Ormat Technologies, Inc. (ORA) September 2026 Capital Markets Day Transcript

Good morning, everyone, and thank you for coming to ORMAT's 2026 Investor and Analyst Day. We really appreciate you coming here. We will have a very full morning with management to give you a background. Our goal is to not just talk about what we are doing today and give you an update what the company is doing now, but also give you a clear way to what we believe we can do from here. We will start with Doron Blachar, our CEO. He will talk about the changing electricity market and what opportunities it will create to ORMAT, how we scale the electricity segment and how much more value we can capture. Then we have Ofer Ben-Yosef, our EVP, energy storage and business development, take you through the energy storage segment, and we will talk about how we are building the momentum we have here in this segment. We will take, sorry, ASI will come and talk a little bit about the product segment, and more importantly, we'll convert everything you hear today to financial outlook, capital allocation, and how we create more value from that. We will take a short break after that, maybe a few questions before a Q&A session and a short break, and then we come back, switch gears a little bit. We have a few members of management coming to the stage, and we will have a deeper discussion on EGS, what we think, how the EGS is going to change the geothermal market, and what opportunities it may bring to ORMAT. We'll have another session of Q&A, and Ron will recap the day, and then we'll go to lunch. But there I have one important job that I have to do, and apparently this part of the presentation I cannot change or skip because I have the GC here that I really like, so I have to do what she's telling me to do. So I have to read now the forward-looking statement with your permission. So today's discussion includes forward-looking statements regarding our EGS strategy, technology, development, pilot result, resource potential, project timelines, capital requirement, manufacturing plans, and potential financial outcomes. These statements reflect management current expectations and assumptions. Actual results could differ materially due to the risk summarizing today's presentation and described in our most recent Form 10-K and subsequent SEC filings. Certain figures discussed today are preliminary estimates, design targets, ambitions, or illustrative scenarios. They are subject to technical validation, commercial arrangements, regulatory approval, interconnection, financing, and our return thresholds. Please review the forward-looking statements and risk disclosure included in the presentation and available through our Investor Relations website. ORMAT undertakes no obligation to update these statements except as required by law. And with that, out of the way, Doron, the floor is yours.

