Ormat Technologies

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18 2 “A Guide to Geothermal Energy and the Environment” Geothermal Energy Association, April 2007 Geothermal Technology Pillars Four key pillars support Ormat’s responsible development of geothermal technology and contribute to the substantively lower environmental footprint this renewable energy source delivers. Reinjection A key sustainability driver for geothermal power generation is the conservation and recycling of the water that conveys the heat from deep underground to geothermal power plants on the earth’s surface. Ormat, through its unique designs and operating processes, makes strong efforts to ensure that this precious resource is not depleted. The geothermal resources Ormat develops involve 100% reinjection and recirculation of the geothermal fluids back into their respective reservoirs, in what is referred to as “closed loop” systems. This is considered a highly efficient method to continuously recharge geothermal systems, by maintaining consistent water flow and pressures. Reinjection of geothermal fluids, which are often referred to as “brines”, as they contain water, salts and other minerals, serve as a measure to reduce production-related pressure drawdown and promote enhanced thermal energy extraction from the heated rocks within the reservoir. Importantly, reinjection also avoids the need for disposal of wastewater into nearby surface water bodies and minimizes the amount of make-up water required to keep a geothermal reservoir viable. Ormat emphasizes resource management and almost all of our plants are air-cooled without requiring make-up water. Our company is known for our pioneering advances, which achieve 100% recirculation of the exploited geothermal fluid (condensate and brine) back into geothermal reservoirs. Visibility Finding the right location for energy generating facilities in a manner that reduces their visual prominence on the surrounding environment is an important aspect of minimizing the footprint associated with geothermal energy generation. The visible plumes geothermal power plants emit consist of water vapor emissions in the form of steam. No harmful emissions such as carbon dioxide, sulphur dioxide or nitrous oxides are released because geothermal power plants do not combust fossil fuels. Even so, the visual disturbance caused by a steam plume can be further reduced by thoughtful design. Ormat designs and sites geothermal facilities to blend into the surrounding landscape, through the actual physical locale of each facility, the configuration of units that are used to build it, landscaping, paint and other surface finishes. All are important factors in limiting the visual impact of a facility and ensuring the surrounding land remains suitable for other land uses. Interestingly, studies show that over a typical 30- year lifespan of a power plant, a geothermal facility consumes 404 square meters of land per gigawatt hour, while a coal facility consumes 3,632 square meters per gigawatt hour 2. Phased Development Ormat applies a phased approach to the development of geothermal fields. This entails first developing a field by beginning with a smaller facility. Once the field has been thoroughly assessed and the viability of the geothermal resource is proven, additional facilities are added to the complex. Phased development also enables Ormat to manage cash flow and facility investment in a prudent, risk-reduced manner and to generate income from an initial facility while other phases are in development. Ormat Technologies, Inc. 2012-2013 Sustainability Report Ormat’s application of this approach is aptly demonstrated by the steady expansion of our Olkaria III geothermal project, which we have developed in phases since 2000, when it first achieved commercial operation with a 13 MW plant. In January 2009 the facility’s second phase vaulted the plant’s capacity to 52 MW. In 2013 a 36 MW addition was completed and in the beginning of 2014, with the completion of the 3rd plant, Olkaria III achieved a plant capacity of 110 MW; a higher than expected capacity, the result of the geothermal reservoir proving to be more successful than expected. Modular Design Ormat is a strong proponent of modular design and integrates this approach into the geothermal facilities and REG power plants that we build – both for clients and for our company. Modular components inside a power generation facility significantly reduce operating risk. For example, in Ngatamariki, instead of installing a single 100 MW unit, four identical modular 25 MW units were installed and they generate the same amount of electricity, but provide robust backup, as each can work separately from the other. This means maintenance or operating anomalies don’t impede the generating progress of an entire facility, and can be contained and resolved with less impact. It also means that when constructing a large plant, each of the units can be put online one after the other and therefore start generating revenue months earlier. Together, these four pillars contribute to the safe, low-impact, long-term development of geothermal resources that help offset fossil fuel consumption and exploit a naturally occurring resource in a fiscally and environmentally responsible manner. Ormat’s Olkaria III geothermal power plant at its first phase, when it was just generating 13 MW in 2000 19

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