. a 3.3% increase compared to 2023. Gross profit in the fourth quarter declined 6.2 percent, primarily due to the unexpected impact we saw in the electricity segment due to curtain. In the fourth quarter of 2024, net income attributable to the company's stockholders was $40.8 million, or 67 cents per diluted share. marking solid growth in comparison to $35.7 million or $0.59 per diluted share in the same quarter last year. on an adjusted basis. Net income attributable to the company's stockholders was $43.6 million or $0.72 per diluted share An increase of 7.7% and 7.5% respectively.
Speaker Change: Gross profit for 2024 was $272 6 million.
Speaker Change: At three 3% increase compared to 2023.
Speaker Change: Gross profit in the fourth quarter declined six 2% primarily due to the unexpected impact we saw in our electricity segment.
Speaker Change: Due to curtailments.
Speaker Change: In the fourth quarter of 2024 net income attributable to the company stockholders was $48 million.
Sure.
Speaker Change: 67 cents per diluted share.
Speaker Change: Marking solid growth in comparison to $35 $7 million or <unk> <unk> per diluted share in the same quarter last year.
Speaker Change: On an adjusted basis net income attributable to the company stockholders was $43 6 million.
Speaker Change: Or.
Speaker Change: My two cents per diluted share.
Speaker Change: An increase of seven 7%.
Speaker Change: And seven 5% respectively.
Speaker Change: Okay.
Ozzie Ginzburg: In the full year 2024. Net income attributable to the company's stockholders was $123.7 million. or $2.04 per diluted share. in comparison to $124.4 million. or $2.08 for a loaded chair, last. on an injected basis. Net income attributable to the company's stockholders. for the full year 2024 was $133.7 million. or $2.20 per diluted. An increase of 9.7% and 7.3% versus last year, respect. Fully readjusted divida was $550.5 million, marking an impressive increase of 14.3% compared to 2020. Our fourth quarter adjusted EBITDA results were $145.5 million, an increase of 4.6% compared to the fourth quarter of last year.
Speaker Change: In the full year 2024.
Speaker Change: Net income attributable to the company's stockholders.
Speaker Change: $143 7 million.
Speaker Change: Or.
Speaker Change: $2 <unk> per diluted share.
Speaker Change: In comparison to $124 4 million.
Speaker Change: Our $2.08 per diluted share.
Speaker Change: Last year.
Speaker Change: On an adjusted basis.
Speaker Change: Net income attributable to the company stockholders for.
Speaker Change: For the full year 2024 was $133 $7 million.
Speaker Change: Or $2 20 per diluted share.
Speaker Change: An increase of 97% and.
Speaker Change: Seven 3%.
Speaker Change: Since last year, respectively.
Speaker Change: Full year, adjusted EBITDA was $555 million.
Speaker Change: <unk>, an impressive increase of 14, 3% compared to 2023.
Speaker Change: Our fourth quarter, adjusted EBITDA results, well $145 5 million, an increase of four 6% compared to the fourth quarter of last year.
Ozzie Ginzburg: This year-over-year growth in adjusted EBITDA was driven by the contribution of new projects added in both the electricity and storage segments, the improved performance of our LAC carrier complex, and better pricing at our Puna power plant, as well as by the sale of tax benefits from newly built power plants. In addition, we have significantly increased in the product segment EBITDA, driven mainly by the improvement. We note that our adjusted EBITDA growth continues to meaningfully outpace our already strong store planning. which further builds upon a track record of profitability maximization as we execute our portfolio growth strategy.
This year over year growth in adjusted EBITDA was driven by the contribution of new projects entering both electricity and storage segment.
Speaker Change: The improved performance of our last call your complex and better pricing at our Puna power plant as well.
Speaker Change: By the sale of tax benefits from newly built plant.
Speaker Change: In addition, we had significantly increased in the product segment EBITDA driven mainly by the improved margins.
Speaker Change: We note that our adjusted EBITDA growth continued to meaningfully outpace our already strong topline expansion.
Speaker Change: Which further builds upon a track record of profitability maximization as we execute our portfolio growth strategy.
Ozzie Ginzburg: Turning now to slide seven. We break down the revenue performance of the segment. Electricity segment revenue for the fourth quarter decreased by 2.1% to $180.1 million due to a $5.4 million reduction at Dixie Valley, driven mainly by the previously reported outage and the approximately $4 million reduction driven by curtailments in the U.S. While we touched based on this briefly in the last quarter earning call, our fourth quarter revenue results reflect a greater than originally anticipated containment from local transmission owners as they conducted maintenance on the T line. For the full year, electricity revenue increased by 5.3% to $702.3 million, which was driven by the contribution of the NL assets we acquired at the beginning of 2020.
Speaker Change: Turning now to slide seven.
Speaker Change: We break down the revenue performance of the segment level.
Electricity segment revenue for the fourth quarter decreased by two 1%.
Speaker Change: Two $181 million due to a $5 $4 million reduction at Dixie value driven mainly by the previously reported outage.
Speaker Change: And the approximately $4 million reduction driven by curtailments in the U S.
Speaker Change: While we touched based on this briefly in the last quarter, earning call.
Speaker Change: Fourth quarter revenue results reflects a greater than originally anticipated curtailment from local transmission owners.
Speaker Change: Conducted maintenance.
Speaker Change: On the T lines.
Speaker Change: For the full year of electricity revenue increased by five 3% to $702 $3 million, which was driven by the contribution of the net assets. We acquired at the beginning of 2024, the Heber complex with powering project as it came back towards full capacity and improved generation performance in oncology <unk> and <unk>.
Ozzie Ginzburg: The Heber Complex Repowering Project, as it came back towards full capacity. And improved generation performance in Orkalia and pricing at the Puna Power Plant. partially offset by the reduction in Dixie Valley and the containment in the U.S. In the product segment, revenues declined by 21.4% to $39.6 million during the fourth quarter and for the full year, they grew by 4.4% to $139.7 million. Energy storage segment revenue increased by 56.7% in the fourth quarter and by 30.6% to $37.7 billion in the fourth quarter. This ingredient is mainly related to New Energy Storage Facility, which commenced operation during 2023, including Bollingreen, Andover, Upton, and Pomona II, as well as the East Flemington and Barton Neck Energy Storage Facility, which commenced operation during 2023.
Speaker Change: <unk> is one of our brands.
Speaker Change: Partially offset by the reduction in equity value and the curtailments in the U S.
Speaker Change: In the product segment revenues declined by 21, 4% to $39 $6 million during the fourth quarter and for the full year. They grew by four 4% to $139 7 million.
Speaker Change: Energy storage segment revenue increased by 56, 7% in the fourth quarter and by 36% to $37 $7 million in the full year.
Speaker Change: It is mainly related to new energy storage facility, which commenced operations during 2023, including bowling Green Andover upturn and to monitor.
Speaker Change: As well as as Flemming turn and bottleneck energy storage facility, which commenced operations during 2024.
Ozzie Ginzburg: Moving to slide 8. The gross margin for the electricity segment was 34.9% and 34.6% in the fourth quarter and full year. Largely, in the recent quarter and modestly in the full year, the margin cooperation experience was due to lower revenue resulting from the curtailment in the USA and Kenya and the Dixie Valley outage, which returned to full operation towards the second half of the fourth quarter of 2025. Excluding the impact of curtailment in the U.S. and international, gross margin of the electricity segment was higher by 2.2% and 1.8% in the fourth quarter and the full year of 2024.
Speaker Change: Moving to slide eight.
Speaker Change: Gross margin for the electricity segment was 34, 9% and 34, 6% in the fourth quarter and full year.
Speaker Change: <unk> in the recent quarter and modestly in the full year. The margin comparison experience was due to lower revenue, resulting from the curtailment in the USA and Canada.
Speaker Change: And the Dixie Valley outage, which returned to full operation towards the second half of the fourth quarter of 2024.
Speaker Change: Excluding the impact of curtailments in the U S and international gross margin of the electricity segment was higher by two 2% and one 8% in the fourth quarter and the full year of 2024, respectively.
Ozzie Ginzburg: We expect the curtailment we saw in Q4 to continue in 2025, as the major T-line is being replaced in Nevada during the year. In addition, the recent wildfires in California caused a reduction in demand for electricity in the region and resulted in overloads on the grid that forced grid operators to curtail part of the supplied power. We currently expect total revenue in 2025 to be negatively impacted. by 10 to $15 million in the US. The impact was taken into consideration in our 2025 Revenue Guide. In the product segment, gross margin of 18.4% in the full year increased by 500 basis points versus last year.
Speaker Change: We expect the curtailment, we saw in Q4 to continue in 2020 sites as major tea line is being replaced in Nevada during the year.
Speaker Change: In addition.
Speaker Change: The recent wildfires in California caused a reduction in demand for electricity in the region and resulting in the overall load on the grid that fourth grid operators to curtail part of the supply power.
Speaker Change: We currently expect total revenue in 2025 to be negatively impacted by $10 million to $15 million in the U S.
Speaker Change: The impact was taken into consideration in our 2025 revenue guidance.
Speaker Change: In the product segment gross margin of 18, 4% in the full year increased by 500 basis points versus last year.
