Geothermal electricity generation uses heat from the Earth’s core to produce electricity without releasing environmentally harmful emissions. Geothermal power is constantly available, whereas wind and solar power rely on favorable weather conditions.
Most geothermal power plants use a process known as the flash steam method to produce electricity. This technique converts hot water from inside the earth into steam, which turns the generator turbine blades. The steam then cools, condenses to water and flows back into the ground.
In February 2016, the U.S. Energy Information Administration (EIA) estimated that the use of geothermal electricity production would increase by 4% during the year. Investors in search of geothermal power stocks should consider these top five companies involved in the geothermal power industry.
Calpine Corp. (NYSE: CPN) is America’s largest producer of geothermal power. Calpine operates several geothermal power plants in The Geysers, located north of San Francisco. It is the largest geothermal power facility in the world. Unfortunately, The Geysers was damaged by a wildfire in September 2015, resulting in repair costs and revenue losses, partly thanks to the company’s $36 million insurance deductible. The company’s $8 million 2016 business interruption loss was offset by insurance proceeds. As of July 2016, The Geysers was operating at 95% capacity. The company expects The Geysers to be operating at its pre-fire level by the end of 2016. Calpine reported a loss of $229 million during the first six months of 2016.
Ormat Technologies Inc.
Ormat Technologies Inc. (NYSE: ORA), based in Reno, Nevada, is the only geothermal and recovered energy generation (REG) company that uses a vertical integration strategy. Recovered energy generation produces electricity from heat that would otherwise be lost during such processes as oil drilling and cement production. Ormat constructs combined cycle geothermal power plants in which the steam first produces power in a backpressure steam turbine. The steam is subsequently condensed in the vaporizer of a bottoming organic vapor turbo generator, which produces additional power. Ormat uses its own internally developed products and systems patents.
In addition to owning and operating geothermal power plants in the United States and other countries, Ormat designs, manufactures and sells power generating equipment as well as complete power plants. On Aug. 2, 2016, Ormat reported second-quarter net income of $24.3 million. The company reported quarterly revenue of $104 million from its electricity segment and $55 million from its product segment.
U.S. Geothermal Inc.
U.S. Geothermal Inc. (NYSE: HTM) is a pure play independent geothermal power producer, operating power plants in Neal Hot Springs, Oregon; San Emidio, Nevada; and Raft River, Idaho, for a total power generation capacity of approximately 45 megawatts. The company has an additional 90 megawatts of projects under development. On Aug. 9, 2016, the company reported net income of $799,000 during the first six months of the year and revenue of $14.16 million for the same period.
Chevron Corp. (NYSE: CVX) began its geothermal operations in the 1960s by pioneering the development of The Geysers series of plants north of San Francisco. In the 1970s, Chevron developed two geothermal projects in the Philippines. In the 1990s, the company began producing geothermal electricity at the Salak and Darajat fields on Java, Indonesia, with a combined operating capacity of 647 megawatts.
Chevron has a 40% interest in the Philippine Geothermal Production Company Inc., which operates the Tiwi geothermal facility in Albay Province and the Mak-Ban geothermal facility in Laguna and Batangas provinces. These two facilities provide steam to the third-party Tiwi and Mak-Ban geothermal power plants in southern Luzon.
Berkshire Hathaway Inc.
Berkshire Hathaway Inc. (NYSE: BRK-A) holds an 89.8% ownership interest in Berkshire Hathaway Energy Company. NV Energy (also known as Nevada Power) is the subsidiary of Berkshire Hathaway Energy involved in the operation of 19 geothermal power facilities in the state of Nevada, with a combined operating capacity of 425.5 megawatts.
According to Berkshire Hathaway Energy Company’s SEC Form 10-Q for second quarter 2016, energy produced by renewables accounted for only 0.28% of the electricity generated by NV Energy during the first six months of 2016. NV Energy’s other renewable power sources contributing to that 0.28% portion include solar, wind, biomass/landfill gas and hydroelectric.