Good morning, everyone, and thank you for joining us here and in the webcast. I hope you enjoyed the long weekend you had and happy that you decided to start the week with us. so these are the management members here in the room you'll see some of them on the stage later and here and the others are in the audience and obviously available for any questions that you have during the breaks also with us, not on the slide, is Stanley Stern which is one of our directors in the company. So I will start with a very, very one-slide discussion about Ormat. And we are the largest geothermal owner and operator globally. We have 1.3 gigawatt of operating assets, most of them in the U.S. And we'll see later all the locations that we are operating in other five countries. Our energy storage segment is 1.4 gigawatt hours. All of it is in the U.S. Offer will later present the segment and the status in it and how we're growing it. But as a heads-up, we are more than doubling our site as we are working today. And the product segment, it's actually complementary to the electricity segment on one hand, but we are also selling our equipment to other developers and building other power plants. We are the largest in the binary technology, have been since, I think, the inception of the company and maintaining that position today. And later, ASI will elaborate on where the product segment is going. But our main market today is New Zealand. Over the last 12 months, just to understand the sizes, we've commissioned three power plants for three different customers. Each one is a 50-megawatt power plant, and next year we will commission a 100-megawatt power plant in New Zealand for a fourth customer. We are used to work and build very large facilities. Now let me take you back a little bit in time to what we said two and a half years ago in our previous Investor Day. Our previous investor day was at the beginning of 2024, so all the numbers in the next few slides will be comparing to the year-end 2023. So we are 44% growth in the megawatts, from 1.3 to 1.9 gigawatts, 22% in the electricity segment, and 191% growth in the energy storage segment. And if we go to the megawatt hour, it's over 350% growth for the energy storage. I think what you see here is that we are continuously growing our core business and our energy storage business, the geothermal and the energy storage, based on traditional geothermal and stand-alone storage facilities. Most of our facilities are stand-alone. Basically, we're delivering services to the grid. Out of the 565, we acquired 180 megawatts. If you do follow our math over the years, we continuously acquire geothermal assets. I can tell you that any asset in the U.S., we see it as a target for an acquisition. We are continuously in discussions with the different owners to know and to see when is the right time for them to sell and for us to buy. And we did our first energy storage acquisition earlier this year, the 30 megawatt in Hawaii. It is the first one, and I'm sure that in the coming months and year, you'll see many more acquisitions like that. If I move from the megawatts to the dollars, so revenue-wise, we've increased by 43% from the year end, 23, to the last 12 months in 2026, ending in June. and EBITDA went up 32%. This is more than a double-digit growth on both parameters. This is what we have been doing for the last few years. This is what we are committing as we move from investor day to investor day. And on the right, I think you can see somewhat of a change. If, you know, in 23 and before that, OMAD was purely or only a geothermal company, were 94, sometimes more percent of its revenue and adjusted EBITDA was allocated to the electricity segment. Last 12 months it went down to 75 percent, so 25 percent is product sales and energy storage. I think the product and energy storage had a very, very good run in the last 12 months. So going forward I don't see the same parameters. so I believe the electricity will go up but it will not go up to the height it was in the past it might go to 80, 85% but all along you can see a company that moving from being just a geothermal company to a renewable energy company a view of a portfolio company not of a technology company and if we move from the megawatts dollars to execution this is what we've been able to do in the last two and a half years. We've signed 700 megawatts of PPA. These are 11 PPAs that we've signed over the last two and a half years. We are a developing company, so we are in construction of 700 megawatts. This is something that continuously goes on because whenever we see all their projects, we already release the next project. We are accustomed to developing multiple projects in multiple locations between the geothermal and the energy storage. And the additional pipeline that we have, if you look at it, it's between 2.9 to 3.7 gigawatts. And if you go to the small print, we have 46 geothermal sites, and these sites have the potential of between 700 megawatts to 1.5 gigawatts. This is something that we haven't discussed in the past, but we are continuously acquiring prospects in every BLM auction. We compete on EGS, and we'll have a full session later on EGS, but we buy traditional geothermal land positions because as we COD project, as a developer project, we need to continue and build our prospects and pipeline to go forward. So this is between 750 to 1.5 gigawatts. It's a large range because most of the sites haven't been fully explored yet, and it takes time to evaluate the actual megawatt that we'll be able to get from every site. And we have 26 sites for energy storage, 8.5 gigawatt hours. Now, when we talk about the site, it means it has a name. We usually have the land, and we usually fight for interconnection. We're not just putting out megawatts that we think we might get, that we have an option to buy maybe in the future. These are actual sites that we turn. It's an actual pipeline and site that we turn into actual projects as time passes. So if you look at the two and a half years since the last investor day, the revenue went up, the EBITDA went up, the megawatts that we have went up. We've grown to a much larger company, and the execution, I think, is unmatched in the industry. And with that, I will move actually to see what has changed in the electricity segment and what gives us the confidence that the last two and a half years are a preview of the next two and a half years that will be much better than these two and a half years. And that's before talking or discussing EGS at all. So we see here the expected growth in the U.S. All the numbers that you see here are pure U.S. numbers. So if in the past, since 2005 until 2025, 20 years, the electricity market in the U.S. grew 30%. And in previous analyst states, we had to explain that the growth of renewable will come from moving from fossil fuel to renewable energy. So that trend hasn't changed. But what changed is the demand. And the demand for the next 25 years is 40 percent growth, 1.3 percent growth annually. A large of it coming to data center, but not just data center. The world is moving to electrification, and that is creating the additional demand. And when you look at the demand, it was in 25, 1,250 gigawatt, with 37% of renewable, and it's expected to grow to almost 2,000 gigawatt. And the part of the renewable is expected to grow to 49%. So on one hand, we are enjoying 37% of any growth, but on top of that, we are enjoying a move forward to renewable energy much stronger and much faster than people could have looked at. And if renewable energy basically needs to double itself until 2050. coal will exit and renewable energy will grow and you'll see in a few minutes that renewable energy obviously geothermal cannot supply this amount of electricity definitely without EGS but the solar and the wind that will come with it demand the energy storage they do not work without energy storage In the market, there is always concern about the data center and how the data center are impacting the demand. Are they asking for more? What will happen if they will need less? So this is an analysis of the growth of the demand in the U.S. You can see in the light blue the data center. So in the next five years, there are going to be 28% of the growth. But in the following years, their part in the growth is going down. They're doing now a catch-up of building data centers to support the AI, things that are required to catch up what is missing. But afterwards, it goes down. And what continues to go up is residential, commercial, basically the electrification of the world. So if the two main parameters that drive the demand are data center and electrification and EV, then the simple answer will come, so what is the demand, how does the demand look over the day? Can solar or wind support this demand? And when you look at the numbers and the graph, you see that the demand is for baseload. exactly what geothermal is and what storage makes solar and wind. If I would have asked you how would be the load requirement for EV charging, most of us would say we charge at home at night. But the reality is that that's correct, but there is commercial EV charging. And that actually flattens the demand for EV charging over the day. and I can tell you I have a hybrid car sometimes I charge it at night at home sometimes I charge it during the day at the office the demand will continue and stay as a baseload demand and will add more and more requirement for geothermal energy and solar and storage and wind and storage and stand alone storage to support the grid and make sure that the grid is stable. At the end of the day, we all want a stable grid. And when you look at the grid, this is exactly Ormat. Ormat is a powerhouse. We are a powerhouse that generates electricity, firm, clean, flexible and reliable energy. Ormat is not one technology or one asset. were a combination of assets and technologies that we've built over many, many years. We call it an OMAD powerhouse because each line item here reinforces the other one. There's a very close relationship between the market feed, the technological leadership, the project delivery, the owner-operator DNA, and obviously the financial strength that supports all of it. and I will go one by one. So the grid needs baseload and reliable energy. That's what the grid needs and that's exactly what OMAD is providing. Geothermal provides firm and flexible generation. We operate 24-7 360 days in the year independent of weather and storage on the other side adds the stability and the reliability for the grid. The larger the penetration of solar and wind and renewable energy to the grid, the larger demand for storage will be. And you'll see it later in our presentation that regardless of how much growth the market is forecasting for energy storage, the actual is much higher than the forecast. And the reality is that they keep on increasing the forecast demand for energy storage. And when you look at these two businesses, and I was the CFO when we started this energy storage business, we had to explain how they're competing while doing this. But when you look today at the grid, you see the synergies between them. We speak with the same customer. We work with the same business development. We use our own electrical engineers to design the storage facilities and the geothermal facilities, a lot of synergies, and they complement one another. And on the technical leadership, we are 60 years in the geothermal value chain. We have subsurface expertise. We have the largest and the most professional subsurface team in the geothermal industry. They are very, very focused today on traditional geothermal and the same processes and the same professionalism that we have today. Today we will duplicate into the EGS and Daniel will elaborate on it after the break. On the engineering and R&D, we have our own engineering team, we have our own manufacturing facility, our R&D. We have been doing this back and forth for decades. We have built over 3,600 megawatts of geothermal assets globally. I mentioned the last 150 that we did in New Zealand, and next year another 100. When you look for a high-class geothermal asset, you come to Ormat, because you know that Ormat builds geothermal facilities that operate for decades. And today, with the AI coming into play, we are investing a significant amount on AI. We have trained our employees with AI. We have got licenses for AI. Everything is done in a very controlled and safe environment. We're looking how to do a drilling faster, more accurate. Part of the drilling is building numerical models, building the resource models. some of the work can be done with AI on the engineering part, the design of a power plant can be implemented today, some within AI, over the future much more with AI. So AI is part in the ORMAT DNA, in the technology that we built, on the maintenance part, offer will elaborate again on it on the storage AI is running through all the OMAT facilities and manufacturing we have the manufacturing facility in-house it allows us to manage manufacturing between third-party requirements internal OMAT requirements at the end of the day when you look at an R&D team now an R&D team has two issues one they need to develop something new and when they do, they need to find a customer. So our R&D team has the largest and best customer. They don't need to look for a customer. They have the customer which is Ormat Power Plants. So we are investing in R&D and there's a continuous dialogue between the different units. Think about today if you have a problem with your Apple, you go to the call center back, back, back until you get an answer. If a power plant has a problem with a turbine or a generator or anything within the power plant, he calls immediately the engineer that designed it. He goes to the manufacturer. It's a phone call away. And that's how we maintain our technological leadership. Project delivery. We're delivering projects globally. In the U.S., we have a very, very strong business development team. that has been focused very much on getting interconnection, getting permitting, land. Now with EGS we're looking also on water. It is an end-to-end capabilities. We've modeled it and doubled it to the energy storage business, and we are modeling and doubling it into the EGS project. The ability to learn from our experience and the project that we've done is endless. and it goes continuous back and forth on the global part today presentation is focused on the US but we are operating globally we have power plants globally we have in Guatemala in Honduras in Kenya in the Caribbean in Indonesia and we're continuously delivering projects there we have a very nice pipeline also in Indonesia, but today the focus is the US. Owner-operator DNA. This is one of the uniqueness that Tormat has. When we build power plants, we build power plants that last for decades. We are looking – as an owner, your main target is to increase the return. As an operator, your main target is to reduce O&M costs. So an operator would like always to buy a Cadillac, and an owner would always like to sell a Japanese car that operates for decades. And the point is to find the right balance between these two. And this is what Omar has been doing for years. We are balancing between what Aaron, who is leading the electricity segment, wants, and Elad, who is building for him the power plants. and I just need to make sure the shareholders are happy so it's a very simple but complicated situation to find the right balance between owners and operators and the last part is the financial we can obviously not build and grow not megawatts, not in geothermal, not in energy storage without the financial support that we get We get it from a very, very strong operating cash flow. Most of our investments are based on our operating cash flows. We also use, as you've all seen and know, our tax equity transaction, selling ITC, getting financing if required and needed, and the strength of the company is the ability to continuously work and develop projects and get the financing. And as long as we have projects, and later ASI will show you the returns that are double-digit returns, we will continue to invest, and we will continue to grow the business, and we will continue to get financing. And we are always doing it in a very disciplined manner. And the M&A that we have been doing over the years are an example of format powerhouse. We buy assets that are inefficient operation because we know how to make them better. We buy assets that we can grow them, we can expand them, we can increase the generation over there. We can buy things at lower prices because we are so large, because we have the ability to demand our suppliers. And if the supplier is Ormat, then it's even an easier ask to get a better pricing. So M&A is summarizing the entire Ormat powerhouse into one transaction. and when we do have a transaction every group in ORMAT does the due diligence it's not done by third parties it's done by ORMAT and we build a model and the model is what we present to the board and that's what goes into our budget these are the numbers that we're committing and then we do the acquisition and after the break you'll see how ORMAT powerhouse definitely will make ORMAT a leader in the EGS arena because everything there is relating also to EGS. So let's see how the OMAD powerhouse impacts on three dimensions, basically. How it steps up, accelerates the pace of growth, how we capture more value in the assets, and how we transform. The strategies here are very related to one another. They are not separate. They complement each other. And I will show you on the electricity, and later Ofer and Asi will show on the other segments that we have. So stepping up the electricity segment. So this is our portfolio today. We had the 1.4 gigawatt portfolio, mainly focused in the U.S. Last 12 months, revenue was over $700 and almost $480 million of adjusted EBITDA for the last 12 months. operating in five areas today. And these are the 48 prospects that we have across the world. 35 are in the U.S., and I'll get to them in a minute. But Guatemala, Honduras, Indonesia, New Zealand are sites that we're looking to expand. Indonesia has a very, very nice pipeline. It takes longer over there. We are more cautious over there. We are much more managing the risk when we develop a project in Indonesia. And these assets will come to operate towards 2029, 2030 and onwards. It's an ongoing process that we are doing. Guatemala we have sites over there I can tell you that in Kenya we are also looking to see if there is a way to expand our facility over there so a lot of prospects, a lot of places that we are operating and we are looking how to grow the business and this again excludes any EGS in the US lately a lot of people have been starting to talk about how many acres you have and how many acres you bought We're not in the race to get acres. It's very easy to buy acres everywhere in the U.S. We are in the business of generating electricity. That's what we're trying to do. And we have 35 sites. We have 223 acres on these prospects. If you look on the existing facilities we have with the prospect, it's probably over half a million acres. These are the assets that we have today. these assets can generate between 750 megawatts to 1.5 gigawatts we're working them and you see in a few slides one by one a few sites every year in order to develop them and the regulatory pushes us forward the permitting tailwind improves us getting ready. I can tell you that when the energy emergency executive order went out, I think it went out on Thursday. I think Monday we filed five projects based on this new emergency order because we are ready. We are a machine that generates projects. And if somebody pushes us forward, we'll go faster. And all of that will bring us to a target of between 2 to 2.1 gigawatt at the end of 2030. The capacity addition, you can see, is 56% in the next five years versus 41% in the previous five years. Obviously, as you grow, percentages are much more impactful than others. this is a material step up and I'll show you from where it's coming you saw the land that we have and I think we have two more auctions of BLM auctions this year and we'll buy some more assets because every project that we do exploration we need to bring another greenfield continuously fill the machine and when we say that we have a pipeline a development pipeline it's real pipeline you can see that and I start from the bottom you know people always talk about interconnection will we have interconnection how complicated it is so we are working for decades and that's why out of the all the prospects that we have that should be COD by the end of 2030 almost 80% have an executed GIA executed GIA means there is an in-service date that the utility has committed to us, and the others are in the queue. And as a general comment, my view to the company is that the in-service date should be the COD date of the project. And every time the COD comes after the in-service date, it means the process was either too long or we were too slow, or something external happens. permitting doesn't always work as fast as I want them. We have 79% of all the permits required for these assets and 70% of the PPAs which is a good number because the more you wait the higher price you get. And this is the change that we've done and we're doing on exploration. The light blue are the small diameter wells. This is part of the initial exploration that we do. We do between three to four sites every year. We've started that even before 24. I guess it's green. The middle color, green. These are the exploration. Once we confirm with the small wells where we want to drill, Then we go to get a permit and we drill full-size exploration wells. We need between two to three full-size exploration wells to confirm the resource. And once that happens, we go to the development. And what you can see is that we start with light blue, we go to green, and we continue with dark blue. And the dark blue is the development. is actually we have confirmed the resource, we have the interconnection, we have the PPA and the permit, and we are starting to build a project. And you can see that we're going from 9 to 40. This year we're going to do 29, next year we're going to do 34, and then we're going to go to the 40s. And our target is that as we get to the 40s, one third will be small diameter well, one third will be exploration, full-size well, and one third will be development. And that will allow us to bring to COD between two to four projects. Again, if the resource and the exploration is successful, there's no 100% success in exploration. There's always a risk that exploration will not be successful. But if the exploration is successful, these are the targets that we set to ourselves. So this is, again, the outcome between 2 to 2.1, our conventional geothermal business target. This is where we are looking to go before we start to discuss EGS and its implications. The growth in capacity is one part of the value creation. The second one is the ability to increase our value. You can see here the top bullets are the PPAs that our MAT have signed since 2017. And before 2017 there was a drought in PPA. There were no PPAs before 2017. I think the one before that was a few years before that. But PPA pricing went down until lower than $60 per megawatt, and today they are above $100. The premium between solar and geothermal, that was $40, went down, is going up again because the market understands we need baseload energy. We need renewable energy 24-7 with no emissions. When we speak with the hyperscalers, they want new geothermal facilities. And over the years, obviously in different times, we've signed different PPAs. These are the recontracting that we see over the coming horizon. So the first part are PPAs that we've already blended and extended, basically went to the utility, told them the PPA is ending in 2029, 2030. If you want us to re-contract with you, let's re-contract today, get the real pricing of today and not the pricing that was originally in the PPA. We've done that successfully with two power plants. We're looking at the next wave that should come in 27-28 because the next re-contracting starts in 2031, 2032 and onwards. And you need to get a little bit closer in order to do blend and extend. If we would have wanted to just re-contract all of these assets, we can do it today at the price of between $110 to $120 per megawatt hour. It is not what we're looking to do today. Today we're looking to blend and extend over time, and for that we need to get closer to the re-contracting time. And we signed PPA for long term. we invest a lot of money in building the facility and then we sign the PPA for long term you can see the diversity Google, Switch, CC Power NV Energy, SCAPA every player that buys electricity in the market is a potential customer for us we speak with them and they speak with us people want baseload renewable energy that's the main demand that we see I talked a little bit about the tax credits but if anybody would have asked me or anybody with you know Matt before the new administration well not new before the Trump administration came can I draft tax incentive and regulatory support for geothermal none of us would have drafted something as good as we see today in the market. The OBBB-A gives tax incentive to the company beyond 2033. The permitting reform that I mentioned before, the BLM land auction. We used to have only BLM land auctions in Nevada. We had one in New Mexico that required land. We had one in Utah, in Nevada, in California. We have another one in Nevada soon, and I forgot who else is this year. Idaho. So we continuously see, and the fact that there's more selling of more land, these are many more prospects for us to develop projects. So if you look at the market today and at Ormat, you see that the stars are aligned. There is power demand, which is continuously accelerating. There is significant regulatory support. Both of these push the power prices significantly higher. We have a very strong land position, interconnection. We know how to do exploration. The prospects that we have developed over the years, all of that brings the Ormat powerhouse into play and puts us at the right place at the right time to capture the opportunity that exists today in traditional geothermite. And later we will talk, it puts us in an excellent place to catch the opportunity that lies with EGS. And the last slide I mentioned already a few times and we'll have a full discussion later. EGS is a transformation event for the geothermal industry and for electricity in general. 90 gigawatts or 300 gigawatts, both are DOE numbers for 2050. You can choose number that you like, the low end or the high end. Today there's four gigawatts of geothermal assets operating in the U.S. and we'll talk a lot about it later but this is a transformation for Ormat, not just a transformation when you look at Ormat powerhouse we cannot be in a better place, a better situation than where we are now. And that's on the electricity and Ofer.