Ozzie Ginzburg: We have improved our margin in 2024 through better contract pricing and looking into 2025, we expect to see margins between 18% to 20%. The energy storage segment reported gross margin of 9.5% and 10.9% during the fourth quarter and full year, respectively. marking a significant improvement versus prior year. As Doron previously mentioned, this improved performance was driven by our continued progress to transition the revenue and margin profile of... As we have achieved greater degree of balance between our merchant market exposure and tolling contracts. Also, in the fourth quarter, we saw better merchant prices at PGM. And we continue to see improved prices also in the first two months of 2025 at these markets.
Speaker Change: We have improved our margin in 2024 through better contract pricing and looking into 2025, we expect to see margin between 18% to 20%.
Speaker Change: The energy storage segment, we reported gross margin of nine 5% and 10, 9% during the fourth quarter and full year.
Speaker Change: <unk>.
Speaker Change: Marking a significant improvement versus prior year.
Speaker Change: It's the whole previously mentioned this improved performance was driven by our continued progress to transition the revenue and margin profile of this segment as we have achieved a greater degree of balance between our merchant market exposure and tolling contract.
Speaker Change: So in the fourth quarter, we saw better merchant prices in PJM.
Speaker Change: And we continue to see improved prices also in the first two months of 2025 eight these markets.
Ozzie Ginzburg: Breaking down adjusted EBITDA at the segment level on slide 9. where you can see significant increase in full year 2024 at all three segments. The electricity segment generated 89% of Ormat's total consolidated adjusted EBITDA in 2024. The product segment contributed 6%. And the energy storage segment accounted for 5% of the total adjusted. The conciliation of EBITDA and adjusted EBITDA provided in the appendix. in the back of the presentation.
Speaker Change: Breaking down adjusted EBITDA at the segment level on slide nine.
Speaker Change: Where you can see significant English in full year 2024.
Speaker Change: All three segments.
Speaker Change: Electricity segment generated 89% of walnuts total consolidated adjusted EBITDA in 2024.
Speaker Change: The product segment contributed 6%.
Speaker Change: And the energy storage segment accounted for 5% of the total adjusted EBITDA.
Speaker Change: A reconciliation of EBITDA and adjusted EBITDA provided in the appendix slides in the back of the presentation.
Ozzie Ginzburg: Moving to slide 10. In the fourth quarter, we recorded a $20 million in income related to tax benefits compared to $18.7 million last quarter. Also, in the fourth quarter, we recorded a $20.4 million ITC benefit in the income tax line related to the three storage facilities. Yves Flemington Battle.net and Montague. In the fourth quarter, we collected $46.7 million in cash for the Battle.net We anticipate that we will receive in 2025 up to $160 million in cash proceeds related to PTC and ITC benefits. Many from tax equity transactions for the Hebrew complex. ITC Benefits for Storage Assets that will COD in 2025, and PTC Transfer.
Speaker Change: Moving to slide 10 in the fourth quarter, we recorded a $20 million in income related to tax benefit compared to $18 $7 million last year.
Speaker Change: Also in the fourth quarter, we recorded a $24 million.
Speaker Change: ITC benefits in the income tax line.
Speaker Change: Added to the three storage facilities.
Speaker Change: Sean.
Speaker Change: Bottlenecks and Montague.
Speaker Change: In the fourth quarter, we collected $46 7 million cash for the bottleneck I can see we anticipate that we will receive in 2025 up to $160 million in cash proceeds related to PTC and ITC benefits.
Speaker Change: Mainly from tax equity transaction for the Heber complex.
Speaker Change: <unk> for storage assets that will be in 2025.
Speaker Change: And PTC transfers.
Ozzie Ginzburg: We expect Ormat's tax rate will be positively impacted by ITC benefits in 2025. And for modeling purposes, we expect the annual tax benefit rates to be positive of 5% to 10%. This race excludes any changes in law and or one Chinese.
Speaker Change: We expect a tax.
Speaker Change: Tax rates will be positively impacted by ITC benefits in 2025.
Speaker Change: And for modeling purposes, we expect the annual tax benefit rate to be positive of 5% to 10%.
Speaker Change: This slide exclude any changes in law and a one time event.
Ozzie Ginzburg: Looking at slide 11, our net debt as of December 31st, 2024, was $2.2 billion, equivalent to four times net debt to EBIT. The leverage decrease compared to earlier this year was supported by improved divida and 32.8% increase in cash flow from operation compared to 2020 Cash and Cash Equivalents and Restricted Cash and Cash Equivalents as of December 31, 2024 was approximately $206 million, compared to $288 million at the end of 2020. Slide 11 breaks down our use of cash flow for the last 12 months, illustrating Ormat's ability to generate strong cash flow to reinvest in and strategically grow the business while simultaneously servicing our debt obligation and returning capital to our shareholders.
Speaker Change: Looking at Slide 11, our net debt as of December 31, 2024 was $2 2 billion.
Speaker Change: We will end two four times net debt to EBITDA.
Speaker Change: The leverage decreased compared to earlier this year was supported by improved EBITDA and.
Speaker Change: 32, 8% increase in cash flow from operations compared to 2023.
Speaker Change: Cash and cash equivalents and restricted cash and cash equivalents as of December 31, 2024 was approximately $206 million.
Speaker Change: Compared to $288 million at the end of 2023.
Speaker Change: Slide 11 breaks down our use of cash flow for the last 12 months illustrating our ability to generate strong cash flow to reinvest in and strategically grow the business.
Speaker Change: Simultaneously service, our debt obligation and returning capital to our shareholders.
Ozzie Ginzburg: Our cash flow from operation increased by 32.8% to $411 million dollars supported by the improved performance of our assets. Inc's collection in Kenya and Honduras, and the monetization of bottleneck ITC at $0.93 on the Our total debt, as of December 31st, 2024, was approximately $2.4 billion net of deferred financing costs. And it's presented on slide 30 in the appendix. which are from the tenant's schedule. The average cost of our debts for the company stands at 4.66%. The majority of our debt liabilities are in fixed interest. providing for good stability and creating protection from fluctuation in the market.
Speaker Change: Our cash flow from operation increased by 32, 8% to $411 million supported by the improved performance of our assets increased collection and Kenyan Lula.
Speaker Change: The monetization of bottleneck ITC at 93 cents on the dollar.
Speaker Change: Our total debt as of December 31, 2024 was approximately $2 $4 billion.
Speaker Change: Net of deferred financing costs.
Speaker Change: And is presented on slide 30 in the appendix.
Speaker Change: Which are the payment schedules.
Speaker Change: The average cost of our debt for the company.
Speaker Change: At four point, 66%.
Speaker Change: The majority of our debt liabilities are at fixed interest rates, providing for good stability.
Speaker Change: And creating protection some fluctuation in the market.
Ozzie Ginzburg: Moving to slide 12, we have approximately $667.1 million of total available equities. Our total expected capital expenditure for 2025 are approximately $570 million as listed in slide 31 in the account. We plan to invest approximately $355 million in the electricity segment for construction, exploration, drilling, and maintenance. We also plan to invest $200 million for the construction of our storage assets during 2025. As we continue to progress with executing our growth plan, we have shown the ability to consistently increase our cash generation profile, while combined with the expected cash from utilizing the tax benefits, we'll fund our capital.
Speaker Change: Moving to slide 12, we have approximately $667 1 million of total available liquidity.
Speaker Change: Our total expected capital expenditure for 2025 are approximately 570 million digital in slide 31 in the appendix.
Speaker Change: We plan to invest approximately $355 million in the liquids segment. So construction exploration drilling and maintenance. We also plan to invest 200 million for the construction of our storage assets during 2025.
Speaker Change: As we continue to progress with executing our growth plan, we have shown the ability to consistently increase our cash generation profile, while combined with the expected cash from utilizing the tax benefits will fund our capex.
Ozzie Ginzburg: We continue to maintain excellent liquidity and have ample access to additional capital as On February 26, 2025, our Board of Directors declared, approved, and authorized payments of quarterly dividends of $0.12 per share, payable on March 26, 2025, to shareholders of record as of March 12, 2025. In addition, the company expects to pay a quarterly dividend of $0.12 per share in each of the next three quarters.
Speaker Change: We continue to maintain excellent liquidity and have ample access to additional capital as needed.
Speaker Change: On February 26, 2025, our board of directors declared approved and authorized payment of quarterly dividends of <unk> <unk> per share payable on March 26, 2025 to shareholders of record as of March 12 2025.
Speaker Change: The company expects to pay a quarterly dividend of <unk> 12 per share in each of the next three quarters.
Ozzie Ginzburg: That concludes my financial overview.
Speaker Change: That concludes my financial overview, I would like now to turn the call over to Darren to discuss some of our recent developments.
Doron Blachar: I would like now to turn the call over to Doron to discuss some of our recent developments. Thank you. Turning to slide 14 for a look at our electricity segment operating portfolio. Since the beginning of 2024, we successfully added 133 megawatts of new net capacity organically as well as through strategic, accretive energy. Generation increased 3.5% and excluding cartelmen, our generation grew by 10%. This growth was driven by our acquired assets, improved performance at Puna, a full year of operations at Heber One at higher capacity, the repower of Biwawi, and the increase in Onkara capacity to nearly 150 megawatts in the latter half of 2020.
