Q2 2025 Ormat Technologies Inc Earnings Call
Good morning and welcome to the ormat Technologies. Second quarter 2025 earnings conference call. All participants will be in listen-only mode.
After today's presentation, there will be an opportunity to ask questions.
If you would like to ask a question during that time, simply press star, then the number 1 on your telephone keypad.
Please note that this event is being recorded. I would now like to turn the conference over to Josh Carroll with Alpha IR please go ahead.
And ESG planning reporting.
For beginning, we would like to remind you that the information provided during this call may contain or looking statements related to current expectations estimates, forecasts and projections of future events that are forward-looking as defined in the private Securities. Litigation Reform, Act of 1995.
These 4-l 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 features May differ materially from those projected as a result of certain risks and uncertainties for discussion of such risk and uncertainties, please see risk factors as described in ormat Technologies and reports on form 10K and call reports on form 10q that are filed with the FCC. In addition. During the call, the company will present non-gaap Financial measures such as adjusted Ava.
Reconciliations for the most directly comparable, gaap measures and management reasons for presenting such information as set forth at the press release, that was issued last night as well as in the slides post 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.
Before I turn the call over to management, I'd 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's found on the investor relations tab.
With all that said, I would now like to turn the call over to ormat CEO to Ron bushahr Turon.
Thank you, Josh.
Good morning, everyone. And thank you for joining us today.
Reported record second quarter revenue and adjusted ibida results. With the 9.9%, increase in Revenue at 26.1%, rise in net, income, and a 6.7% Improvement in adjusted ibida.
This outstanding performance was driven by the full recovery of our product segment, revenue and margins improved performance of our energy storage segments, which continues to benefit from new projects that which commercial operation, 24 and higher Merchant prices in the PGM Market.
During the quarter, we completed the acquisition of the Blue Mountain. Geothermal power plants and we live for construction, 50 megawatt of new projects, including 28, megawatts of geothermal and 22 megawatts of solar projects primarily at our Hebrew complex.
We also continue to advance our geothermal development pipeline benefiting from accelerated permit approvals due to recent Federal permitting reforms.
In July and August, we closed a significant tax Equity transaction for the Hebrew 1 and 2 geothermal power plants, and secure project Finance debt for our buoyant power plants.
Combined with the hybrid tax Equity transaction. We signed for our storage assets and the Project's Finance debt raised for the Dominica project. During the quarter, we secured
$300 million of funding to support future Development Across the portfolio.
Overall, we continue to see strong growth potential for geothermal in 2025 and Beyond.
This is supported by improved permitting timeline due to recent Federal permitting reforms.
And increasing number of BLM land auctions, our expanded exploration efforts and robust, secular demand for Basil Renewables, which has translated into elevated, TPA pricing, and stronger market economics.
Before I turn the call over to us.
I would like to highlight the recently signed 1 big, beautiful, bill that for us is indeed very beautiful.
The legislation has extended the PPC and ITC runway for both our geothermal, and energy storage segments. Positioning us, uniquely within the renewable energy sector.
ASI will provide further details on the new policy, and our efforts to maximize its benefits in his remarks.
With that said, I will now turn the call over to AI to discuss our financial results. I see
Thank you, Don.
Let me start my review for financial highlights on slide 6.
Total revenue for the second quarter was 234 million.
In 9.99 increase compared to the last year's second quarter.
This top line extension was driven by the recovery of our product segment and.
Partially offset by flight reduction in the electricity segment.
Gross profit for the second quarter was 56.9 Million.
Down 7.3% from 61.4 million in the second quarter of 2024.
Resulting in a Consolidated, gross margin.
Of 24.3%.
Versus 28.8% last year.
The decline was largely due to a temporary electric segment. Gross margin compression.
But I will discuss shortly.
Net income attributable to the company's stockholders was 28 million or 46 cents per diluted share.
Up.
Compared to 22.2 million or 37 cents per diluted share in the second quarter of Prior year.
Adjusted net income attributed to the company's stockholders.
For 29.1 million or 48 cents per diluted share.
Reflecting increase of 19.8% and 20% respectively.
This performance highlights, the strength and resilience of our portfolio in business models.
As we continue to grow our earning, despite the temporary reduction in our recity segment of stability adjusted DBA for the second quarter was 134.6 Million.
6.7% increase compared to last year.
The strong year-over-year growth was driven by the higher revenue and better margin.
In the product segment.