Thank you Doron. My name is Ofer Ben-Yosef and I'm leading the storage segment. I am very excited to share with you our plan for the next few years we are very proud in what we achieved so far, but more excited about the future. So Doron talked about the powerhouse of Format. Basically, it's the sum of all our capabilities that we developed over a few decades, the ability to develop projects, to construct projects, to deal with the different agencies, with the utilities, to get the money that we need to build the projects, et cetera. We took all those capabilities, embedded them into the storage segment, and we generated so far a meaningful EBITDA for the company. And our plan is obviously to grow and accelerate this growth and this value for the company. Let's start with where we are today. Today, we have a portfolio of 495 megawatts total assets, 1.3 gigawatt hour in four markets, in Kaizo, in PJM, in Aircourt, and the recent one in Hawaii. Two years ago, when we presented our targets for 2028, we had 105 to 110 million dollars of revenue and I think 65 million dollars for EBITDA and the reason that I said that we are proud we reached this target two years ahead of schedule which gives us a lot of confidence in our future growth plan and our ability to execute them. Doron talked about the growth in the storage market You can see that in the last three years, the market grew in 2.3x, and we grew in the same rate as the market. But going forward until 2030, the market plans to triple itself, but our plans is more ambitious. We think that we will grow 4x on top of what we have today. This forex is not a wishful thinking. There are a list of projects behind it. We developed our pipeline over many years, and I will demonstrate later in the next few slides why we think that we have a solid plan with a very low risk for execution. So let's talk about demand. And Doron talked about the renewable growth, the 2x double capacity by 2050. And we need to understand one thing. When you add solar and wind to the mix, it's increased the generation, but it creates a challenge for the grid manager. The grid manager has to find a way to shift the electricity from high generation hours to high demand hours. That's only one problem. The second problem, it needs to stabilize the frequency. And there is no better tool than the storage to address these two challenges. So as long as we will continue to see a growth in the solar and in the wind, it will tail with additional growth for the storage. Another aspect is the high prices. We see very high prices in some of the markets. I will start with PJM. The last auction for capacity was closed north of $300 per megawatt day. This is an increase from the previous years. We are not operating in the capacity in PJM market. We are operating in regulation, and we are making much higher revenue than what you see here. Just as an anecdote, I think on the second quarter we had one day that we earned $8 million for 125 megawatt of assets. So you can divide it, you can make the math, it's much higher than the capacity market. So PJM is definitely a major, major contributor to our results. PJM market is not balanced. We see days that the reserve in PJM is less than 5%. This is not good. It's good for us. It's not good for the grid. So we are here to help the grid to solve the problem. We are part of the solution, and we enjoy very high revenue in PJM. We also see good tolling agreement and RA agreement in California. and this helped us to continue and turn our pipeline in California into working assets. We have a few projects that we are now developing in very late stages of development and will go live soon in California and we see a very high price of tolling. We hope that this trend will continue to other markets as well. And last but not least, We have the ITC, and it is to stay until 2033, which definitely gives us a lot of financial benefits. Let's talk about the supply chain, because, yes, we have the demand, we have the opportunity to go, but we need support from the supply chain. So definitely the FIOC creates some complications, but if you look on the overall picture, the prices of the battery continue to fall down. We see more and more new technologies, more dense, that the outcome is less dollar per every megawatt of capacity. On top of it, we see local content starting to ramp up in the U.S. And there are other non-Chinese manufacturers that are coming to play in Mexico, in Korea, in Morocco. So the bottom line is that we don't think that the supply chain will limit our growth plan. So I started to say that we have high confidence in our ability to meet our growth target, which I will reveal in a minute, but I just want to highlight why. So if we start with interconnection, interconnection is the most challenging item currently. And 89% of the projects that we count against the growth for 2030 already have a LGIA. It means that we have a contract with the utility that we will get the connectivity to the network in a certain date. And based on this date, we can plan when the COD will be. If you look on permit, 57% of our pipeline for 2030 projects is already permitted, and 24% is in advanced stages, which means that we will get a permit in the next three months. Just as an anecdote, we never fail to get a permit in the storage segment. We know how to do it. Sometimes it's very challenging. We had a case in California, in L.A. Basin, that the permit took us a lot of time. We insist. We were very persistent. We used some smart ideas, and we got the permit in the end. There was another company that started in parallel for us. They gave up because it was very challenging with the fire department. So permitting is not easy, but we know how to do it. This is part of our secret sauce, and a lot of our projects already have permits. And last but not least is PPAs. 56% of those projects already have PPAs. There is one very big project in California, in LL Basin, that we deliberately decided not to sign a PPA now because we understand, based on our experience and our knowledge, that if we wait close to the COD, we'll get higher PPA. So it's part of our tactics, but if we will add this project, so almost 90% of our pipeline is having PPAs. So those are our growth plan. Again, from now until 2030, we plan to go from 400 megawatts to 1.5, 1.6 gigawatt. This is the 4x that I refer to. And if we count it in megawatt hour, we get to 5.1 to 5.5 gigawatt hour, which is 6x. The difference is because we are moving from one-hour and four-hour batteries to two-hour and four-hour batteries, so the mix is changing. So 4X, 6X, that's definitely bigger than the market predicted growth. So the main takeaway from those slides is we are going to grow more than the market, but this is not a wish list. We have a list of projects in advanced developments. We released five out of the seven projects. Two we will release soon. Two already in construction. The rest is under procurement. And we have high confidence that we will meet our growth plan. So we talked about the growth in megawatts, but this is not the whole story. The idea is how you can capture the maximum revenue from each and every megawatt that you have. And this is a lot of our secret sauce. Let's start with the development. So we are doing everything in-house. We don't outsource to third parties. We take our own destiny in our own hand. We do everything. We learn. We do lessons learned. And we implement in a future project. That's how we make progress. I will start with the construction one of the most challenging phases of every project is the commissioning so you can start the construction to build the site to put the containers to connect everything and everything looks great but until you energize the site meaning the utility connect you to the grid only then you can really start and then you can see all the problems there are tons of parameters that you need to set up in order to make sure that everything will play as it should be and you have certain equipment which is not operating when you energize the system and the result is that in the past we always had delays in the project delays between 3 to 6 months was like regular stuff we decided that we cannot live with this and we try to look for creative ways to overcome this challenge so we decided not to wait for the utility to energize us we decided to energize ourselves three to four months ahead of time we bring a generator we connect the generator to one row of the site we test it we fix all the problem on one row and set up all the parameters and then we replicate all those items to the rest of the site and then when the utility energize us the commissioning is very fluent very easygoing and we start to see that we are meeting our COD dates with no delays this is a type of a secret sauce. Second thing is how we operate. And we need to understand that operate the system is definitely not trivial. Everyone thinks that battery is simple stuff. No, it's not. I'll give you a few examples. First, all our sites are unmanned and remote and monitored from a central location in Philadelphia. Now, Now, there are many challenges when you come to operate the system. Let me give you one example. Every row or every container is divided to unit. Each unit is separate, standalone. And in each unit, you have a lot of cells, thousands of cells. Now, some of the cells can have 100% capacity. but if 1% of the cells have only 90% of capacity this is the capacity that you can discharge to the network this is the money that you can make so you need to do a process of cell balancing and you need to do it in a smart way that will make sure that you capture the maximum capacity that you can from your batteries and at some point you have degradation so you need to take specific cells and to concentrate all the low-capacity cells in one segment to make sure that all the other segments will give you as much power as you can. And the other thing that we are doing, we implement an AI software which has allowed us to do predictive maintenance. This AI software basically analyzes all the failures that we see over time and can give us an indication that this component is about to worn out and you better replace it and then it opens automatically a work order in the system to do the maintenance and then the technician is doing the maintenance in structured maintenance hours that the prices are not high instead of doing it you know under pressure when the market prices are high and you need to take the site or part of the site down to do this replacement so by that we make sure that we optimize the capacity and we optimize the availability and we capture as much as we can from each and every megawatt that we have and the last thing we have a team of asset management that their role is to trade in the merchant and to make sure that they build the right strategy to capture the highest available revenue and are using AI-driven software in order to make it in an optimal Let me give you two more examples. So we have a process that we call it percentage of perfect. What does it mean in the merchant to be perfect? Let's assume that you have 100% capacity, 100% availability, and you have the crystal ball that can tell you what are the best hours to charge and discharge. Obviously, you don't have this crystal ball, right? But you can build a process that analyzes every day what were the conditions, what decisions you take, and then to fix those decisions going forward and implement them. So we started this process in June a year ago. Our comparison to the perfect was 77%, and we increased it to 88%. And this is very high. As I explained, you cannot get 100%. Let's assume that the prices in ERCOT are $3. and now for one hour they are jumping to $30. You discharge or you wait one hour, maybe the price will go to $60 and $100. So you need to look on all those occasions to understand when it stopped with $30 and that was the right thing to do to discharge and when, under what condition it went up to $60. So next time that you have those conditions, you will know not to discharge all your capacity in $30. You will maybe discharge only 50% of your capacity. And on the other 50%, you will bet on higher prices one hour later. Those are very tough decisions. But once you have the system to check it day in and day out and to understand the patterns, you can extract more revenue from your assets. And the last example is PJM. PJM behave in a different way. In PJM, there is a parameter that's called performance score. and the assets with the highest performance score are the first one to be called by the network and have the best chance to get the higher prices. So you can see a comparison of our performance score in PJM compared to other best sites, hydro, demand response, steam, and gas turbine. And the way that we maintain this high performance score over the last few years, this is part of our secret sauce. Doron talked a lot about long-term visibility. We are also trying to sign as much as possible long-term contracts. You can see the one in Hawaii, the one that we signed with CPA, and the one that we signed with Envy Energy. The whole idea is to create predictability and visibility for the long run. Scaling growth and reducing risk. So you can see that we are moving from a higher percentage of merchants to a bit lower. We want to balance between the merchant and the contracted and to be more on the contracted side and create predictability. and you can see that above our targets for 2030 this is not the end we are not planning to stop there on the right side you can see that we have a significant pipeline to develop in many markets beyond the 2030 to develop a project takes anywhere between four to six years so we need think now about what will happen in four to six years and make sure that we the machine is continue to work so it's the second time that we use the term the stars are aligned but this is true we have the demand we have the supply we have the regulatory support we have a very strong pipeline and we have a very strong backup from Ormat Powerhouse. Our CFO, Asi, always tell us, you will bring the project, I will get you the money to build them. And this is a good opportunity to invite my dear friend, Asi Ginzburg, our CFO. Thank you.