Darren: Thank you Oscar.
Darren: Turning to slide 14 for a look at our electricity segment operating portfolio.
Darren: Since the beginning of 2024, we successfully added 133 megawatts of new net capacity organically as well as through strategic accretive M&A.
Darren: Generation increased three 5% and excluding curtailment, our generation grew by 10%.
Darren: This growth was driven by our acquired assets improved performance at Fuller.
Full year of operation of the <unk>, one the tightest capacity the report will be while we and the interest in our capacity to nearly 150 megawatts in the latter half of 2024.
Doron Blachar: Earlier this month we announced a successful COD for the EGEN geothermal power plant, which we jointly own with PT Metco Power Indonesia. The agent facility began operation with its first phase, delivering 35 megawatts to the Java grid, with our share of the facility being 17 megawatts.
Darren: Earlier this month, we announced the successful CSD for the Aegean geothermal power plant, which we jointly own with BT, Mexico Paolo Indonesia.
Darren: The agent facility began operation with its first phase delivering 35 megawatts to the Java do it with our share of the facility being 17 megawatts.
Doron Blachar: In 2024, we secured multiple land parcels in Nevada and Utah to support our short and long-term growth plans for geothermal energy in the U.S. This reinforces our commitment to advancing renewable energy solutions and meeting the increasing demand for sustainable energy in these key markets. Moving to slide 50.
Darren: In 2024, we secured multiple land parcels in Nevada, and Utah to support our short and long term growth plans for geothermal energy in the U S.
Darren: This reinforces our commitment to advancing renewable energy solutions and meeting the increasing demand for sustainable energy in these key markets.
Darren: Moving to slide 15.
Doron Blachar: Subsequent to year-end, we are now signing a favorable 10-year PPA with Calpine Energy Solutions to provide up to 15 megawatts of clean, renewable energy from our MAMOS2 geothermal power plant. We are currently negotiating PTAs for more than 250 megawatts with hyperscalers with rates exceeding $100 per megawatt hour. These agreements will secure our growth and revenues post-2020.
Darren: Subsequent to yearend, we announced signing a favorable 10 year PPA with Calpine energy solutions to provide up to 15 megawatts of clean renewable energy from our models to geothermal power plant.
Darren: We are currently negotiating ppas for more than 250 megawatts with hyper scaler with rates exceeding $100 per megawatt hour.
These agreements will secure our growth in revenues post 2020.
Doron Blachar: Turning to slide 16, our product segment backlog reached a record of $340 million, up 124% compared to Q4 of 2020. This increase was largely driven by the signing of a large EPC contract in New Zealand for the Timihi 2A 101 MW power plant and the Dominica BOT project. Revenues from this backlog will be recognized over the next two years.
Darren: Turning to slide 16, our product segment backlog reached a record of $340 million.
Darren: 124% compared to Q4 2023.
Darren: This increase was largely driven by the signing of a large EPC contract in New Zealand.
Darren: The <unk> to a 101 megawatt power plant and the Dominica VLT project.
Darren: Revenues from this backlog will be recognized over the next two years.
Doron Blachar: Moving to slide 17, our energy storage segment saw higher revenues on both the quarterly and full year basis, benefiting from facilities that came online in 2023 and 2025. including the ACE Flemington We expect this performance to continue in 2025 as we benefit from the COD of our Bottleneck and Montague Storage Facilities. Additionally, we made significant progress in transitioning our storage segment to a more predictable portfolio with stronger profitability. This is highlighted by the RAI agreement with the City of Riverside for our shared 80 MW, 320 MWh facility and our first two tolling agreements in Texas for the Lower Rio and Burdock facilities, each with a generating capacity of 60 MW or 120 MWh.
Darren: Moving to slide 17, our energy storage segment, so higher revenues on both a quarterly and full year basis benefiting from facilities that came online in 2023 and 2024.
Darren: <unk> hundred Remington facility.
Darren: We expect this performance to continue in 2025, as we benefit from the <unk> bottleneck and multi use storage facilities.
Darren: Additionally, we made significant progress in transitioning our storage segment to a more predictable portfolio with stronger profitability.
Darren: This is highlighted by the hour agreement with the CTO Riverside for sure 80 megawatts 320 megawatt hour facility in our first two tolling agreements in Texas for the lower Rio and buildup facilities, each with the generating capacity of 50 megawatts or 120 megawatts hour.
Doron Blachar: Moving to slide 9. We continue to remain on track to have our portfolio capacity target reach between 2.6 gigawatts to 2.8 gigawatts by year-end 2020. This year, we added 253 megawatts of new capacity, with 133 megawatts in our electricity segment and 120 megawatts in the energy store. This aligns with our long-term capacity targets for 2028 and we expect it will straighten our earnings generation in 2025 and beyond. We expect a capacity CAGR of 14% to 16%, primarily driven by the strong U.S. market, where we see increasing demand for baseload electricity.
Darren: Moving to slide 19.
Darren: We continue to remain on track to have our portfolio capacity target reach between two six gigawatts to two eight gigawatts by year end 2028.
Darren: This year, we added 253 megawatts of new capacity with 173 megawatts in our electricity segment and 120 megawatts in the energy storage.
Darren: This aligns with our long term capacity target for 2028, and we expect it will strengthen our earnings generation in 2025 and beyond.
Darren: We expect the capacity CAGR of 14% to 16%, primarily driven by the strong U S market, where we see increasing demand for base load electricity.
Doron Blachar: Our focus remains on capturing this demand through our electricity and storage technology. Turning to slide 20 and 21, which displays our geothermal and hybrid solar PV projects on the wall. We anticipate adding an additional 158 megawatts to our generating capacity from geothermal and solar PV projects by the end of 2020.
Darren: Our focus remains on capturing this demand.
Darren: As Christie and storage segment.
Darren: Turning to slide 'twenty, and 'twenty, one, which displays our geothermal and hybrid solar PV projects underway.
Darren: We anticipate adding an additional 158 megawatts of generating capacity from geothermal and solar PV projects by the end of 2026.
Doron Blachar: Moving to slide 22 and 23. We currently have six projects under development in our energy storage segment, which are expected to add 385 MW or 1.3 GWh to our portfolio. Our focus remains on balancing contracted revenues and merchant market pricing in our storage portfolio. We removed the Louisa project due to interconnection delays, which have pushed the project's COD to 2020. We are discussing alternatives with the grid operator and will update as needed.
Darren: Moving to slide 22, and 'twenty three we currently have six projects under development, you know energy storage segment, which are expected to add 385 megawatts or one three gigawatt hour to our portfolio.
Darren: Our focus remains on balancing contracted revenues and merchant market pricing our storage portfolio.
Darren: We removed the Luisa project to interconnection delays, which have pushed the project <unk> 2029.
Darren: We are discussing alternatives with the grid, operator, and we will update as needed.
Doron Blachar: Additionally, we added two new projects in Israel awarded through Tory agreements in partnership with Allied Infrastructure Ltd. a leading infrastructure company Our share of the project is 150 megawatts or 600 megawatt hours.
Darren: Additionally, we added two new projects in Israel awarded through tolling agreements in partnership with Allied infrastructure entity.
Darren: Adding infrastructure company in Israel.
Darren: Our share of the project is 150 megawatts or 600 megawatt hour.
Doron Blachar: Please turn to slide 24 for a discussion of our 2025 guide. We expect total revenues to increase by 9% year over year at the midpoint, ranging between $935 and $975 million. Electricity segment revenues are projected to be between $710 and $725 million. product segment revenues between $172 and $187 million and energy storage revenues between $53 and $63 million. Adjusted EBITDA is expected to increase by approximately 5% at the mid-year. ranging between $563 and $593 million with annual adjusted EBITDA attributable to minority interest at approximately $23 million.
Darren: Please turn to slide 24 for a discussion of our 2025 guidance.
Darren: We expect total revenues to increase by 9% year over year at the mid.
Darren: Point, ranging between 935 and $975 million.
Darren: Electricity segment's revenues of logistics to be between 710 and $725 million.
Darren: Product segment's revenues between 172 and $187 million.
Darren: Energy storage revenues between 53 and $63 million.
Darren: Adjusted EBITDA is expected to increase by approximately 5% at the midpoint ranging between 563 and 593 million.
Darren: With annual adjusted EBITDA attributable to minority interest at approximately $23 billion.
Doron Blachar: I will end our prepared remarks on slide 24. In light of the fluid policy situation in the United We have taken proactive measures to ensure our geothermal project are safe harbors for PTC eligibility through 2028 and IPC benefits for energy storage through 2026 and in some cases even beyond. These steps are crucial as we navigate the evolving landscape of executive orders related to the IRA tax credits and geothermal energy production, and create confidence in our growth trajectory and our goals of achieving 2.6 to 2.8 gigawatts of generating capacity by 2050. We do see exciting growth opportunities for geothermal energy as part of the National Energy Emergency Executive Orders, with potential easing of project permitting timelines and increased focus on geothermal research and development.