Contribution from new assets and higher Merchant pricing in the energy storage segment.
A legal settlement with the battery supplier and better performance of the Dixie Valley and Bowie power test.
the increase.
Was partially offset by an approximate 12 million dollars reduction in Media.
Due to energy cost elements in the US.
And previously reported well-filled work at the Puna, power plant.
Slide 7, breaks down the revenue performance at the segment level.
Electricity segment, revenues for the second quarter, decreased by 3.8%.
To 159.49 million primarily due to ongoing maintenance work at the Puna, power plant, and continue energy containment in the US.
which reduced revenues versus the same period last year by approximately $13 million.
We finished the planned wellfield maintenance and resume normal operation in July.
And we continue to monitor our performance.
We anticipate the US containment resulting from third-party. Tine maintenance will significantly lessen the second half of the year.
Product segment revenues increase by 57.6%.
To 59.6 million during the second quarter.
Driven by our strong backlog, and the timing of progress made in manufacturing and construction.
Energy storage segment Revenue increased by 62.7% to 14.5 million dollars in the second quarter.
mainly due to the commencement of commercial operation of our new energy storage facilities in 2024,
And strong Merchant prices in the PJ Market.
Also look like 7, the gross margin for the electricity. Segment was 24.2% in the second quarter.
Down from 73.5% last year.
Excluding this temporary disclosure, the margin would have been approximately 30%.
In the product segment, gross margin was 27.7%.
Up from 13.7% last year.
Driven by improved profitability on our contract.
We now anticipate that gross margin for the year in our product segment will increase to a range of 21.
To 23%.
The energy storage segment, reported gross margin of 11.9%.
Up.
and 5.7% in the second quarter of 2024,
this Improvement was given by higher Merchant prices in the PJ markets.
Hot weather along the east coast contributed to elevated Merchant pricing.
With strong performance, throughout the first half of the year and robust PJ prices in the month of July.
We now anticipate full year, go profit for the store segment to reach up to 20%.
Flight 8 and 9 show the results of the first half 2025 highlighted by 6.1%.
And a 6.5% increase in total revenue and adjusted EBITDA.
Respectively.
With significant increase in both energy storage and products.
Moving to slide 10. I would like to discuss further the recent spending budget bill that was passed in the U.S. on July 4th.
as the law mentioned, the bill extend, the PTC and ITC runway for geothermal and energy storage segments,
we now have the ability to receive full tax credit for geothermal and energy storage projects, starting construction by December, 31st 2032
after 2033 the credit based down to 75%.
So the project starting construction by 2034.
50% by 2035 and then 0% thereafter.
As for solar and PV project project starting within 12 months of the build enactments can receive full credit. If placed in service within 4 years, otherwise they must be in service by the semester 31st 2027.
Regarding the foreign entity of concern.
Or feoc provision of the bill. The broader scope includes specified foreign entity and foreign influence entities.
the law aims to limit content, from seo's using energy related projects, starting construction after the 7331 2025,
While we are currently assessing the impact of the SEO series on our growth. We expect minimal to no impact on our geothermal business.
This will manufacture all of our product segments.
With minimal SEO, C content.
However, at this time, the entire engine storage industry is still heavily dependent on Battery Source from China.
And we are actively evaluating all project development options while continue to Safe, Harbor additional projects.
ultimately,
we will pursue the most economically viable option to advance our current storage pipeline.
And maintain flexibility in our procurement to stay on track with our extension goals.
Moving to slide 11, we recorded 16.3 million dollars in income related to tax benefits in the second quarter.
Compared to 15.8 million dollars last year.
In the second quarter.
And first half of 2025, we recorded ITC benefits of 10.3 million dollars and 24.2 million respectively.
In the income tax.
This benefits related to 2 storage facilities that are expected to become operational in 2025.
Recently we entered into 2 tax Equity, transactions that secured 139 million of cash tax benefit.
In July, we received 77 million from our Hebrew tax Equity transaction.
Of the remaining 62 million in 96 process related to our lower re enable storage facilities.
We received 5 million in the second quarter with the rest expected in the second half of the year.
We expect Works will be positively impacted by the ITC benefits in 2025, with an annual tax benefit rate between 5 and 15% excluding changes in law or 1 Time Event.
July 12th data or use of cash flow over the last 12 months.
Illustrating how much ability to generate strong cash flows for reinvestment.
And strategic growth.