Very happy to be here today. You can hear from my voice that I'm not at 100%. And the reason why I'm so happy to be here today is that two weeks ago, I lost the voice completely. And Doron texted me, basically said to me, you cannot speak in the meeting in the next two weeks, and you need to stay away as much as you can from meetings. You need to reserve your voice for the analyst day. The people that know me here know that I really like to talk. So the fact that I was quiet for two weeks is devastating for me. My wife is very happy by the way she said that we never had as good marriage as the last two weeks when I was quiet but starting tomorrow I can I will try to speak up again but that's the reason why my voice is not at his best so in the first part of my presentation I will cover the one may say less exciting for a segment of OMAD but I will say if you look at the numbers very good results that we got from this segment over the last few years. We have sold close to $1 billion of products over the last six years with a record 2026 revenue and very good operating margins. When we look into the future, excluding EGS, you can see that the geothermal market, excluding EGS, is expected to add roughly 2.2 gigawatts of capacity around 400 megawatts per year for the next five years. With our 50 to 70 percent market share, assuming we will maintain it, it means that OMAT can sell as much as 200 megawatts every year, which will continue to support the 200 million dollars range anyway for 150 to 250 million dollars revenue going forward of course these are third-party developers they are not always moving as quick as we are and you will notice that none of them besides Ormat is actually developing in the US and that's where the biggest opportunity for Ormat in this segment is coming we will talk later about product segment in the EGS world. If today we expect every year as an industry to add 400 megawatts, according to the DOE, we will add over the next 40 years close to 100 giga, 90 gigawatt here. Around 3 to 4 gigawatts every year. E-Format will maintain its market share. It means billions of revenue on top of where we are today. So as I said, today we've done very well. This segment supports both our internal growth and third party. But with EGS and Erit will discuss the improvement, the technology improvement we made over the last few years, the product segment can definitely be a big factors in OMAT operation and growth for the next few years. And now probably to the best part of my day. So we will talk over the next few slides of how OMAT is planned to bring value to its shareholder. First, we plan to accelerate our growth. Second, we plan to improve our operating margins, and I will discuss how we plan to do it. And then, with EGS, the sky's the limit. Before I turn to this slide, I just want to talk about something personal that I have with these slides. So, this is my third investor day as the CFO of Ormat. In the first one in 2022, I probably weighted additional 50 pounds, and at best, I could have run 1K. In the second analyst day that we have done here, in 2024, I lost around 50 pounds, and at that time, I ran my first half marathon. According to the target that Doron put here in front of you guys, in the next analyst day, I had to do a full Ironman. So this is very challenging, Doron, but I'm up to it. So looking at the numbers, Doron mentioned the electricity segment growth for the next few years. Offer provided the storage segment for the next few years. When you combine those two, OMAT is going to double its capacity by 2030, even more than double. I think it's remarkable how we were able to transfer OMAT from a company that can grow 5% to 6% a year to a company that is doubling its size over five years. At the same time, we expect to grow our revenue by 60% in the next five years and to exceed $1.5 billion on an annual base run rate by 2030. But what is as important is that we are not skipping 2028, and we are going to meet the numbers we gave the market. On the run rate base, we expect to reach our 2.6 to 2.8 gigawatts. We expect to generate close to $800 million of EBITDA by 2028, and achieve revenue of north of $1.2 billion for 2028. When we look at 2030, what's very notable on this slide is that while our revenue is expected to go by 57%, our EBITDA is actually going to grow by 80%, which means every dollar on the revenue is going to generate more cash flow. And that's what I mean when I say we turn to shareholders. We expect to improve our operating margin, and I will discuss it in a second on the buy segment. But the more important part is we will have more than $1 billion of EBITDA by 2030. This is a remarkable growth story for Ormat, and I will show you. We have the financial strength to get there with the cash flow from our business, our tax credits that we are getting, and some additional debt. Let's read down by the segment. The electricity segment that didn't grow over the last two years is expected to grow, as you can see on the left side, by 57% in revenue, getting to above $1 billion in revenue. At the same time, adjusted EBITDA is expected to grow 67%. What does it mean? That we expect to improve our operating margins, and as you can see on the bottom right, our gross margin that was negatively impacted over the last few years with the increase in cost to operate the power plants as a result of high inflation rates is expected to recover back to the 40% level. That 11%, more than half of it, is going to come from the blend and extend, and the remaining from the Google-type PPAs that is going to generate very nice returns for our shareholders. Having all the new power plants coming with PTCs, which are north of $30 per megawatt hour now, plus over $100 PPA, makes a big difference in our business model. And therefore, we expect to improve also our EBITDA margin above 70% in the electricity segment. now let's talk about the storage segment Ofer mentioned the four times look at the left side we expect to grow EBITDA and revenue close to four times over the next five years and improve our operating margins but what is impressive that we're going to do that in a much more balanced environment where our merchant exposure is actually coming down from 56% merchant last year to only 23% merchant next year. Now, this growth is going to be also very balanced growth. We are moving from operating in four states today to nine states by 2030. Diversification. And the reason why we are comfortable with these numbers is that out of the one and a half gigawatts that we plan to operate by 2030, half a gigawatt is already under operation today, and half a gigawatt is already under construction. So it's quite easy to sit here in 2026 when we have very good visibility into the next few years of the company. On one hand, we have all the growth that we put in front of you. On the second hand, we have all the enhanced margins because of the strong PPAs, the strong tolling agreements. We are not even relying on the PGA market to continue as it is by 2030. We still think that it will have good results from PGA. because remember, PGA market gave us the opportunity to generate more income, but how the way offers showed you guys, it's also what we did with the assets, close to 100% capture rate of the available dollars. It's almost like we knew the lottery numbers the day ahead, we filled them and we won every day. We're using AI to do it we're using our experience to do it and it's showing up in our results and we expect you to continue benefits over it over the next few years but again by 2030 on the storage segment only 23 percent merchant all the rest will be either contracted or RA which is mainly contracted I mentioned return to shareholders omat is continuing to target on the traditional business which is geothermal hydrothermal and sorry storage mid teens return i can tell you that for example the last project that we released to the market on the storage segment on the project level had a 12 to 30 project IRR, but the equity IRR of it was close to 20% equity IRR. Think about it. All of our assets are fully contracted. Therefore, we can leverage them. Therefore, the equity IRR of the geothermal and the storage is significantly above the mid-teens that you see here because of the ability to leverage it. The interest rates have balanced over the last few years and we take advantage of it. I'll remind you that our average cost of debt on our portfolio today is 3.9 percent, definitely allowing us to grow the company, achieve good returns. Now later I will talk on EGS return and we expect him to be even higher and I will discuss it later but I just want to give you some you know a promo before before our break so can we finance all of this how will our mark look like in 2030 we ask those questions during the time that we build those five years plans as you can see on the bottom right between cash from operation and tax benefits, almost we cover all of our CapEx needs and our dividend needs. We only plan to add $800 million of additional net debt throughout the next few years. So if our net debt today is around $2.7 billion, it will be around $3.5 billion by 2030, maybe slightly higher if we will invest in future growth so these are for the project that we plan that will operate full year in 2030 and we will have close to a billion dollars of EBITDA so we're gonna deliver it we're gonna improve the return and we're gonna be probably still the largest geothermal company in the world. Before I request my friends offer and my boss Doron and also my friend to join me for some Q&A session, just a little bit Q&A of where we are today. We have provided a robust growth plan in front of you guys. We've shown you how we plan to improve our profitability and provide attractive returns to our shareholders and I would like to open it now for a Q&A session where the focus will be on non EGS I promise you there will be a full session on EGS smart people not me will be able to answer it like our friends here that actually doing things not just shuffling papers like the CFO So we will cover a lot of EGS growing in an hour. Before we go to the break, let's jump to some Q&A session.

I'm Robert from Noble Alpha. Thanks for this day today. My question is really on energy storage, and I would like to know if there's a risk, or I guess you will say no, but that the U.S. market replicates a little bit what happened in the Australian market, where what was very attractive return is now becoming a commodity just because of the massive scale of energy storage that has been installed in Australia. That's my first question. And also on the energy storage, you mentioned de-risking China supply, but the Moroccan supply is really China supply because that's what they're doing.

So is that considered non-Chinese if it's coming from Morocco yes the answer is yes and at any given time we will compare between two options three options to buy Chinese equipment without ITC to buy local content which is probably expensive with ITC or to buy from manufacturers like the Korean or Morocco or whatever, which is somewhere in the middle. Less expensive maybe than local content but with ITC. And regarding the first questions, I'm not sure I understand the question, so can you...

The question is, the Australian price for megawatt and...

Ah, okay, got it. So we are moving to be much more contracted with PPAs and this is exactly the reason why we are doing it to de-risk this scenario. So, once we have a PPA, we don't care. And for the portion of the merchant, we hope that by then we will return our investment and everything that we will have on top of it will be, you know, like funny money.

But I will just add, you know, we see the demand in the U.S. The U.S. is moving totally to renewable energy. Solar energy requires storage. We see there's not always a correlation between one market to the other market. We don't see the same correlation even between Texas, California, and PGM within the U.S. PGM prices have been extremely high. Texas prices have been extremely low. That's why we are looking at the portfolio approach, not focusing on just market. And as was mentioned, we're going from four markets to nine markets. And we're also looking to contract much more than what we have today.