Darren: I will end our prepared remarks on slide 25.
Darren: In light of the fluid policy situation in the United States, we have taken proactive measures to ensure our geothermal project of safe Harbor for PTC eligibility through 2028.
Darren: An ICC benefits for energy storage through 2026 and in some cases even beyond.
Darren: These steps are crucial as we navigate the evolving landscape of executive orders related to the higher rate tax credits and geothermal energy production and create confidence.
Darren: Growth trajectory and our goals of achieving two six to two eight gigawatts of generating capacity by 2028.
Darren: We do see exciting growth opportunities for geothermal energy as part of the National Energy Emergency executive orders with potential easing of project permitting time by an increased focus on geothermal to research and development.
Doron Blachar: These factors, along with the growing global demand for renewable energy, reinforces our confidence in geothermal energy's role in the transition to a cleaner energy To summarize, we are proud of our accomplishments in 2024 and remain focused on our long-term goals target while delivering strong financial results. As we look ahead, we anticipate growing demand for renewable energy to support AI data centers and the transition to a cleaner energy. We believe we can secure improved product return through higher PPA pricing and tolling agreements. driving improved profitability for We look forward to continuing our multi-year growth path and consistently delivering enhanced shareholders and stakeholder value as we execute our strategy.
Darren: These factors along with the growing global demand for renewable energy reinforces our confidence in geothermal energy its role in the transition to a cleaner energy future.
Darren: To summarize we are proud of our accomplishments in 2024 and remain focused on our long term growth targets, while delivering strong financial results.
Darren: As we look ahead, we anticipate growing demand for renewable energy to support AI data center and the transition to a cleaner energy future.
Darren: We believe we can secure improved product detail through higher PPA pricing and tolling agreements driving improved profitability for bulk.
Darren: We look forward to continuing our multiyear growth path and consistently delivering enhanced shareholder and stakeholder value as we execute our strategy.
Doron Blachar: This concludes our prepared remarks.
Darren: This concludes our prepared remarks, now I would like to open the call for questions.
Operator: Now I would like to open the call for questions. Operators. Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, simply press star 1 again. Please ensure you are not on speakerphone or muted when called upon. Thank you.
Darren: Operator please.
Darren: Thank you.
Darren: To ask a question. Please press star one on your telephone keypad to withdraw your question simply press Star. One again. Please ensure you are not on speaker phone or mutated when called upon thank you.
Noah Kaye: Your first question comes from Noah Kaye with Oppenheimer. Your line is open. Good morning. Thanks for taking the questions. The first one, just how we should think about the electricity generation expectations for the electricity segment in the portfolio embedded in the 25 guide. It looks like most of the new projects you expect to come online are really kind of tail-end year. You mentioned some of the tail-end impacts, so it kind of looks like we should assume a fairly modest, maybe low single-digits increase in generation year-over-year, or possibly slattish, but it also looks like that could set up perhaps something close to double-digit growth in generation in 26.
Speaker Change: Your first question comes from Noah Kaye with Oppenheimer. Your line is open.
Noah Kaye: Hi, good morning, Thanks for taking the questions.
Noah Kaye: The first one just how we should think about the electricity.
Noah Kaye: Generation expectations.
Noah Kaye: For the electricity segment in the portfolio.
Noah Kaye: <unk>.
Noah Kaye: Embedded in that 25 guide.
Noah Kaye: It looks like most of the new projects you expect to come online or are really kind of tail end of the year you mentioned some of the curtailment impact so.
Noah Kaye: It kind of looks like Oh, we should assume a fairly modest Ah maybe low single digits increase in generation year over year or possibly flattish.
Noah Kaye: But it also looks like that could set up perhaps something close to double digit growth in generation and 26.
Doron Blachar: Is that a fair way to think about it? How should we assume? I don't know. Thank you. I think you got it exactly right. We didn't have too many projects coming online at the end of fall and beginning of May. We do see all the enhancement that we're doing for the NL projects coming on towards the end of the year. And as we said, we do see some more curtailment in the U.S. than what we've seen in the past. So all in all, this year, as presented in the guidance, we see similar generation, maybe a little bit of an uptick.
Noah Kaye: Is that a fair way to think about it how should we assume.
Noah Kaye: I don't know thank you.
Noah Kaye: I think you've got it.
Noah Kaye: Exactly exactly right.
Speaker Change: And have any too many projects coming online and therefore in beginning of <unk>, we will see.
Speaker Change: The enhancements that will be linked to the Enel project coming on towards the end of the year.
Speaker Change: And as I said, we do see some more.
Speaker Change: More curtailments in the EU have been listed in the past, but all in all this year.
Speaker Change: As noted in the guidance does assume a little generation.
Speaker Change: Okay.
Doron Blachar: And 26, the impact will be basically following the power plant coming online towards the end of the year, that would have the positive impact for 26. and all the projects that we've listed that will come on June 26th as well.
Speaker Change: 26, the impact will be basically following the power plants coming online towards the end of the year that would have the positive impactful.
Speaker Change: Got it.
Speaker Change: All the projects that we've listed some of them on June 26.
Doron Blachar: Okay, maybe Doron I will add a few more things, maybe Noach if you don't mind I'll add a few more things. While the curtailment in the U.S. we've been told by NV Energy that it will be towards the second half of the year, this thing can move also to the next year, it can happen from time to time and then this year will be higher than, that allow us to be higher end on the range. Also both in January and February we saw lower curtailment than what we anticipated in Kenya, so from a generation perspective there are a few things that can move us towards the higher end of the range, but as you said rightfully so, right now we're seeing maybe a slight up versus last year, mostly as a result of the Dixie assets coming back online.
Speaker Change: Okay, maybe the ROI.
Speaker Change: Fuel.
Speaker Change: No I think if you don't mind on Yamal thing.
Speaker Change: Great.
Speaker Change: While the curtailment in the U S. We've been told by NV energy that it will be towards the second half of the year. This thing can move off of the next year. It can happen from time to time and then this year would it be higher than that allow us to be higher end of the range.
Speaker Change: Also both in January and February we saw lower curtailment, and what we anticipated in Kenya.
Speaker Change: From a generation perspective, there are a few things that can move us towards the higher end of the range, but the.
Speaker Change: As you said rightfully so right now we are.
Speaker Change: It may be slightly up versus last year.
Mostly as a result of the Dixie assets coming back online.
Speaker Change: Okay perfect.
Unknown Executive: Perfect.
Speaker Change: Okay.
Doron Blachar: You know, it embedded in the CapEx guide. is a is a doubling year over year of exploration and preliminary drilling activities. Can you just Comment on that program a little bit, you know, what would drive the increase in activities and, you know, to what extent you would consider this kind of, you know, truly early stage versus, you know, something that could help accelerate the portfolio growth over, say, the next three to four years. Right, so we have been working to increase our explorations activity over the last year. And we've changed the way we approach the exploration starting in 2021.
Speaker Change: Embedded in the Capex guide.
Speaker Change: Is a is a doubling year over year.
Speaker Change: Exploration in the preliminary drilling activities.
Speaker Change: Can you just.
Speaker Change: Comment on that program a little bit.
Speaker Change: No.
Speaker Change: What would drive the increase in activities and.
Speaker Change: To what extent you would consider this kind of truly early stage versus.
Speaker Change: It's something that could help accelerate the portfolio growth over say the next three to four years.
Speaker Change: Good morning.
Speaker Change: So.
Speaker Change: We have.
Speaker Change: We are working to increase our exploration activity over the last.
Speaker Change: Year.
Speaker Change: We've changed the way we approach.
Speaker Change: Relation starting in 'twenty, one basically starting to focus on coal.
Doron Blachar: Basically, we're starting to focus on core wells before drilling full-size wells. And we've been drilling between 8 to 12 core wells in the last two years, and that will happen in the next coming years. Each core campaign is about three to four wells per site. So these sites, and once the core wells campaign is successful, and the work is successful, then we move to the full-size. So it is our plan to increase exploration. We see the PPA pricing above 100 today. So we feel very comfortable to increase the significance of the exploration. And also on the permitting side, we have been able to get permitting faster for the 4Wheels campaign, which reduces the risk of the full-size drilling.
Speaker Change: Before.
Speaker Change: Full sized world.
Speaker Change: We have been really between eight to 12.
Speaker Change: In the last two years and that could happen coming.
Speaker Change: Coming yield.
Speaker Change: Core companion is about three to four wells per site.
Speaker Change: This.
Speaker Change: Coal will be successful.
Speaker Change: The success was then we move to the food side.
Speaker Change: So it is our debt with our plan to improve percolation, we see the PPA pricing above 100 today.
Speaker Change: So let's see.
Speaker Change: Very comfortable to increase significantly the escalation.
Speaker Change: Yes.
Speaker Change: And also on the permitting side.
Speaker Change: We have been able to get permitting faster for that four wolfcamp in which only.
Speaker Change: Reduces the risk of the drilling.