While everything that obligation and returning Capital to shareholders.
Cash on cash equivalent.
106 million.
Similar to the end of 2024.
Our total debt as of June 30, 2025, was approximately $2.7 billion, net of deferred financing costs.
With the cost of debt.
At 4.95%.
The majority of our debt liabilities are fixed. Interest rates, providing stability and protection.
For Market fluctuations.
Moving to slide 13. Our net debt is of June 2020, 25 was approximately 2.5 billion dollars.
Equivalent to 4.4 times, net battery.
During the second quarter. And early third quarter, we secured $300 million in funding.
this include 1 139 million dollars of tax Equity Partnerships and
1 161 million from Project financing loans at attractive work.
The fund will support a new buoyant power, plant planting with a look.
And our new project in Dominica.
As shown on the slide, our total available liquidity is 551 million.
Our total expected capital expenditure for the second half of 2025 is 295 million.
The detail capex presented in slide 33 of the appendix.
We plan to invest approximately dollars in the electricity segment for construction.
Expiration.
Drilling and maintenance in the last two quarters of 2025.
In addition, we plan to invest 85 million in the construction of our storage.
on August 6, 2025 our board of directors declared approved and authorized
Payment of a quarterly dividend of 12 cents per share variable of September 3rd, 2025.
To shareholders of records as August 2022.
The company expects to pay quarterly dividends of 12 cents per share.
In each of, the next 2 quarters.
That concludes my financial overview. I would like now to turn the call over to Don to discuss some of our recent developments.
Thank you. A returning to slide 15 for a. Look at our electricity segment. Operating portfolio.
portfolio growth during the quarter was supported, by the addition of the Blue Mountain geothermal power,
Moving to slide 16.
The Blue Mountain acquisition as immediately enhanced our generating capacity and offer significant Revenue. Growth potential to plant upgrades which are already underway.
and the possible addition of a solar facility,
we are very excited about the opportunities that this Edition presents, and we look forward to continuing our strong partnership with NV Energy to deliver reliable, clean energy to the people of Nevada.
During the quarter, we also expanded our management team to support the growth of our electricity segment and our EGS initiative.
This expansion included, the hiring of Aeron Willis as Executive Vice President, electricity segment. And Daniel morgz a senior vice president, bisoft dwelling and EGS.
Aeron will oversee the operations of the electricity segment ensuring alignment with the company's strategic goals and financial troubles.
Aeron will also be responsible for optimizing test performance and expanding profitability. Ensuring compliance with safety and environmental regulations, and driving continuous Improvement initiatives to Foster future profitable growth.
Daniel will lead our resource willing and EGS team focusing on implementing sophisticated processes and Innovative Technologies to further enhance our operations.
His work will include creating efficiencies shortening development time developing or much ongoing Drilling and exploration Global roadmap.
And Expediting welfare and EGF development.
We are thrilled to welcome, both Aaron, and Daniel to the team with the valuable background and experience will help Drive the next phase of growth for our leading geothermal operations.
Turning now to slide 17 our product segment backlog stands at 263 million representing a 59% increase compared to the second quarter of 2024.
Is highlighted in a few presentation. The contribution of the product segment. This quarter was significant with higher revenues and notable improvements in margin.
Moving to slide 18, our energy storage segment, demonstrated robust the overall growth with total revenues increasing by 62.7%.
As previously mentioned, we anticipate that this strong performance in our energy storage business will continue throughout the remainder of 2025
Driven by the benefits of recently, commissioned storage facilities.
on slide 20, we are on track to achieve our portfolio capacity, targets of between, 2.6 gigawatt to 2.8 gigawatt by the end of 2028,
This confidence is driven by strong momentum in geothermal development and our intensified exploration efforts.
In powerless, we are making progress in the storage segments. Having successfully secured both batteries and safe, harbor for additional projects further, reinforcing our path towards meeting our capacity growth targets.
While Safe Harbor is not required for geothermal projects. The extended construction start deadlines. Now, set for 2033 is allowed us to make significant progress on the storage fund as shown on slide 21.
In 2024, four projects were successfully Safe Harbor, followed by two more in 2025, with additional projects expected to be Safe Harbor later this year.
These actions ensure ITC eligibility with no FOC limitation for our entire storage portfolio to 2028 and in some cases, even Beyond under current regulations.
This Milestone strengthens our confidence in meeting our growth targets.