Yeah. Good morning, Noah Kaye from Oppenheimer. So I want to ask you about the profitability improvement in electricity. There was a period of, oh, I don't know, seven-plus years where electricity consistently did above 40% gross margin. We've seen it come down. you think you can get back there. Give us some context on the inflationary trends that the segment experienced over the past several years to bring it to this point. How you think about embedding cost of inflation expectations in your outlook. And you mentioned you're on track broadly for 2028, but how should segment profitability improve in the interim towards the 40%?

So I would say that when we sign PPA contracts, even today, most of the contracts are fixed price. That's how the utilities like the contracts to be signed. We are able to get some contracts with data centers and sometimes with hyperscale that do include some indexation, but not all of it. And expenses are indexed for some part of them, not all of them. So by definition there is a reduction in gross margin versus the first year. We see the improvement coming from enhancing the power plants, which happens every cycle, from new contracts coming online and new power plants coming online. And we did see in the past when I was the CFO, now I have a different CFO, so electricity segment above 40%, growth margin, and we see now it's coming up. We expect to see it coming up next year versus this year and the following year. We do expect a trend of it increasing, starting from the blend and extend in the new contracts coming online, and on Mountain, the new Greenfield that we are bringing online as well.

Helpful. Just to be more specific, if possible, what kind of cost of inflation go forward should we embed for electricity? Are we thinking 3%, 5% on the cost?

We assume in general inflation on about 50% of the cost. The expected inflation in the U.S. between 2% to 3%.

I will just commit on behalf of Aaron that sits here and he's our new manager of the electricity segment. We're also looking across our fleet, trying to reduce the overall cost. That's one of our goals next year. so I do hope that we will actually be able to improve margin not only by PPA's improvement but also by some optimization that we're doing between our plants and Aaron brought a lot of new ideas to the table and in his behalf I will tell you that he's committed to reduce cost next year Hi, good morning.

Dylan Isano, Wolf Research so just in the electricity segment I appreciate the Blend and Extend strategy, but just curious how your outlook is accounting for potential recontracting risks, specifically in the international side.

I will tell you that we don't have a lot of risk on the international for the next few years. In the international, the only plant is one plant in Guatemala that is coming into maturity. And we are under advanced negotiation to renew the PPA at potentially even a higher price.

Hey, guys. Ben Kahlo here. Thank you for all the information. Maybe first, when you talked about, like, the goals for 2030, they're very good at just the capital allocation, the capital needs. Could you just maybe, I don't think you included EGS, and then you also have the convert as 2031, so, like, you'd be thinking about that 2030, I would imagine. I know there's a lot of unknowns there but could you just maybe talk to how you think about capital needs for EGS when you pull the trigger on anything there and then on that convert I guess it's too early to tell where it's going to be in terms of in the money or not but anything you can give there So what you've seen here is the capital allocation excluding EGS We have a long discussion on EGS, including the capital requirement for EGS just after the break.

So I suggest we will be able to respond to that. Regarding the convertible for 2031, I would say it's very common that a year before the due date of the convert, we look at the market, we see what are the alternatives available, and then we either refinance or we pay or we issue something else. So it's definitely going to be a question that we'll be discussing a year ahead of time.

And then just maybe if you could, I know you guys have talked about this in the last call, just on the product side with the new plant for EGS. Could you just talk about where you are in discussions on that front?

Ben, let's defer it to the EGS discussion.

Thanks, Chris Dendrinos with RBC. I think you opened the conversation talking a little bit about M&A and how should we think about that being incorporated in the outlook? Is that, call it upside to the numbers you have there, or should we think of this as inclusive?

M&A is something that we do. It's part of the numbers that we give to the market. It's something that we continuously do. So we do expect to have M&A within these numbers. Since we do not know the exact target size and everything, then on the capital allocation, obviously, this is something that we'll need to take into account, but it's in the numbers, yes.

And then maybe just on the electric side, I think the outlook has growth coming from, well, conventional geothermal and solar looked like it was maybe stepping up as well. Are those standalone solar projects? Are those just complementary to your geothermal existing projects? I'm just trying to get a sense for how you're thinking about the solar strategy here.

We have most of you. A big part of that relates to the solar for the auxiliaries, for the geothermal facilities. We have one or two projects of solar in storage where we're utilizing existing interconnection that we have. We don't have any strategy of building a solar portfolio.

Hi, Ryan Levine with Citi. In terms of your growth, I appreciate the updates with margin expansion and some added balance sheet capacity. But as you're looking at acquisitions and different larger investment opportunities, are you looking to relever your balance sheet in order to pursue those opportunities? And specifically on M&A, there's certain sectors or segments of your business that you're more focused on.

Can you repeat a question, please?

In terms of your ability to finance future acquisitions are you looking to expand your balance sheet in order to fund those opportunities and what type of acquisitions are you looking at between the different verticals?

If you look at the last five years we have done acquisition both on the geothermal and on the storage side and we plan to continue to do so. The balance sheet is already very strong as it is today close to $700 million of cash, plus $400 million of available revolving capacity. So we have $1 billion behind us to support the acquisitions. When we look at the acquisition, none of the one that we have done and nor the one that we expect to do are transformative acquisitions. the majority of the growth of OMAD will come from the organic growth and therefore the organic growth is mostly finance from cash from operation together with a tax credit so at this point we're not planning to increase the size of the balance sheet and if we do an acquisition over the next few months before the time we need to repay the remaining of the convert we may do with The convert, like what we did last time, just exchange the existing left of the convert with the new convert. If you look at the stock price today, it's $108. It's exactly the stock that was when we issued the convert. So the economics are very good, both for the company and for the holders. Hopefully answer the questions.

Yeah, appreciate it. In terms of the technology development, I understand there's going to be another segment on EGS, but outside of EGS, Are you seeing any opportunities to improve your cost structure around future geothermal or any other innovations to the core geothermal development cycle that you're seeing?

We are looking, as I mentioned, on AI and how AI can improve our maintenance, our operation. On the electricity side, we do expect to see some benefits coming over there. We're also utilizing AI on our engineering and construction. But we don't have today, you know, a specific target that we know how to get to reduce costs. In today's pricing, as you mentioned, the returns. I think the returns are very good for traditional geothermal. And on EGS, we'll discuss a little bit later.

Justin Clare from Roth Capital Partners. I just had a question on the IRRs. So for geothermal, they look fairly similar to what you presented in 2024. Wondering why you wouldn't see a greater uplift in the IRR opportunity as a result of PPAs going up. Are you seeing that offset by an increase in the CapEx expectations?

You know, since the last few years with the Ukraine war, a small war between Iran and Israel and the U.S. commodity wise is not being supportive of growth on top of two things that are coming with the new presidential elected Mr. Trump one is higher tariffs which does impact us and also the fact that in order to get all the tax credit we need to pay certain amounts for the construction people It's part of the rule. So we have seen an increase in the cost to build the geothermal plants and therefore the returns are as similar Okay, gotcha.

And then just one on storage looking at the targets it looks like the Adjusted EBITDA is expected to grow a little bit slower than revenue But you're seeing or you anticipate a gross margin expansion Can you explain why you wouldn't see faster EBITDA growth for storage as a result of that?

So, we are not expecting in 2030 that PGM will be as strong as what we saw in 2025. So, in reality, you have, if you normalize PGM, you need to build more capacity to generate more EBITDA, and therefore you'll have more depreciation. So that's the way it works. But still, we're looking at 70% EBITDA margin at the storage, 75% EBITDA margin at the electricity. These are very good numbers to be in without taking into consideration a very good PGA market. so if we will be able to meet those numbers I think this is a very good achievement for the company and again, I don't know how many companies you know that every dollar that shows up in the revenue also shows up in the EBITDA line item one more thing to remember different from some other public companies because we are a US GAAP company we do not include the ITC income of the storage in our EBITDA or operating margin. Every year, often my friend comes to me and said, Asi, when are you going to give me credit for the ITC income? You always take it for the low tax rate, but you forget to say that it's the storage segment. So in reality, it's a little bit different than what others are showing. If we will include ITC income in our EBITDA margins, the number would have actually go up.

Thank you.

Thank you very much. Winlam from Nomura. Could you confirm on the capital structure for the new U.S. geothermal projects and whether you're taking ITC or PTC, and do you expect to qualify for the adders?

CAPEX for a traditional geothermal is around $5 million, $5.5 million. dollar depends on the specific site, location, how deep are the whales, whether or not there is transmission line, how long is the transmission line. And we're usually getting PTCs. Economic wise, PTCs on geothermal that is a base of 24-7 comes more attractive than taking ITCs.

Do you expect to qualify for both credit adders? not at this stage.

We don't see that.

Thank you.

Hey, Derek Potyser, Piper Sandler. I want to go back to Noah's comments around the margin side. I know in the last couple of years there's been issues around T-lines being down, certain curtailments, so maybe some more third-party risk, but maybe talk to us a little bit more about the margin outlook of that 40% while considering some of those third-party issues that we've seen over the last couple of years.

Maybe I'll try to summarize. We see the gross margin and EBITDA margin going up from a few main items. we see the green fields coming into play. Green fields come with higher gross margin and higher EBITDA. This is one element that is part of the gross, organic growth that we showed you. The second one that will come into play is the blend and extend that we've shown and PPA pricing that are higher than what we've seen in the past. The third element that we do expect is a very thorough analysis and push that Aaron and his segment are doing on reducing cost. I think these are the three elements that build up the gross margin going from 29% to around 40%.

That's helpful. And then I guess you mentioned 48 sites for geothermal, 750 megawatts, so one and a half gigawatts. It's about 25 megawatts per site. I know we're going to get into EGS next. But what about optimization of the conventional geothermal, any sort of technology that you're looking at? I know we've talked about AI optimizing some of your drilling operations, maybe some new products that are coming out. How can we think about maybe upside to that 25 megawatts per site that you're putting out there?

On traditional geothermal, the one major parameter that sets the megawatt is the resource. It's the temperature of the resource, the pressure that you find in the resource and the size of the resource. Many of these sites are pre-exploration, so if you do the analysis, it's roughly between 15 to 30 megawatt per site. That's our base assumption. As we move forward in the exploration, we fine-tune the number. So on the megawatts, we don't see a big change. We don't see AI will not generate more resource to generate more electricity. We're always trying to optimize the above-surface equipment that we manufacture and design, and that gives some additional upside but not the insignificant numbers that you are looking for.

Great, thanks.