Doron Blachar: And we expect that with the Trump administration, we'll be able to get additional permits for full-size and for constructed power plants faster. The exploration that we are doing this year, previous year, and obviously in the coming years, we'll have the growth coming in the following years, and we are focusing on many, many greenfields that were So it's a bit lower development in the past, but nowadays we're focusing to increase and expand the development. We want to increase our staffing in the U.S. to support this growth. We do see the power plant, and as we move forward, we will update the market, obviously, once we confirm the results.
Speaker Change: And with that.
Speaker Change: The Trump administration will be able to get.
Speaker Change: Additional permits for foods and for our partners faster.
Speaker Change: The fruition of that we're doing.
Speaker Change: D C. A previous year, obviously in the coming years, we will have the growth coming in the following years.
Speaker Change: And we are focusing on many many greenfield.
Speaker Change: Well.
Speaker Change: Both of these.
Speaker Change: The development in the past, but nowadays.
Speaker Change: This includes <unk> and expand the development. We've also increased our staffing.
Speaker Change: In the U S to support this growth.
Speaker Change: And we do see these power plants as we move forward and we will update the market honestly want to confirm that.
Unknown Executive: Yep.
Speaker Change: Yep.
Doron Blachar: Just to get one more in. You talked about the 250 megawatts of potential PPA contracting with data center hyperscale. and the pricing expectations there. And I think you mentioned, Doron, that you would expect those to be for offtakes post-2028. Can you just comment on, A, reasons for that timing and, B, any kind of sense of... expected tenor length of the agreement And, you know, possible location of the agreements, would these necessarily be for centers located near production, or would these perhaps be, you know, more for, for, let's call them sort of, you know, virtual offtakes?
Speaker Change: Just to get one more in.
You talked about the 250 megawatts of potential PPA contracting with data center Hyperscale orders.
Speaker Change: And the pricing expectations, there and I think you mentioned are on that.
Speaker Change: We'd expect those to be or off takes a post 2028.
Speaker Change: Can you just comment on <unk>.
Speaker Change: A reasons for that timing.
Speaker Change: And b any kind of sense of it.
Expected tenor length of the agreements.
Speaker Change: And you know possible location of agreements with.
Speaker Change: With these necessarily be four.
Speaker Change: Centres located near production or were these perhaps be.
Speaker Change: No more for or let's call them sort of virtual optics.
Doron Blachar: for plants located elsewhere in the country. Oh, The reason we're talking about Falling 28 is, if you remember three years ago, we signed a portfolio PTA with Envy Energy and with 50 Power that covered the period until 28. And so we are actually looking for the duration after that. On top of that, when we just talked about the exploration, we believe these greenfields will come towards the end of 2028 or probably the beginning of 2029, some of them. So that's the place that we are looking. That's why we're talking following 2028. And the ones that we are talking, some of them are...
Speaker Change: You know for our plants are located elsewhere in the country.
Speaker Change: So.
Speaker Change: The reason we're talking about following 28, if you remember three years ago, we defined the input for the PPA with NV energy.
Speaker Change: Superpower that covered the period until 2008.
Speaker Change: So we actually look at what the duration after that Aldo.
Speaker Change: That's what we just talked about its duration.
Speaker Change: We believe these.
Greenfield will come towards the end of 'twenty April probably went at the beginning of 'twenty nine some of them.
Speaker Change: So that took place, but we are looking.
Speaker Change: Looking at that's why we're talking following 28.
Speaker Change:
Okay.
Speaker Change: The ones that we're talking some of them.
Speaker Change: No.
Doron Blachar: looking for us to sign contracts with them with the local utility. We actually prefer to do direct negotiations with us, using the system, the network to get the electricity. We are not negotiating somebody's decision that will build a data center adjacent to our facility, but it is definitely something that we are looking at across our fleet. There are places that we can actually combine the two together. After this stage, most of the discussions we have are combining the utilities in sharp form. Very helpful caller.
Looking.
Speaker Change: Who asked to sign contracts with them.
Speaker Change: Yeah.
Speaker Change: Local utility.
Speaker Change: Okay.
Speaker Change: Direct negotiations with us using the system the network to get the electricity.
Speaker Change: Well no negotiating somebody.
Speaker Change: It will be in the data center adjacent to our facility.
Speaker Change: But it is definitely something that we're looking at.
Speaker Change: Across our fleet.
Speaker Change: There are places that we can actually combine the two together.
Speaker Change: But at this stage in the north of the discussion that we have are combining.
Speaker Change: The utilities.
Speaker Change: In South Florida.
Speaker Change: Very helpful color I'll turn it over thank you.
Unknown Executive: I'll turn it over. Thank you.
Justin Clare: Thank you, Dr. The next question comes from Justin Clare with Roth Capital Partners. Your line is open. All right, thanks for the time. So I wanted to start out here on the safe harbor. You had mentioned that you have safe harbored all the geothermal projects with CODs through 2028. I was wondering if you could share how many megawatts that includes. Is that just the projects that you have named in your deck, or is that a larger group of projects that would enable you to get to the 2028 targets that you have?
Luca: Thank you Luca.
Speaker Change: The next question comes from Justin Clare with Roth Capital Partners. Your line is open.
Justin Clare: Alright, thanks for the time.
Justin Clare: So I wanted to start out here on your Safe Harbor, you had mentioned that you have safe harbored our all the geothermal projects with Cod's through 2028 was wondering if you could share how many megawatts that includes.
Justin Clare: Is that just the projects that you have named in your deck or is that a larger group of projects that would enable you to get to the 2028 targets that you have.
Ozzie Ginzburg: And then just wondering, as we move through 2025, do you think you can extend the safe harbor time frame beyond 2028 into 2029 for geothermal, or can you extend the storage safe harbor projects beyond 2026? Good morning, Justin, that's a great question. As you can see from our deck, between now and 2028, we need to add close to 400 megawatts of solar and geothermal. And when you look at the named project, there is much less than that, which means that all the drilling that Doron just spoke about a few minutes ago, that should enable us to add somewhere around 250 megawatts between 2027 and 2028, all of that was already saved harbor.
Justin Clare: And then just wondering as we move through 2025 do you think you can extend the safe Harbor timeframe beyond 2028 and into 2029 for geothermal or can you extend the lead.
Justin Clare: Storage Safe Harbor projects beyond 2026.
Speaker Change: Good morning, Jeff That's a great question as you can see from our deck.
Speaker Change: Now in 2028, we need to add close to 400 megawatts of solar and geothermal.
Speaker Change: When you look at the named project is much less than that which means that all the drilling that Don just spoke about a few minutes ago that should enable us to add somewhere around 250 megawatts between 2027 and 2028 all of that was already safe Harbor, so when you're talking about geothermal.
Ozzie Ginzburg: So when you talk about geothermal, we saved harbor many projects that are not on the list, everything that we're doing, core holes already, or full-size wells, we also did that, and we're also doing it through self-equipment. On the storage side, we are also, as we speak today, looking to get four more projects in addition to what you see on the list in Texas and California. And we already safe harbored two more projects that are not on the list. So there will be at least six more projects that are not on the list that will be safe harbored in the next or already harbored in the next few months.
Speaker Change: We saved Hubble many projects that are not on the list everything that we're doing cohorts already or full size, whereas we also.
Speaker Change: Did that and we're also doing it through a sale of equipment.
Speaker Change: On the storage side, we are also as we speak today looking too.
Speaker Change: Get full more ports.
Speaker Change: In addition to what you see on the list.
Speaker Change: Texas and California.
Speaker Change: And we already safe Harbor, two more projects that are not on the list. So there will be at least six more projects that the rest of the list that it will be safe harbored in the next already hub within the next few months.
Ozzie Ginzburg: And we will do it also through a start of construction.
Speaker Change: And we will do it also through a start of construction, we will look at through 2025, what else can we do in order to secure the additional 2029 day project.
Ozzie Ginzburg: We will look at through 2025, what else can we do in order to secure additional 2029 projects. That's all gone.
Speaker Change: That's our goal.
Unknown Executive: Okay, great. Very helpful.
Okay, Great very helpful. And then wanted to touch on the product segment here wondering in 2025 are you expecting a meaningful contribution from the 210.
Ozzie Ginzburg: And then I wanted to touch on the product segment here. I'm wondering, in 2025, are you expecting a meaningful contribution from the $210 million contract for the New Zealand project? I think the revenue contribution for that project was initially going to be more in 2026 and 2027, but it seems like that might be moving a little bit faster than than previously expected. And then just wanted to touch on the margins as well. Product segment margin in Q4, very strong at 24%. Can you talk about your gross margin expectation for the product segment in 2025 and what you're seeing in the backlog?
$10 million contract and for the New Zealand project I think the revenue contribution for that project was initially going to be more in 2026, and 2027, but it seems like that might be moving a little bit faster than.
Speaker Change: Than previously expected.
Speaker Change: And then just wanted to touch on the margins as well.
Speaker Change: Product segment margin in Q4 very strong at 24%.
Speaker Change: Can you talk about your gross margin expansion.
Speaker Change: <unk> for the product segment in 2025, and kind of what youre seeing in the backlog.