Importantly, despite the recent changes in tariffs, we do not anticipate a material impact on our financial performance due to the importance.
Turning to slides 22 and 23, which display our geothermal and hybrid solar PV projects currently underway.
We anticipate adding 148 megawatts to our generating capacity from these projects, by the end of 2026.
In addition we have released for construction. 25 megawatts geothermal and 22 megawatt solar PV new capacity to our Hebrew complex in California and a 3.5 megawatt addition to the Blue Mountain, Power Plant in Nevada,
Moving to Fly 24 and 25, we currently have 6 projects under development in our energy storage statement, which are expected to add 385 megawatts or 1.3 gigawatt-hours to our portfolio. Please turn to slide 26 for a discussion of our 2025 guidance.
We maintain our guidance and expect Revenue to increase by 9% year-over-year at the midpoint ranging between 900, and 35 million dollars, and 9775 million dollars.
Electricity segment, revenues are projected to be between 710 and 725 million.
Product segments revenues between 172 and 187 million and energy storage revenues between 53 and 63 million.
Adjusted ibida is expected to increase by approximately 5% in the midpoint ranging between 563 and 593 million.
With annual adjusted ibida, attributable, to my note, interest at approximately 21 billion dollars.
I will conclude our prepared remarks on Slide 27.
This is an exciting and pivotal time for all markets fuelled by supportive policies. In both geothermal and energy storage and the growing demand for carbon-free Basil power, particularly to support AI data centers and the broader electrification trends that are significantly increasing electricity consumption
These developments along with our financial results, not only validate our strategies, but also strengthens our confidence in our team's ability to achieve both our near-term. Operating capacity, milestones and long-term Financial objectives.
And we look ahead to the second half of the year and Beyond, we expect to finalize contracts to support Data Center and hyperscalers, which improve the economics and to continue the Development and Construction of future projects as plans.
And exploration, the best way to develop and integrate EGS technology into operations and future growth.
As we have previously communicated, we are actively pursuing strategic partnerships to develop new Enhanced Geothermal Systems (EGS) projects and provide advanced solutions to potential EGS customers in our product segment.
We believe the new management structure will allow for a greater focus on EGS and Greenfield development.
Our commitment to delivering reliable and sustainable, energy solutions, remains strong. And we are leveraging our unique capabilities to drive meaningful growth and create long-term value for our shareholders.
This concludes our prepared remarks. Now, I would like to open the call for questions.
Operator, please.
At this time, if you would like to ask a question, press star, then the number 1 on your telephone keypad to withdraw your question, simply press star 1 again.
We will pause for just a moment to compile that Q&A roster.
Your first question comes from the line of Noah K with Oppenheimer. Please go ahead.
Uh, thank you. Um, a lot of good things going on. Uh, I think 1 place to start would be around the geothermal development environment. You called out a number of, uh, expedited, uh, permitting permit permitting, advancements for, uh, several projects. I think, you know, that was publicized by, uh, BLM
Perhaps a mid mid-quarter permit correctly. Can you talk about the opportunity for additional uh permitting FasTrak?
What you're anticipating over the next couple of years, and what this might actually mean for speeding up the development timetable.
Yes, I know it's the 1. Thank you.
Um, the the changes in the administration and the Tailwind that support, that we are getting is, is very impressive and pushes us forward with today multiple projects.
That have advanced, the exploration, it will get into a position where we can start food, size drilling and the plant to release a new project.
In the next couple of years. I mean, know Moschino over 12 years and this is a situation that we haven't had in the past. We actually drilling getting a lot of responses, from the BLM much faster than in the past and we see a quite a few of Greenfield.
Projects in the U.S. that we will be able to release for construction in the next couple of years. You can also take as an example the expansion of Hebron that we just released.
We started permitting of this project, I know 45 6 years ago and only now we were able, you know, with the push that we see today to get the permitting and to move it forward.
Very good. Thank you. Uh, I just want to make sure I've got this right on the storage side. I think you mentioned,
Safe harboring, all of your projects expected to come online through 2028.
Uh but you also mentioned uh I think active evaluation around, FOC implications uh, for sourcing. So can you just sort of help us
Clarify those 2 points. Have you effectively Safe? Harbor. The battery supply already. Uh and and uh eliminated. Any FOC concerns for those projects coming on through 2028 or is that an ongoing process? Thank you.