Alex Innes with Van Berkman Global. Just wondering, I understand that your 2030 forecast for energy storage doesn't assume that merchant prices stay where they are for PGM, but then it is very interesting that PGM is a big part of your development pipeline, so clearly you see continued opportunity in that market. I guess, is there anything specific that you're seeing, whether it's maybe significant growth in storage capacity in that market that may depress merchant prices over time? Because the reserve margin is what it is. I mean, as you said, it's at record lows, and pricing continues to be really robust. So I'm just wondering if there's anything specific that you see that tampers your expectation for merchant pricing and PGM going forward.

Yeah, we see a development of capacity market in PGM, and all our new pipeline in PGM is towards this capacity market.

I'll just add that the projects today in PGM are one-hour projects. In the pipeline, most of them are one to four hours in order to support the capacity market that we expect to start. Okay, so thank you all. we have a break until 11 at 11 we start the EGS discussion let's get in so we can start

the second part of the day let's start thank you for coming back for the really interesting part of the day so for this part we have on stage Doron, Assy an offer that you already heard today. And joining us also Daniel Malk, EVP, Subsurface, Wells and Next Generation. Nirit Grushko, EVP and CTO, Innovation, R&D and Technologies. And Paul Thompson, VP, Business Development. Thank you. So before we, okay, after we had that session on the core business and we showed how a robust growth we have until 2030 and show how electricity demand is accelerating and changing and what that change plays directly to Ormat's core capabilities and strength and how we are using those strengths to grow faster and capture more value from our existing businesses, we also presented a strong growth plan through 2030 that does not depend on EGS, as you saw on the slides. It is supported by projects, capabilities, and opportunities that we have today. EGS could be the geothermal industry's equivalent of the Shell Revolution, significantly expanding the accessible geothermal resource base and unlocking a step change in market size, project development opportunities, and long-term growth. So before we get into the conversation, let's take a minute to see what EGS means.

For over 60 years, ORMAT has been unlocking the Earth's natural heat. But what comes next has the potential to redefine geothermal energy forever. Traditional geothermal exists in specific areas where hot water aquifers can be found deep in the underground subsurface. Reliable and proven, the reservoir sets both how much power it gives us and where we build. Today, that changes. Advances in drilling and completion technologies now let us reach something far more widespread and abundant. The Earth's vast reserves of hot rock, almost anywhere beneath our feet. In ORMAT's highly promising next-generation geothermal pilot projects, including EGS, we drill deep underground to create pathways through naturally heated rock, circulate fluid through that hot rock, and bring it back to the surface to feed ORMAT's energy conversion system, forming the Earth's constant energy into local, clean, reliable baseload electricity. At the very moment the world is demanding unprecedented amounts of clean, always-on power, We are applying over 60 years of geothermal leadership to help build what's next. With deep experience, technical expertise, and unique position in the global energy market, ORMAT is driving the next chapter of geothermal energy. The future of clean energy, powered by experience.

Okay, what you have just saw illustrate why there is a lot of excitement around next geothermal. And if we go to this slide, you can see here, Doron presented it before. EGS has a potential to expand geothermal into a much larger source of reliable, low-carbon power. This could enable bigger projects with greater scale in new location and potentially even behind-emeter opportunities. And for ORMAT, this is about much more than technology. It is about combining decades of experience, expertise in development, power generation, technology, engineering, manufacturing, construction, subsurface capabilities and partnership that we believe can expand the opportunity that is available to us. So I'll start with Doron. There are many companies entering the next generation market, from startup, technology companies, oil service companies, and major energy players. When you look at the competitive landscape, what gives you the confidence that Ormat can become a leader in this space?

So maybe before going back, we see the previous slide that shows the potential growth for EGS and just think about what we've discussed in the past about the demand that continues to grow significantly and this is the supply so if EGS is technological capable and economical this is the supply and what you see between the supply and the demand is the OMAD powerhouse. Now, when we look at many other developers and many other companies, most of them are focused on technology. EGS is a technology how to generate heat from the ground. But what we know is that's not the target. The target is to develop power plants and generate electricity. This is the target, And this target can be achieved only if you are able to do all the elements that we have been doing for decades. It's starting with exploration. Even on the EGS part, you first need to understand the rock. You need to do some analysis before you actually start drilling an EGS project. We have the people to do it, and we are multiplying the people in other locations getting more experience. Development. If you don't fight for interconnection, and Paul will talk later about interconnection, and if you don't get land, if you don't have water rights, it doesn't happen. If you don't know how to design a power plant, how to build it and how to operate, it doesn't happen. So when I look at the market and see the various companies that are trying to enter the geothermal market, it's not EGS market, it's a geothermal market, I can clearly see why we should be a leader in this market. You need to have the entire skills together.

So, Doron, if I simplify that, the competitive advantage is not one individual piece of technology. It is the ability to bring the entire project together. Is that the right way to think about it?

Exactly. Ormat, and we showed you before, is a powerhouse of generating electricity. We have the full capabilities from zero to a power plant, operating power plant, and to operate it for decades. We know how to get the permitting, the water, the interconnection. We are filing. We filed in the past. We will show you later today that effectively we are utilizing existing assets that we have today to build EGS projects. And from the long term, we are looking to be a long-term player. We have been a long player. We have power plants operating for 40 years. We're signing, re-contracting them for another 25 years. This is where we are. This is our bread and butter, developing geothermal power plants, either on traditional technology that we've discussed before, or on EGS technologies, or on the SAGE technology that Daniel will elaborate, pressurized technology that Daniel will elaborate later. So we have all the capabilities to maximize this opportunity.

So this is our forte, the powerhouse of ORMAT. So let's go below ground. One thing that sometimes gets lost in the EGS discussion is that there isn't just one technology or one approach. ORMAT is currently pursuing two different subsurface pathways through the ORMAT SLB alliance and the SAGE collaboration. And Daniel, you are leading our subsurface activity, so let's start with the technologies themselves. Can you please explain in practical terms how the two approaches differ and what each is designed for?

Yes, of course. I'm very excited, actually, to explain it a little bit. We have here in this slide a conceptual graphic showing the different technologies, and to the left on the hydrothermal system, you can see what we are doing today. And the EGS technologies or pressurized EGS technologies that we are pursuing, they are by concept the same. We are trying to connect deep to the earth to mine heat from below the feet to the surface that we can electrify it. In our hydrothermal systems, the heat is present and also the medium that transports the heat to the surface, water, is present already in natural damaged rock. To expand the portfolio of geothermal, we are expanding to places where only hot rock exists. The concept we are going to do with the geothermal alliance is that we drill the target rock horizontally and we create connections between a dedicated injection well and a dedicated production well by stimulating this frog and creating an artificial aquifer. In this artificial aquifer, we are injecting continuously cold water below the ground. It heats up, and we can produce it from the production well on surface and generate electricity where no hydrothermal reservoir is existing. And with the SAGE technology, the principle is also comparable. We are, again, connecting to hot rock with dedicated drilled wells. We are creating artificial aquifers. With the SAGE technology, the wells are not connected. Each well is a producer and an injector by its own. So to generate power, water is injected into a dedicated well. It heats up. It has pressure. And when the pressure is relieved, it is injected in another well. and the flow of hot fluid to the surface can then be electrified. And this goes back and forth why the pressurized technology from SAGE is very often also being described as a half-and-puff system because one well is breathing out and the other one is breathing in and creating a baseload generation with this technology. Sounds very simple, Daniel. what is the status of the two pilots today so currently we are developing the first pilot with the SLB Geothermal Alliance it's our venture we have together with SLB at our desert peak facility in Nevada and it is currently in the planning stage and in the data acquisition stage we are going to a proven field, but we are taking a much deeper look into the rock, into the subsurface to plan very well. This exploration phase will end by the end of this year when we start mobilizing rigs and choosing our final targets. In the year of 2027, we will drill both wells, a dedicated injection well and a dedicated production well with the EGS technology and create this artificial reservoir and we want to complete the installation of the wells by the end of next year and then go in 2028 into a testing demonstration and operational phase with this pilot. In parallel Sage Geosystems is also going to implement their technology at an ORMAT site in Nevada. the status is comparable to the one with SLB and the geothermal alliance currently there is a planning phase and the planning of the first of the start of the first drilling campaign is actually by the end of this year there's a little bit of an evaluation phase in between so by 2028 it is planned that both wells have been drilled by Sage for their Huff and Puff system and also there during the year of 2028 we can go through the testing operation phase to in the end of the day evaluate the results from both pilots.

So as these pilots move forward what are the most important things you want to learn and demonstrate?

So currently we are choosing different pathways ways and different technologies for success, so we are also diversifying a little bit the toolkits that we want to use for EGS. But in principle, both pilots are supposed to answer the same question. We want to have the execution, of course, safe, but we also want to have it repeatable to be able to scale it up in the future. We have models behind both pilots that we want to prove we want to prove them by demonstrating that the plant generation of electricity matches those model and we call it the reservoir performance is supposed to be proven we also have fluid management EGS projects they need water and we want to see that the water loss and the water amount we need is in accordance to our models and we want to start during the pilot phase already to follow a learning curve for the drilling and for the performance and we want to be on this learning curve when we enter into the production and operation stage of the pilots. In the end of the day, if we take it all together, we want to be able to simulate and forward look what the generation costs per megawatt are with the technology that we want to demonstrate and that will help us to scale up to commercial scale with already declared targets within a midterm commercial development. We want to bring the subsurface costs below three million per megawatt and see a lot of potential then going forward to get below this target on the long term but ultimately we want to answer the question how can this technology support future implementations and how do the economics of this technology look like in the future so how a this collaboration give us or met access to two different a subsurface technology and how those

collaboration translate into Ormatt's ability to develop EGS projects in the future?

I think it's important to mention that the collaborations with both companies, with SLB where we have the partnership and with Sage where we have made an investment in, they go far beyond the pure pilot implementation phase after the pilot phase we have signed already commercial agreements how we have access to the technologies and we can start right now I'm thinking about commercial implementation in the future so to do so we are building our own EGS capabilities we are building up a team of well engineers, reservoir engineers and reservoir modelers and production engineers and completion engineers who can capture the learning and the know-how from the pilots and enhance our own capabilities and build a team and the know-how exactly like we have in the hydrothermal business today to be ready for commercial deployment in case the pilots are successful and can then be repeated on commercial scale.

Okay, sounds like you're going to be very busy in the next months and years. It's very exciting. Okay, while that technology work is progressing, Gormat is not waiting to begin developing the opportunity. We are advancing another critical part of the equation in parallel, project development. Our BD teams are identifying the most attractive resources and securing the land and development rights needed to turn that resource potential into commercial projects. Paul and Daniel, your teams have been mapping the EGS opportunity across the western U.S. What have you learned and how are you turning that work into commercial development pipeline?