Ozzie Ginzburg: Thanks, great question. So, when we have a very large project like that, you know, it spans over two and a half years, which started basically in November when we actually got the TPE office to proceed, and the revenue is spread roughly evenly towards the entire period. So, we see revenues from the TPE project in 2005, 2006, and 2007 as well. So, it is spread across. Usually, we would start with engineering, then manufacturing, then the construction part. And so 26 would probably be the higher with the most revenue out of the contract, but 25 had a significant amount.
Speaker Change: Thanks.
Speaker Change: One question so.
Speaker Change: When we have.
Speaker Change: Really large projects.
Speaker Change: It spans over.
Speaker Change: Two and a half year.
Speaker Change: Which started basically.
Speaker Change: When we actually get the notice to proceed.
Speaker Change: Neil.
Speaker Change: Sure.
Roughly evenly.
Speaker Change: Towards the prior period revenues from the Dominion project in Germany.
Speaker Change: Five six and seven.
Speaker Change: Glen.
Speaker Change: As for the process.
Speaker Change: Usually we would start with engineering and manufacturing and then the construction part.
Speaker Change: So <unk> probably be the most revenue out of the contract, but 25 had a significant amount of growth.
Ozzie Ginzburg: revenue from TV as well. And regarding the margin that you said, I think we should look at on the annual basis, quarter margins sometimes are impacted by specific projects that can do better or worse depends on the situation. Q4 was a better one to have 20, more than 24% margin. We are targeting an 8, 10 to 20% margin. Unknown Speaker 0241-2017 © 2013 Transcription Outsourcing, LLC. Got it. Okay. Very helpful.
Speaker Change: Revenue for <unk> as well.
Speaker Change: And regarding the volatility.
Speaker Change: Sure Luke.
Speaker Change: The annual basis quarter margin.
Speaker Change: The impact by specific projects that can do better or worse, depending on the situation in Q4, it was a better.
Speaker Change: 2024% margin.
Speaker Change: We're targeting an eight in total.
Speaker Change: 20% margin.
Speaker Change: Within the range that we had the 24, but that's the.
Speaker Change: Cognizant will look like.
Speaker Change: Got it okay very helpful. Thank you.
Unknown Executive: Thank you.
Speaker Change: Okay.
Julian Dumoulin Smith: The next, excuse me, the next question comes from Julian Dumoulin Smith with Jeffreys. Your line is open. Hey, good morning.
Operator: Excuse me. The next question comes from Julien Dumoulin Smith with Jefferies. Your line is open.
Hanna Velasquez: Hey, Good morning. This is Hanna Velasquez on for Julian Thanks for the update and great quarter.
Hannah Velazquez: This is Hannah Velazquez on for Julian. Thanks for the update and great quarter. I had a similar question to Noah at the beginning, just in terms of your assets in 2025 coming online towards the second half or later end of 2025. How does that impact you at DAHR? How would that get you potentially to the higher end of the range toward $593 million? Is any contribution expected from those 2025 assets or should we think about it largely driven by a full year contribution of the 2024 assets added being operational? I think what will put us towards the higher end of the range in the electricity segment specifically, it's not the additional of new assets.
Operator: So my question.
Speaker Change: At the beginning just in terms of your assets in 2025 coming online towards the second half or later on.
Operator: 25.
Operator: Or would it impact you at all.
Operator: But that got you potentially to the higher end of the range toward $5 93.
Operator: Is any contribution expected from those 2025 assets or should we think about it largely driven by a full year contribution of the <unk>.
Operator: 24 assets added being operational.
Operator: Yeah.
Operator: I think what will put us towards the higher end of the range in the electricity segment, specifically, it's not the additional of.
Operator: New assets, it's mainly the amount of curtailment, we will experience.
Doron Blachar: It's mainly the amount of curtailment we will experience in the US and in Kenya. We've been told by NV Energy that they will replace a large T-line in the second half of the year, actually in Q4, and also they will do some maintenance work in April. With that being said, this thing can shift between the years, and we're actually talking to them to see if they can smooth a little bit between the few years the maintenance. On the other hand, in Kenya, the plant, as you already know, is very close to get to 150 megawatts, which is full capacity, but we've seen a lot of curtailment during 2024.
Operator: India.
Operator: And in Kenya.
Operator: We have been told by NV energy that they will replace a large T line in the second half of the actually in Q4 and also they will do some maintenance work in April.
Operator: That being said this thing can shift between the years and we are actually talking to them to see if they can smoothen a little bit between the few years.
Operator: Maintenance, so thats sort of Arlington.
Operator: On the other hand in the.
Operator: Kenya.
Operator: The plant as you already know is very close to get to 150 megawatt which is full capacity but.
Operator: We've seen a lot of curtailment during 2020 for January and February curtailment towards significantly low oil. So again, if we continue to see lower curtailment in carrier throughout the year.
Doron Blachar: January and February, curtailment was significantly lower. So again, if we continue to see lower curtailment in Kenya throughout the year, that will be also very beneficiary and put us towards the higher end of the range. And weather can always impact us. I can tell you that in Q1, the weather was a little bit warmer than anticipated on the electricity segment. And we saw in February, we're now in Reno, Nevada, or close to it, and it was quite warm. On the other hand, when you talk about the higher end of the range as a whole, as a company, on the storage segment, the freeze that some of you guys experienced in January and February, we are very sorry for you guys, but I can tell you that for our storage segment, it was very beneficiary.
Operator: That will be also very beneficiary put us towards the higher end of the range and where there is also always it can impact us I can tell you that in Q1, the weather was a little bit warmer than anticipated in the <unk>.
Operator: On the electricity segment and we saw February we just.
Operator: In Reno, Nevada, or close to it that it was quite world.
Operator: On the other hand, when you talk about the higher end of the rate as a whole as a company.
Operator: The storage segment, the freeze that several of you guys experienced in.
Operator: January and February.
Speaker Change: Very sorry for you guys, but I can tell you that for our storage segment. It was very beneficiary. So whether could also impact us. So there is few things that can happen that can move us to the upper end of the range, it's not about <unk>.
Doron Blachar: So weather can also impact us. So there are a few things that can happen that can move us to the upper end of the range. It's not about CODs this year. Most of the CODs are towards the end of the year, and they will impact 2026. Hopefully that answers the question. Yeah, super helpful. And I'm glad to hear you all benefited from the freeze. I am in Texas. I did not.
This year most of the diesel towards the end of the year and they will impact 2026, hopefully that answered the question.
Speaker Change: Yes Super helpful and I'm glad to hear you all benefited from the freeze item in Texas I did not so just a follow up question on some of the retiring of the ongoing shale I know some of the other companies, saying look at have talked about being able to re negotiate higher off of that some of these repowering are you seeing a similar opportunity.
Doron Blachar: So just a follow up question on some of the repowerings you all are going through. I know some of the other companies we look at have talked about being able to renegotiate higher off of some of these repowerings. Are you seeing a similar opportunity? And if so, how meaningful is the upside there? Thank you. The recontracting that we see is very, the last recontracting that we did, that we announced was with Calpine for the Mammoth G2 facility. The Mammoth G2 facility and its DPA at the end of 26, starting 27, it's a DPA with a little bit lower than the $70 per megawatt hour.
Speaker Change: And if so how meaningful is the upside there. Thank you.
Speaker Change: Thank you.
Speaker Change: The re contracting that we see very minimal.
Speaker Change: You bet.
Speaker Change: The last call the last re contracting that we'd be able to announce with calpine for the lab work, which include facility the <unk> facility.
Tpa.
Speaker Change: 26 <unk>.
Speaker Change: For the third one the PPA.
Speaker Change: It was a bit lower than the $7 per megawatt hour with BPA.
Doron Blachar: The DPA that we signed was over $100. So, we see a big change. We signed a couple of years ago a portfolio PPA with Denbigh Energy, similar ranges like we had, you know, Around $70 today we see prices above $100. So today we see that the re-contracting, all of them will be at higher prices than what we have today. We also see, which we haven't seen in a while, and mainly with the hyperscaler, a willingness to look or include some indexation to pricing that we didn't have in the past. We still don't have it in the contract that we signed, but we are seeing a willingness to discuss it into the PPA.
Speaker Change: We signed over 100.
Speaker Change: So we see a big change.
Speaker Change: Syed.
Speaker Change: A few of the goal for the PPA with NV energy.
Speaker Change: Similar ranges like we've had in all of them.
Speaker Change: In the around $70 today, we see prices above 100.
Speaker Change: So today, we see that the rig contract in.
Speaker Change: All of them will be at higher prices than what we have today.
Speaker Change: We also see which we haven't seen in a while and mainly with the hyperscale.
Speaker Change: Willingness to.
Speaker Change: Local loop.
Speaker Change: Station to pricing, but we felt that we didn't have in the past.
Speaker Change: We still not constantly.
Speaker Change: After the two sides of that.
Speaker Change: We are seeing the willingness to discuss it.
Speaker Change: Into the PPA.
Speaker Change: The big.
Doron Blachar: will have a big impact going forward. Thank you.
Speaker Change: We will have a big impact going forward.
Speaker Change: Thank you.
Speaker Change: Okay.