And so I was splitted uh basically to 3 Parts, all the projects that are in construction that will come online. Uh, obviously say how about the batteries are in the US in in
Additional projects in 2025 and all of them should come online by the end of 2028 or 2029 based on the current regulation. So, I would say with Safe Harbor, in 2024 we have 700 megawatt hours. In 2025, already 600 megawatt hours and we are in the process of safe harboring another 1.6 gigawatt hours of projects in 2025.
No, thank you very much. I'll turn it over.
Thank you know.
Your next question comes from the line of Justin Claire with Roth Capital Partners. Please go ahead.
Hi, thanks for taking the questions. Um, I I guess first, I just wanted to follow up on uh the progress you're making on enhanced. Geothermal was wondering if you could just provide a little bit more detail on the progress that you've made to date and and speak to the potential opportunity. Would you say, you know, it's more likely to first. Uh, enable you to increase production at uh, existing Wells, or existing plants, or are you looking at Drilling in, uh, new locations, uh, would be great to get an update there.
It's Justin. So, on GS, I would first start, you know, we've just appointed a Senior Vice President, Daniel Moore, to lead our Resource Drilling and EGS. He comes from Evo and has a lot of experience and knowledge in the EGS and this area.
And we're working on multiple approaches on EGS. We since there is no 1. 100% proven technology. Today, we will be focusing on a few Technologies in parallel.
I believe that the first stage as you said we will try to utilize EGS in some of our existing facilities that have interconnection that have permitting that have already a power plant operating and has the ability to generate more, but in the long term, 1 CGS is a successful. I see this has just expanded significantly the potential growth that we see in our map.
Both on the development part and also on the product side because once CGS will be a common technology and a proven technology.
Uh, the demand for geothermal uh, products and EPC projects, uh should increase significantly.
So we do hope and I do hope that the technology will be successful. And EGS will be proven a viable solution in the next couple of years and if it does happen and it opens the totally new area
for them to grow, and it will have a significant impact once a successful
Got it. Okay. And then I guess, curious just following up on that, you know, what kind of demand you might be seeing on the product side from, you know, others that are pursuing, uh, enhanced geothermal techniques or or also, are you evolving your, um, products, uh, in order for them to be, um, you know, potentially more adaptable to, um, an enhanced geothermal? Well, uh, um, yeah, great.
No, at the end at the end of the day you know the main attribute to EGS is the subsurface uh impact you know drilling getting the heat up. But once you get the heat up its it will operate like a similarly to other geothermal projects.
and,
Is the largest developer and the largest seller of binary technology.
We need to remember that we are not Chinese so I believe it will give us a significant benefit versus any other Chinese company that are competing in this area to build a geothermal project.
Okay, got it. Thank you. I'll pass it on. Thank you.
Your next question comes from the line of Julianne Doolin Smith with Jeffries. Please go ahead.
There is to await and see what happens with treasury in terms of guidance. Is there any concern that, uh, guidance ruling might limit your ability to Safe Harbor? Any fiac exposed batteries?
In a good morning and thank you for joining the call. This is AI for the best of what we know today, the, uh, August 18 Ann on FOC should be focused on winning solo.
And therefore, we don't think that should be a problem for us to save Harbor more projects between now and year-end because we need to have the project start by December 31st.
This is just part of the evaluation of what project We Believe will have interconnection by 2028 and 2029 and that's where we are doing all Safe Harbor.
The good news is that, uh, at least we know that by the end of 2033, we do have confirmation that the ITC benefits will continue. I also think that even if there will be no Chinese equipment allowed to be used after that, there will be U.S. manufacturers or non-focal batteries. I think it's going that way. So overall, you can see these are big numbers that we have a safe harboring, and we just part of the work to decide what to safe harbor for.
Got it. Thank you. And as a second question, could we get an update on the 250 megawatts under negotiation regarding data center opportunity? I know you said this in past quarters, but I wanted to see if there was anything uh, incremental to touch on there. And if any of these potential projects uh 250 megawatts is contingent on you moving forward with um pursuing EGS. Thank you.
I have a thank you, so I'll start with the end. All the all the PPA that we are negotiating today. I don't know, the existing technology, they are not connected to a ETFs and this is based on our existing technology and the way that we are approaching, it basically is to see that we cover any potential and Green Field that we will develop as well as any recontracting that we will have.
Um, negotiations on the PPA are ongoing uh, moving forward. Uh, unfortunately, I, I still don't have the ability to tell you that we signed.