Maybe I start with a mapping process that we are doing, because that is, in the end of the day, a big handover and handshake between the subsurface team and the business development team. What we are currently doing to prepare commercial deployment of the technology, if we get good results from the pilots, we are taking a very deep look into the subsurface. What we see here on the picture, that's a public map of the heat profile in the Western US, together with Geothermix, a third-party geothermal-specialized company by SLB. We're taking now a very, very detailed look state-by-state into the EGS potential, but also narrowing down the real locations for commercial deployment. So far, we have done it for six states, and we are continuing for the entire Western U.S. And narrowing down those opportunities provides a very good basis then for our business development team to come up with a plan how we can deploy those opportunities into projects.

Thanks, Daniel. You know, EGS is very exciting, and it's created a lot of job security for us in business development because now Daniel's team can go find very high-potential EGS resources all over the country. Before, we used to chase very bespoke hydrothermal resources, and they kind of were where they were, and we had to develop them. And I think we developed them in some of the harshest conditions possible, because where there was hydrothermal anomalies, there was permitting constraints, they could be located in the middle of nowhere, and we made these projects work, and we have a really successful 60-year history. now I'm getting polygons from our EGS team who worked with geothermics and we are looking at these lands and trying to decide how we can get them and we're going to cover kind of three examples for you one you know we combed through our half a million acres that we have under control today to say where are projects where we have potential EGS and we've identified some of those projects. Then in the public land auctions, we've gone after EGS parcels, and we've been quite successful most recently in Utah and New Mexico. And then we're going after what's maybe most exciting to me, which is private lands, where we can see projects that maybe have water rights with them, that are close to existing transmission, that allow us to really accelerate the EGS development. So our business development team is really applying our knowledge for the last two decades to advance EGS as quickly as possible. So let me focus on the land position specifically. In Nevada, combing through all of our existing leases, we've identified about 30,000 acres of land that we think has high EGS potential. And our general counsel is here, so she's cautioned me to say we think that there is a really good potential, but it's potential, yet to be proven that this could result in about a gigawatt of generation. And it's important to note there that we have really good on-the-ground resources. We know the regulatory structure. We have existing transmission and interconnection. We have water rights for those projects. And so we've identified those. And, you know, as a teaser, you're going to hear a little more about one of those projects a little later on. Three weeks ago, there was a BLM lease sale in Utah, and we went after an EGS project and were successful in getting it. We are thrilled to add another 14,000 acres of high-potential EGS to our portfolio through the public land auction. Again, we think there's a potential, a probability of potentially 660 megawatts of power from just that acquisition alone. In New Mexico, we went again after public lands, and we secured 10,000 acres. We think that could do approximately 470 megawatts, maybe, if Daniel can find that resource and exploit it with all the technology she's just discussed. And what's new to Ormada, and I think really exciting, is in Oregon and Idaho, we have secured the access to private lands to evaluate 150,000 acres of land. We can exploit about 20,000 acres of that for subsurface and 1,000 acres on the surface. Going after private lands for us is kind of a new world because we've been so focused on the western United States and these public lands. So being able to work with very large landowners in the United States that have not only land rights but water rights gives us just really unparalleled flexibility for our business development team looking for these projects that we can get to market as quickly as possible. And that's just the beginning. The conversations are still ongoing, as Daron discussed earlier. We have two more public lease sales this year, both in Nevada and Idaho. There's an unbelievable amount of acreage up for auction in the state of Nevada. And we're talking to other large private landholders that we think can accelerate these projects much quicker.

So it sounds like land is not really a problem. we have enough. But one of the biggest challenges facing new power generation in the U.S. today is getting access to the grid. You see it in the energy storage. We've less experienced that in the geothermal, but now we're getting to a new market. How does ORMAT's experience in securing interconnection in the past translate into advantage as you develop EGS projects?

As a long-term developer who's delivering thousands of megawatts, we know there's probably nothing more critical than the ability to interconnect to the system and transfer those electrons along the transmission system. It really set us apart for decades in having access to the online in the state of Nevada. For those of you who don't know, there's a big transmission line kind of connecting northern Nevada to southern Nevada. Our public utility controls about 60% of it. ORMAC controls the other 30%, and it enabled us to offer projects into California or to Nevada and gave us unparalleled flexibility to find the best value for our resources. So when we start looking at EGS, we combed through our existing transmission and interconnection for our projects, and we have found places and been able to redirect transmission and find excess interconnection for hundreds of megawatts of EGS development today. I think you heard it before. Those are projects where we have the interconnection in hand and we have the transmission service rights in hand. But we didn't stop there. We know that there is going to be a much larger scale for these projects. And so we really wanted to look at what was our advantage in the industry and having land position is critical for filing for this interconnection. And we have so much land that we said, let's start filing for this interconnection immediately ahead of these public land auctions where other people can't compete with us and secure our positions in these markets. So in the state of Nevada, we have filed for another approximately 400 megawatts of interconnection. and it rolls off the tongue but it's really a paradigm shift for the business development team who used to file for 38 and a half megawatts or 50 megawatts if the hydrothermal project was really successful so going to 400 megawatts in Nevada we're filing for close to 700 megawatts in the state of Utah we are going to have you know a gigawatt of interconnection coming online in the future, and we think we're ahead of the market because we're using our existing land positions in those states to secure that competitive advantage.

So another side in BD of commercial project is customers. How are you leveraging those relationships today to build commercial market for EGS?

So again, you know, ORMAT has this kind of unparalleled history with power purchase agreements. The first geothermal projects were kind of put on the standard PPA design. One power purchase agreement, one power plant. It was very rigid. If we overproduced, you know, we don't really know in the hydrothermal world what we are going to produce until we're producing it. But we had to sign these contracts up front. And so the first contracts, if we overproduced, we got paid pennies on the dollar. If we underproduced, we got penalized very heavily. And so we started negotiating with utilities as the leader in the industry to say, look, we need a little more flexibility in these contracts. We need to create a range, whether it's 20%, and we're going to give you an idea when we capacity test the resource and we really enhance those existing PPAs. Next, we said, you know what's better than that? Let's go after portfolio PPAs where it's not just the one project dictating success or not. Let's take a suite of projects and offer them to utilities so that if one project hits a permitting snag, we can backfill it and unleash the power of ORMAT instead of going after one project in serial fashion of unleashing and going after all of our projects simultaneously to try to get to scale quickly. We're going to take that same creativity to EGS. We are negotiating PPAs right now that have a cap, that have a floor, that give us this flexibility because we're in the world of kind of the unknown of, you know, how much is this subsurface work going to cost? How often do we have to re-drill doublets and so forth? And so we're having very positive conversations with off-takers on this range of success for these projects moving forward. And I think this design is going to give us unparalleled value. It's going to allow us to have the certainty to move these projects forward and get electrons to market as fast as possible.

So Asi, as Paul just talked about, Ormat has negotiated VPA and managed project risks for decades. How important is getting the commercial structure right before we are committing to significant capital?

I think there are a few elements we need to consider when we're developing an EGS plant. The first is how we're going to deploy capital over time, and we want to make sure it's financeable. Having a PPA that is supportive of the project allows you to better monetize the PTCs or RTCs, allows you to finance the transaction, and potentially with EGS, bring some equity partners at the project level. So first, a PPA is a must in order for us to invest heavily in the business. Second, it's a way for us to manage the risk. As Paul mentioned, potentially our PPA will guarantee a certain return to OMAD. As I mentioned, we are expecting higher returns on EGS projects versus traditional projects. If the PPA price ties to our returns, it guarantees that when we will develop, we will get the best PPA in the industry. OMAD is only signing PPAs that allow us to develop assets and at the same time reduce significantly the risk if the assets won't be as big or perform as well as we anticipate. So we're trying to protect the downside and, of course, enjoy from the high side from the sides of the returns.

So, okay, hearing so far, when we talk about an EGS development pipeline, it goes well beyond identifying just a resource. So, Doron, what needs to be in place for ORMAT to consider a site commercially attractive and ready to advance?

I think the different stages will develop over time. The first EGS project, obviously, will have more risk to it because we will be basing on the pilot, but we need to know that we have all the elements for the development of the project. We need to know that we have the land, we have the water, we know the permitting interconnection and the PPA. once we have all of this we will be able to to start developing a project but this since this is new technology there's obviously some more risk that might come new later or before but we are managing it as we go the amount of information that exists today that will come up from the pilot of us and SLB or from Sage is enormous and the risk should go down as we continuously develop the project. We want to be in the market sooner rather than later, but we do want to make sure that when we go to the market with a project, we are getting the right returns for it.

Okay, so we have talked about what has to happen below ground and around the project. Now let's move above ground. An area where Ormat already has decades of technology, engineering, and manufacturing experience. I'm sure you know that by now. Over the years, ORMAT has supplied approximately 70% of the binary geothermal generating capacity installed globally. Nirit, ORMAT recently introduced ORMEGA 100.

What is ORMEGA 100, and why did you design a generating units specifically for the scale of our envision for EGS so I think scale is really the starting point with EGS product to potentially talk about much larger geothermal development hundreds of megawatt within a single location so with that think in our minds we designed Omega 100 which is 106 megawatt gross and between 72 to 80 megawatt net depend on the project configuration so what what we wanted is not a big unit the most the biggest turbine in the industry it's true that this is the biggest turbine in the industry in the ORC industry but still what in what was important for us is standardization a standard repeatable generating package that can be deployed at any EGS project. Why standardization? Because it reduces engineering complexity. It reduces the schedule of procurement, construction, and it also gives us an opportunity with a power plant in terms of operational efficiency.

Okay, so there is an important philosophy behind the design. and our objective is not to build the cheapest plant and, as you said, the bigger or quicker. Ormat owns and operates assets for decades. How does Ormat owner-operator mindset influence the way you designed Omega 100?

So it influenced the design quite significantly because we are operating these assets for many, many years, for decades. So it's not just looking on the initial CAPEX, we are looking on the entire life cycle of a power plant. So we're taking all the elements around it. For example, the turbine. We plan to have a major maintenance once a decade. We design it to have an autonomous operation. So availability is important to us. Maintainability is important to us. And, of course, a high performance over the entire life cycle of the power plant.

So it's going to be a standard unit, unlike what we have today. And so how it will impact the construction cost and timeline?