Derek Podhaizer: The next question comes from Derek Podhaizer with Piper Sandler. Your line is open. Hey, good morning. Maybe shifting over to energy storage, maybe the margins obviously fell a little bit here quarter over quarter. Just can you talk about the different moving pieces as far as how margins stepped down below the 10% range? And actually, we think about it looking into 2025, you know, puts and takes between bringing on new projects and obviously a lot of the tariff talk out of coming out of China. I know a lot of your supply chain comes out of China for these energy storage units.
Speaker Change: The next question comes from Derek Pate, Sir with Piper Sandler Your line is open.
Derek Pate: Hey, good morning, maybe shifting over to energy storage.
Speaker Change: Maybe the margins, obviously fell a little bit here quarter over quarter. Just can you talk about the different moving pieces as far as how.
Speaker Change: How margins stepped down to low 10% range and how should we think about it looking into 2025.
Speaker Change: Puts and takes between bringing on new projects and obviously a lot of the tariff talk out of coming out of China I know a lot of your supply chain comes out of China for some of these energy storage units. There was just some help around the margin outlook and then how tariffs could be impacting this business.
Doron Blachar: Maybe just some help around the margin outlook and then how tariffs could be impacting this. Good morning. As you can see, in general, 2024, we had around a 10 to 11% margin between the quarters. I would say that in general 2024, there were no significant weather events because the fleet and we only benefited from a bottleneck which buries a higher margin during the month of December. That's when it fully operates. When we look at 2025, we are experiencing more weather events already in January and February. And with the increased exposure and PJM with Montague coming online earlier, we are seeing now for the year roughly a margin of 15 to 20 percent for the full year.
Speaker Change: Okay.
Speaker Change: Good morning.
Speaker Change: CA in January two.
Speaker Change: 'twenty 'twenty four we hit around 10% to 11% margin between the quarters I would say that in general 2024.
Speaker Change: No significant weather events across the fleet.
And we only benefited from.
Speaker Change: Bottleneck, which Bayer is a higher margin during the months of December that's when it fully operated when we look at the 2025, we are experiencing more weather events already in January and February.
Speaker Change: With the increased exposure in PJM with multiyear coming online earlier.
Speaker Change: We're seeing now for the year, roughly a margin of 15% to 20% for the full year.
Doron Blachar: And I will say that we will see a higher margin than expected in Q1 because of the weather events that we experienced. Also in Q3, a bottleneck project has a better margin. In general, during Q3, the contract gives us a higher rate versus the remaining of the year. This is a new tolling agreement that we have in place already in December 2024. So we think about the year, we expect Q1 and Q3 to lead the margin and for the full year, 15 to 20 percent margin. which is close to the end of the day. Right now, that makes sense.
Speaker Change: I will say that we.
Speaker Change: We will see a higher mountain than expected in Q1 because of the weather event that we experience.
Speaker Change: Also in Q3 a.
Speaker Change: Bottleneck project has a better margin in general during Q3, the contract gives us a higher rate versus the remaining of the year before the new tolling agreement that we have in place already in December 2024. So we think about the year, we expect Q1 and Q3 to lead them.
Speaker Change: Margin.
Speaker Change: And for the full year of 15% to 20% margin.
Speaker Change: Okay.
Speaker Change: Dave.
Speaker Change: Right now that makes sense and then maybe just some comments around the tariffs out of China, just your supply chain with the batteries and the sales and everything else that goes into it.
Doron Blachar: And then maybe just some comments around the tariffs out of China, just your supply chain with the batteries and the cells and everything else that goes into it. And if you think about our CAPEX this year, for example, on storage, total CAPEX on storage is expected to be 200 million. I will say at least half of it is things that we bring from China. So it will add some cost to our basically all investment, and it's taken into consideration. But please remember that the battery prices are down from a high of $250 per battery three years ago to $130, $120.
Speaker Change: If you think about our Capex. This year for example, install a total capex of 30 is expected to be 200 million I would say at least half of it is things that we bring from China.
Speaker Change: So it will add some cost to our.
Speaker Change: Basically.
Speaker Change: Investment and taking into consideration, but please remember that the battery prices are down from a high of $250 per battery.
Speaker Change: Three years ago to 131, 'twenty you could even buy batteries now with one team 100, so overall from what at the time, we decided to buy the products it till now.
Doron Blachar: You can even buy batteries now at $110, $100. So overall, from the time we decided to buy the projects until now, the value of the batteries went down significantly. So 10% should not impact almost anything our decision making, and it will not stop us from continuing the growth. The key for us is to get interconnection on time. And the key for us is to continue to sign good tolling agreements to allow us to develop more ports. Got it. That's helpful.
Speaker Change: The value of the batteries went down significantly so a 10% should not impacted almost anything our decision making.
Speaker Change: It will not stop us from continuing the growth.
The key for us is to get interconnection on time.
Speaker Change: And the key for US is to continue sign good tolling agreements to allow us to develop more projects.
Speaker Change: Got it that's helpful.
Doron Blachar: And then you recently signed an MOU with SLB in the oil and gas world to develop traditional and next generation geothermal assets, EGS. Could you give us an update on how that's progressing? Anything noteworthy you want to share how you're viewing this MOU and how it's evolving? Thank you. So it's a very important demo use from our perspective, and I think also from SLB, and it basically has two arms. On one hand, SLB, you know, one of the largest drillers, has many customers that are drilling around the world, and have access to potential geothermal sites.
Speaker Change: And then you recently signed an Mou with <unk> in the oil and gas world.
Speaker Change: To develop traditional and next generation geothermal assets EG asset could you give us an update on how that's progressing anything noteworthy you want to share how youre viewing this mou and how it's evolving.
Speaker Change: Thank you so it's a very a both of the Mou from our perspective.
Speaker Change: The format of SMB.
Speaker Change: <unk>.
Speaker Change: It basically has to on one hand.
Speaker Change: SMB.
Speaker Change: One of the largest driller.
Speaker Change: Many customers that are drilling around the world.
Speaker Change: And to have access to.
Speaker Change: Two potential geothermal sites.
Doron Blachar: They're also owning GeoTermex, which is one of the consulting firms that deals with geothermal. And we do hope that through their customer base and knowledge from geothermics, we will be able to get it to a developed this project for hyperscalers, or any of the SOBs. The other part is the EGS, as you know, EGS is significantly focused and looking on drilling and drilling costs, drilling technologies, and SLV is at the forefront of this technology. And we are working with them to design an executive framework where we will together develop an EGS. deal with the technology challenges that EGS has today and between our experience in the Resource Management and SLB experience in the drilling.
So owning geothermal, which isn't consulting 12 deals with geothermal.
Speaker Change: And we do hope that through there.
Speaker Change: Customer base and knowledge from theater mix, we would be able to build it.
Speaker Change: Hey.
Develop geothermal projects.
Speaker Change: For the railroad.
Speaker Change: Hyperscale demand.
Speaker Change: SMB customer.
Speaker Change: The other part is the Egfr <unk>.
Speaker Change: Yes.
Speaker Change: We currently focus then looking.
Speaker Change: On drilling.
Speaker Change: Drilling costs related.
Speaker Change: Apologies.
This will be in the forefront.
Speaker Change: Technology.
Speaker Change: And we are working with them to design the framework, where we will.
Speaker Change: Together develop an ags.
Speaker Change: Pollution.
Speaker Change: The deal with the technology challenges with PGS has today.
Speaker Change: And between our experience.
Speaker Change: In the resource management and SMB experience in the drilling we believe that we have a good chance to be better than others.
Unknown Executive: We believe that we have a good chance to build better than others on these technology challenges. And then once we do find the right economical EGS solution, we start developing EGS projects. process that we are starting with SLB today, these days, you know, finalizing the framework and going forward. So it's, it's not a short, it won't have a short-term impact, obviously, but it hopefully will have a mid-term impact in the longer term, basically. Great. Appreciate all the color. I'll turn it back.
Speaker Change: <unk> challenges.
Speaker Change: And then once we do fine.
Speaker Change: Right the economical.
Speaker Change: Solution.
Speaker Change: Developing DG project.
Speaker Change: It's a process that we are starting with SMB.
Speaker Change: Today.
Speaker Change: Dave.
Speaker Change: Finalizing the framework going forward.
Speaker Change: It's not the short it won't have a short term impact obviously.
Speaker Change: And hopefully we'll have a lead.
Speaker Change: The impact that the law.
Speaker Change: With the significant feedback.
Speaker Change: Great I appreciate all the color I'll turn it back.
Jeff Osborne: The next question comes from Jeff Osborne with TD Cowan. Your line is open. Yeah, thank you. Good morning. Just two quick ones. On the contract renewals that you mentioned with Calpine for 15 megawatts, I think you had 88 total megawatts that were being renewed from 26 to 28. Is there any update on the cadence of that expectation? I assume those would also be north of 100 megawatts an hour? The other recontracting that we have until 28 actually will go through the NV Energy portfolio. These are contracts that have Assaf signed with Envy Energy and we signed them three years ago.
Speaker Change: The next question comes from Jeff Osborne with TD Cowen Your line is open.
Jeff Osborne: Yeah. Thank you good morning, just two quick ones.
Jeff Osborne: The contract renewals that you mentioned with with Calpine for 15 megawatts. I think you had 88 total megawatts that were being renewed from 2006 to 28.