But, uh, we are finalizing, uh, the terms with them and I hope that we'll be able to announce, uh, PPA that we signed in the next few months.
Thank you.
Your next question comes from the line of Ben callow with Baird. Please go ahead.
Hi. Good day, guys. Thanks for taking my question. Um, did you just talk a little bit about, you know, the certainty and tax credits, um, and how and, and also, you know, the BLM permitting, um, getting easier, um, how that has affected your, your early development, uh, strategy, that has a sped up or slowed it down, uh, or made changes at all. Uh, on on your development. Um, approach,
Hi Ben. Thank you. Thank you Ben. So um, the
The the the the the the tax Equity or the tax benefits that uh that we see with the new beautiful bill is definitely beautiful for us.
The geothermal file will run until the end of 2033, and then there will be a slow, gradual decline of the benefits, but still...
It works on start of construction, so effectively until 20 Cod is until 2037 and in some cases, until 2043 even will enjoy the the PTC or ITC benefits that entitled us. We have. No, we don't expect of any limitation on the FC on the geothermal part.
Manufacturing, these different countries, the percentage that come from China is minimal and should not impact this of the geothermal front. It's very, very clear.
And and again, with energy storage, it's until 2033 start of construction.
and then,
Just on on the 28 targets. Could you just talk about how any of the these changes? Um, or what you've seen in, uh, in in power prices have, you know, been a, uh, either a positive or negative towards your 2028 targets you laid out, um, because there's been a lot that's happened recently, so if you're not positive or or not negative, if you could walk through that,
No, no. The 28 Target that we set a couple of years ago, I'll I'll totally valid. We still see them, actually the fact that permitting is faster and easier makes the more achievable the extension of the ITC and PTC is helps them in the same way. It didn't change. The the
The playground for 20 20 2028 and the PPA pricing and the extensive demand that we see for a renewable energy, uh, basically supports a totally these targets.
Thank you.
Your next question comes from the line of David Anderson with Barclays. Please go ahead.
Hi. Uh, you were talking before about enhanced geothermal but I kind of a little bit more, Curious, more specific around exploration, you talked about your exploration program and some talk on the BLM. I was wondering if you could talk about how much
Capital, you're putting aside for exploration. What does that look like for? Say 2026 and curious? Are you drilling any Wells yet? Are you still in the kind of geologic or Reservoir analysis phase?
Thanks, David. So on the exploration it's a it's a great place to be in a great questions. We've been doing Co
Between 10 to 12 C, with starting in 23 and 24/25 and doing full size. Well actually, we are today doing full size. Exploration was in 2 sides in the US active with really, we're looking into next year and I expect next year to be drilling in the on top of the core will programs really between 2 to 3 uh full size, exploration Drilling in parallel. And so, all in all the move that we've done
Brings us much closer to to many more green fields that will be able to develop.
Capex wise, you know, we have in the exploration path.
On annual basis have somewhere between 100 and 125 to 150 million dollars of drilling exploration. Wells, obviously can move up and down a bit but, uh,
The way that we see today is that, uh, we will be drilling.
2 or 3 different location in parallel, in the US on exploration.
Great. Thank you. Um, and separate subject uh, on your product segment. I was just wondering about the, the growth and kind of how you project in. Like going forward, we saw some the backlog decreased a bit. This quarter, I was just kind of curious how that should impact or not impact growth going forward, can you just kind of provide some, maybe some longer term views and where, where, where, how much that business can grow?
Yeah so uh backlog uh you know what has many times that tendency to go down and up because we do sign large contracts.
Obviously, once you sign it, it will go up. And then, you know, when once you start recognizing Revenue, it starts to go down.
So we do expect to see some ups and downs in the in the backlog and that's especially relevant when most of the projects that we signed today are EPC contracts, not supply projects.
Meaning a much larger project today, we see New Zealand as a big part of the battle. We will continue to be a significant part of the backlog, even in the coming years, as we know.
About potential projects that are expected to be released next year and the day after that in New Zealand.
The other country that is very important for us on the product side is Indonesia, and they've just issued a few tenders and we see multiple tenders coming over the next couple of years in Indonesia.
that is spread over a period of
Around 2 years and a bit and sometimes a bit more.
So, we do see a very nice.
Future for the product segments. And I would say that once we add that to our exploration efforts and the Green Field that we plan to develop that will add on to the product segment not in direct Revenue, but definitely in workload and the potential
Appreciate the comments. Thank you.
Thank you. Your next question comes from the line of Derek pod Heiser with Piper Sandler. Please go ahead.
Hey uh, good morning. I was wanted to go back to the, uh, The Accelerated per permanent approvals that you've been talking about. Maybe could you just remind us uh, give us a refresher on the approve. Uh, the improvements that have been made, how long did it take before? How long is it taking now and then help us understand how this all translated into being able to release that 25 megawatts at heater
Good morning, Derek. Thank you for joining the call. Historically, the amount of time it took us to get environmental permits in Nevada could have been a year and sometimes even longer. I can tell you that in some cases we've seen that now shortened to as little as 2 months. We got the 2-3 periods during the quarter that were within 2 months.
No matter what, we are now trying to go and file as much as we can in terms of environmental permits in order to expedite additional projects that were not planned to be built over the next few years. I will say, though, that, for example, in California, they still need to have a specific environmental permit. That is not the BLM permit, but another permit.
And therefore over there, it's probably going to take some time until we see improvements, but as you know, many of our green fields are in in Nevada.
But if you think about permitting is not just environmental permits, it's also the knowledge the the project will be approved the the knowledge that they will not be a new indigenous PC waking up. After we have done the exploration work so for us
Is give us also a lot of Runway of where we go and choose the world to drill. We are much more comfortable in our ability to progress to to the permitting. So it's 1 ex accelerating, but second also give us confidence that we will get the all the permits on time.
Got it. That's helpful. Um, maybe switching to a blue Blue Mountain. Can can you, can you remind us how much this uh, is expected to contribute to revenue in ibida? I think you said you'll be getting contribution beginning, uh, next quarter, third quarter, and then once all the plan enhancements and additions are are made, where could this run right? Step up to, as we start thinking about 2026,
Sure right now for the second half of the year, we expect to bring around a $1 million of ibida for the plant. I will say that when we look at the 2027 that number should go up by around 10, 15% as we increasing the capacity of the plan. By 15% we're going from 20 to 23 and a half.
and that project was already released in our construction and the next phase of growth for this project is that by the end of 2029, the, uh, PPA of the, uh,
This plant is over and therefore we expect to achieve a much better pricing on the PPA, the PPA of the plant is in the low 70s right now and as you know, the market is about 100 1. More thing to mention, we do believe that blue mountain is a great place to do some EGS projects. There is already an active well of EGS on site. So we know that the ground there is quite good, and the plant is running under capacity, which means it can grow significantly. So, that's definitely a place. We will look over the next few months to see where we are. Aiming, some of our EGS efforts.
Great. Uh, I'll turn it back. Thank you.
Your next question comes from the line of Jeff Osborne with TD Cohen. Please go ahead.
Thank you. Uh just 2 2 real quick ones, I was wondering. Um I see if you just confirm the uh the remediation work on the transmission line is is that completed or is that still lingering in the third quarter. I know you said that curtailment would be meaningfully down but I just wasn't sure if it's finished.
In July, actually in the second week of July, the remediation of the well-paid work and the permits.
You're talking about pun. Now you're talking about Envy I think you're talking about the containment, right?
The transmission line, it's 100 years old in Nevada.
Okay, so we had slides very small cement in the in July and the NV Energy told us that they completed the work for the year.
That's why we gave the guidance to much less than containment as you know. Uh, we had a, very big impact in this quarter for curtailment and also in q1. So we definitely assume and based on what we were told that this will lessen in the second half
Got it, that's how far. And then I if I heard you right, I think you said there was a legal set amount as it related to a battery supplier was that around performance availability. Can you just flush out with the system completed and and not working appropriately or any? Any incremental detail would be helpful. Yeah this is already a settlement that we have done a year ago where a battery supplier did not provide us a batteries when we demanded them and when we issued the P because the prices of battery at the time went up significantly and our contract, was it, fixed cost? And that's why he reimbursed us. So this is something that we will see in the financial, I believe until at the end of this year and into q1 of next year, every quarter, we should expect to see around 3.1 million dollars of income from that.
Got it. Thank you.
That concludes our question and answer session. I will now turn the call back over to Don for closing remarks.
Thank you. Thank you. I would like to thank you all for joining us today. This was a very good quarter for 1.
We are continuing our exploration and development, and EGS efforts. With the tailwind that we see from the current administration, we anticipate significant growth in the coming years and beyond.
So thank you all and goodbye.
Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.