Jeff Osborne: Is there any update on the cadence of that expectation I assume those would also be north of 100 megawatts.
Jeff Osborne: Sure.
Jeff Osborne: Whoa.
Jeff Osborne: The other re contracting that we havent been 28 actually will go through the NV energy portfolio of diesel contracts.
Jeff Osborne: <unk>.
Okay.
Speaker Change: Outside with NV energy and do we sign them at three years ago.
Doron Blachar: And the portfolio is a smaller, lower number, around $70. However, still these are higher. Brighter than what we have today in this conference. Got it.
Jeff Osborne: The portfolio.
Jeff Osborne: Model.
Jeff Osborne: Number around.
Jeff Osborne: $70 oil.
Jeff Osborne: It will still be the higher.
Jeff Osborne: Prices in Watson.
Jeff Osborne: We have today with Parker.
Speaker Change: Got it so no new renewals between now and 28 and in order to acquire new exploration to reach the $100 price point for anything above and beyond that is a correct I just want to make sure I got the timing right.
Doron Blachar: So no new renewals between now and 28, and then it would require new exploration to reach the $100 price point for anything above and beyond that. Is that correct? Just want to make sure I get the timing right. These were relating to Nevada. We have a Hebrew contract in in California that we signed with SCAPA. That contract ends in February 26. And we are waiting to the final signature from SCAPA that should happen in the coming weeks. And that contract on average is about 100. Unknown Speaker 09. Perfect.
These were related to Athens.
Speaker Change: Adding to that.
Speaker Change: Further we have the heber.
Speaker Change: In contrast in the.
Speaker Change: In California that we signed with Scott Bob.
Speaker Change: That contract ended February 26.
Speaker Change: We are waiting the final signature for staff of the <unk> happening.
Speaker Change: How big.
Speaker Change: Weeks.
Speaker Change: And that contract on average is above 100 bottles.
Speaker Change: And if we can see higher than that.
Speaker Change: Got it.
Speaker Change: Yeah.
Speaker Change: Perfect.
Doron Blachar: And my last question was the, I forget what year it was, maybe 22 or 23, you made an acquisition that had a power line associated with it, and I believe you're trying to sell that power line or have been for a while. Is there any update on that? and what the potential proceeds could be. We have the offerable power line connected to a control substation, which is waiting for an upgrade. We are not a transmission company. And as you said, we are looking to sell it, we are in the process. And obviously, since we're in the middle of the process, I cannot share some commercial details, but this is definitely a process that we're doing, and we plan to finalize it.
Speaker Change: Last question was the I forget what year was maybe 22 or 23, you made an acquisition that had a power line associated with it and I believe you were trying to sell that power line or have been for a while is there any update on that.
Speaker Change: Potential proceeds could be.
Speaker Change: We have the power of the optimal power line.
Speaker Change: To.
Speaker Change: The control substation, which is waiting for an upgrade.
Speaker Change: We are not.
Speaker Change: On submission company.
Speaker Change: And as you said, we are looking to sell it with the process and obviously since we're in the middle of the process I cannot share.
Speaker Change: Commercial detail.
Speaker Change: We are part of the world.
Speaker Change: Doing well.
Speaker Change: And we plan to finalize it.
Unknown Executive: Perfect.
Speaker Change: Perfect and just a clarification I think you mentioned in the prepared remarks, but I.
Doron Blachar: And just a clarification, I think you mentioned the prepared remarks, but I failed to hear it correctly. Did you name the particular NV Energy project that was being curtailed that's leading to the electricity shortfall in 2025? I don't think we named it, but it's mainly in the Guinness area. Got it. Thank you. The next question comes from Ryan Levine with Citigroup. Your line is open. Thanks for taking my questions. What's, I guess, two questions. What's changed from the company's prior stance to go through a regulated utility to this direct PPA with the hyperscaler? And then related, another IPP or another power company indicated $70 to $90 per megawatt hour range for hyperscaler deals that didn't include capacity or ancillary service.
Speaker Change: To hear it correctly.
Speaker Change: Did you named in particular in the energy project that was being curtailed that's leading to the electricity shortfall in 'twenty five.
Speaker Change: Okay.
Speaker Change: Don't think with them is but it's mainly in Nevada.
Speaker Change: And again and again is the area of unison.
Speaker Change: Got it thank you.
Speaker Change: Thank you.
Speaker Change: The next question comes from Ryan Levine with Citigroup. Your line is open.
Ryan Levine: Thanks for taking my questions.
Ryan Levine: What's I guess two questions what's changed from the Companys prior stance to go through a regulated utility to this direct PPA with <unk>.
Ryan Levine: Hyper scaler and then related.
Ryan Levine: And other IPP or another power company indicated 770 to $98 per megawatt hour range for Hyperscale deals.
Ryan Levine: <unk> capacity your ancillary service.
Doron Blachar: Can you provide some color or is there anything that you're able to share as to what's included with the north of $100 per megawatt hour? First of all, we are negotiating with Hyperschedule, as I said, directly and also through the utility company, so we're looking at both alternatives. We're trying to maximize the growth and profitability of the company between these two aspects. And when we signed the PPA, we basically said with the PPA all the attributes of the renewable energy, including the REX and everything. So we have one customer, one price, that deals with everything.
Ryan Levine: Can you provide some color or is there anything that you're able to share as to what's included with north of $100 per megawatt hour number.
Ryan Levine: First of all we.
Ryan Levine: On negotiating the Hyperscale deal as I said.
Ryan Levine: Correct.
Ryan Levine: Direct lead.
Ryan Levine: And also through.
Ryan Levine: The utility company and so we're looking at.
Ryan Levine: And both alternatives.
Ryan Levine: Okay.
Ryan Levine: We're trying to maximize the relative profitability of the company and between these two aspects.
Ryan Levine: When we signed the PPA, we basically filled with the PPA all the attributes of the renewable energy is pretty direct.
Ryan Levine: So we had one customer one price.
Doron Blachar: Maybe that's the difference. I don't know who mentioned $70 to $90, but maybe that's part of the difference. But that's how we see the other technologies. Our technology is emission-free. Other technologies have emissions that also might have an impact on the price people are willing to pay. New power plants get We tend to get higher pricing, then we're contracting many times. Well, there are various issues that can impact the pricing of the BPA, but. so that we see pricing that we are negotiating. Okay, appreciate that. And just in terms of duration, I think it was previously mentioned or, or clarified, but do those duration conversations include all attributes of the of the power that you're selling?
Ryan Levine: Everything maybe that's the difficult I don't know, who mentioned 70 to $90, but maybe that part of the difference.
Ryan Levine: But that's how we see.
Ryan Levine: The other technologies, our technologies as emission free.
Ryan Levine: The group has a mission.
Ryan Levine: That also might have an impact on the price that people are willing to pay.
New power plants get.
Ryan Levine: Yeah.
Ryan Levine: We see tend to get higher pricing have been re contracted and many times.
Ryan Levine: The various issues that could impact the pricing of the PPA.
Ryan Levine: But we started with the pricing that we are negotiating.
Ryan Levine: 100.
Ryan Levine: Okay.
Ryan Levine: Appreciate that.
Ryan Levine: And then just in terms of the duration I think it was previously mentioned or.
Ryan Levine: Clarify but.
Ryan Levine: Those duration conversations include all attributes.
Speaker Change: The power that Youre selling I mean does this include capacity some of the racks or any type of.
Doron Blachar: I mean, does this include capacity, some of the racks or any type of environmental attributes? And are they all likely to be similar in duration or any color you could share on that? Yes, all the PPAs, we have said all the attributes at the same time, period time of the PPA, so the PPA 10 years, it could be for 10 years, 15 or 20. And the duration of the PTA is based on the negotiations we have with a specific customer usually ready between 10 to 20 Great. Thanks for taking my question.
Ryan Levine: Environmental attributes.
Ryan Levine: And are they all are likely to be similar in duration or any color you can share on that front.
Yes, with all the PPA that we have said all the attributes to the same time period titled the PPA because the PPA for 10 years.
Ryan Levine: 20.
Ryan Levine: And the duration of the PPA based on the negotiations with the specific customers in the range of between 10 to 20 years.
Speaker Change: Great. Thanks for taking my questions.
Ryan Levine: Thank you.
Doron Blachar: This concludes the question and answer session. I'll turn it to CEO Doron Blachar for closing remarks. Thank you all for joining us today. 2024 was another very good year for Ormat. We see the significant increased demand in the U.S. and globally, and we are fully committed to continue to focus on this growth and make sure that this is a profitable growth going forward. Thank you all.
Speaker Change: This concludes the question and answer session I will turn to CEO, Joe Ron Basso for closing remarks.
Speaker Change: Thank you all for joining us today.
Speaker Change: 2024 was another very good vehicle model.
Speaker Change: We see the significant increase demand in the U S and globally and we are fully committed to continue to focus on growth and make sure that this is a profitable growth going forward. Thank you.
Operator: This concludes today's conference call. Thank you for joining. You may now disconnect.
Speaker Change: This concludes today's conference call. Thank you for joining you may now disconnect.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Thanks.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].