So, potentially, it will impact quite a lot, and I will elaborate a little bit on the standardization. When you have a standard unit, you need to do the design only once. You don't need to redesign it every time. You were excited about the size of the megawatt and the power plants, And it also impacts the fact that we will buy much more equipment and we will improve our power within our suppliers so we can improve the margins within the negotiation that we will do with our equipment suppliers. we can I mean it's like every mass production it's improve your spare part inventory and it improves the manufacturing setup time so there are many many aspects that can reduce the overall CAPEX so if we are looking on a current project it will take us between 24 to 28 a month our long term goal is to reduce it below 18 months. Together with that, we want that the overall, the above ground cost will reduce to $1.5 million per megawatts. This is huge. This standardization allows us to do it faster, faster deployment and reduce the duration and the cost and we design it in a way that we will have high availability for many, many years.

Okay, that's very exciting. And we're manufacturing our turbine in our site in Yavne. And if EGS develop at the scale that we're discussing now, do we have the manufacturing capabilities to support it?

The short answer is yes. Yes, we can. Actually, this is one of the advantages of the ORC technology. With our current facility, we can manufacture around 300 megawatts per year, which is four or megas. And with relatively low amount of investment and some outsourcing, we can increase this number dramatically. So I don't see any issue or any constraint with the manufacturing. I believe that as the market, we will increase our capacity as the market demands growth.

Okay, so we discussed Omega 100 primarily in the context of a project Ormat could develop and own, but Ormat has also sold geothermal equipment to third parties for many years now. How large could the product opportunity become if EGS develop at scale?

So naturally, we will be the first customer for Vega 100 for our own build project. But opportunity is very big. And let's talk numbers. As you mentioned in this presentation, that the DOE envision addition of 90 gigawatt of EGS capacity by 2050. It translates to a few gigawatts annually, and if you take this and our market share, which is 70%, you get to give and take one to two gigawatts of additional capacity every year. Addressable market for us. Even if you cut this in 50% because you want to be conservative, We are doing about $1 billion opportunity for equipment sales annually once EGS will run up. This is big.

This is a large potential offer. And the offering would extend beyond simply selling the turbine?

So the short answer is yes. Now we are selling equipment and EPC as a service. But we understand that there are new developers when it comes to EGS that don't have experience in operating large geothermal facilities so we will offer also to operate the sites for them and by that we'll give them end-to-end above-ground service that they can pick and choose and they can focus on the below ground and if they want also the below ground service we have our alliance with SLB that can solve this problem. I don't think there is anyone else in the market that can give this end-to-end solution to new developers.

Same as the hydrothermal. So potentially we might participate in EGS through two complementary models developing or operating EGS projects ourselves, while also supplying technology and services to the broader EGS industry?

Yes, as you said, this is something that we have been doing for many, many years, focusing on these two elements. But I would say our primary focus is our own development of project, building power plants for ourselves and selling the electricity. This is today our largest part of the business. This will be our largest part of the business, including EGS. This is the main focus for us. The second part is to serve the industry. As also mentioned, it's selling Omega 100, doing EPC like we're doing today, O&M services. The SLB and Omat Alliance, it is a vehicle that we've developed with SLB, and we are looking to see if we can sell more services than what we are offering today. SLB obviously has a good relationship with other developers, with other players in the market, a relationship that we do not have. So we believe the combination of the two can generate some more third-party sales. But again, the main focus that we have and the main focus that our engineers and the product segment will be focused on is building an Ormat EGS portfolio.

So we heard what needs to be done below ground, above ground, around the project. So now let's make it tangible. So Doron, we're starting from a very different position than a greenfield developer. What still needs to happen to move the first EGS project, Dixie Valley, from this development position to commercial operation?

So I think you've heard over the day in many, many places, you know, the fact that we are playing here for a long period of time and for a long term. So as EGS developed, we were looking and reviewing our internal assets, the 500,000 acres that we own, to see which asset is good enough for EGS and where we can develop our first EGS project. So when we looked at all of these assets, we found Dixie Valley as one of the best, if not the best, location in Nevada for an EGS project. This is a location that we have today, a traditional geothermal facility, and we will develop an EGS project.

So does Dixie Valley stand out? Why does Dixie Valley stand out as such an attractive opportunity for ORMAT, as you see it?

The first is the resource. We understand through the analysis that we've done that the resource in the land, not the resource actually, the hot land in Dixie can generate and can be supportive for an EGS project. And based on that, we are basically targeting today 280 megawatt EGIS project. It's going to be a three-phases project, and the target of the COD is starting from the end of 2029, going into 2032. So I would say, before getting into the specific dates of the target, Dixie is such an important and good place for us because we already have the land that is required for the project. We already have some of the interconnection already executed for 60 megawatts and filed for interconnection for the rest of the 280 megawatts. So we have a very planned stage approach on the interconnection. We have the water rights. Our existing facility uses water. We're not utilizing all the water rights that we have. We can use all the water rights in order to build this EGS project. And we are negotiating already a PPA that will fit an EGS project, taking into account the fact that it's not known exactly yet, everything is not known. There is more risk, so it will be in a higher PPA price, and based on specific IRR, different model like Paul and Asi mentioned, it's going to be a PPA that a public company like OMAT can sign and can take the calculated risk reward into it.

And from a timeline perspective, what are the milestones that we should expect?

So we expect to do the appraisal well, basically monitoring well, appraisal well, different terms for the same well in order to have a detailed understanding of the different layers in the ground and what is the right location to drill the doublets. The commercial drilling will start when we have the pilots. so we are basically utilizing all of our powerhouse from the BD from the design of the Omega 100 from the manufacturing to get ready that once the pilots are successful either Sage or SLB or both of them and we feel comfortable enough to move forward with the full project we will start immediately the construction of the project and that should happen sometime in mid 2028 it should take us to the first COD towards the end of 29 it's 18 months a bit aggressive but we usually put aggressive targets to ourselves that's why you can see here in 29 to 2030 some contingency over there and that's the first phase and for this 25 megawatts we have everything that is required to develop the project waiting for the pilots to be successful and to know exactly where to drill and how to drill the same goes to the next phase so the 25 megawatts plus the 75 megawatts this is the first Omega we will operate the first phase with an Omega 100 that will be partially utilized, and as we continue to drill the well, the doublets, we will connect them to the omega and generate electricity. The time frame of 2032 is basically based on the GIAs that we've signed and that are in the queue, and as we get the interconnection, we will be able to get to this 280 megawatts by 2032.

So Dixie Valley makes the opportunity much more tangible, as I said, but our ambition clearly goes beyond one project. How do you take that, what we are building at Dixie Valley, and scale EGS across Ormat's broader portfolio?

So you see here basically three numbers, and I can add many more. We had multiple discussions within the management, with our board, what targets should we put, what are realistic targets, what are aggressive targets, what is the market expectation, and what will the market accept as realistic targets and targets that we can build. So we put the 100 megawatts, this is a target that we know, the location, the place, we have the interconnection, we have the water, we have everything that is required to build a project, And we are targeting one gigawatt between 2033 to 2035. It's a relatively large time frame because it mainly relates to the interconnection and the ability to get enough water rights to drill this project. But it's a long-term target. It can be earlier and it can be later. This is what we are looking for. In 2028, once we finish the pilot, we'll have the technology. But Ormat Powerhouse is working in parallel. So BD, as Ofer said, Ofer and Paul said, we are buying land, we are filing for interconnection, we are getting more places, and we will continue. And the 3 to 4 gigawatts that you see here on the slide, this is what we have today. But in the next BLM auction in Nevada or in Idaho this year, we will get more land. We will get more site potential for EGS. And at that time, the 3 to 4 gigawatt will be a different number. And when additional auctions will come, the number will continue to grow. And as Paul said, we have negotiated on negotiating with private landowners. 150,000 acres, we are negotiating with other large private owners additional sites because if you own a significant amount of land and you want to develop an EGS project, you want to sign it with the right partner, you want to sign it with somebody that you have confidence that will deliver a project. the people that we are speaking they are not just trying to sell land they are actually trying to utilize and enjoy the EGS and this is something that over the next few months and next year we will continue to update you on more and more locations and sites and acres and gigawatts that we will acquire and in parallel to all of that the interconnection is being filed continuously So this is something that is evolving. This is what you see here is the initial step into the EGS market, and we will be happy to update you as we move forward with it.

Good. So Asif, from capital allocation perspective, how are you thinking about funding EGS while maintaining the return and risk discipline you have described earlier in the day?

So, as we mentioned earlier, we have all the toolkits to finance EGS projects for the next few years. It starts with the ability to utilize the great PPAs that we are assigning also on EGS in order to get project finance. It's adding to our already existing capabilities of monetizing PTCs or maybe ITC in building the plants. And three, the way we know how to work with OMAD is that if equity is required, it may be at the project level. It may be at a much later stage at the hold call level. All of those are available for us. The key is this project should have very good returns. Now, when we think about the deployment of CAPEX, In 2026, we're probably going to spend less than $30, $40 million on EGS. We have the investment in SAGE. We have the land that Paul just mentioned that we list, plus a few dollars that goes to the SLB. Probably as we look in 2027, we expect to spend roughly $100 million to fund the SLB project, to fund potentially in the second half of the year the first appraisal was for Dixie and to spend some money on buying equipment for the product segment to support the rapid expected growth. So at this level for the next two years, EGS from a capital perspective is not a big burden on the company. And when we will start spending heavier money in 2028, second half of 2028, As I said, we will use all the toolkits that already exist with OMAT to build a great company.

So we are targeting one gigawatt of EGS during 2033-2035, and the questions investors will ultimately use to evaluate EGS, what economics are required for OMAT to deploy capital?

So I would just say that I wanted to have a 2035 goal. The one said 2033. We couldn't agree, so we put a range. So this is a range, and you can see a lot of ranges here because there is a little unknown here. With that being said, let's start with the cost. Daniel said that we are targeting $3 million per megawatt for the subsurface. Nirit mentioned $1.5 million per megawatt for the above surface. So all in all, if you add those two numbers up, it's $4.5 million per megawatt. Since this will be a long journey, on our base assumption, when we are going to sign our first PPA, we are assuming that the initial cost will be anywhere from $5.5 to $6.5 million per megawatt. And that's why, in order to build one giga, we will need to spend $5.5 to $6.5 billion. I will say, though, that potentially that number will be lower. This number is slightly higher than what some other companies presented to the market. But I will tell you that our goal, and we've learned a lot about EGS already from SLB, and Daniel can probably give more information than me about it. Our goal is to develop assets with very limited decline over the years, with not a lot of need for make-up wells, and to make sure that our land already has enough room for the make-up wells that it requires in the future. And that's why our capital numbers are slightly higher than what you saw with others. All in all, if we're going to invest $5.5 to $6.5 billion, and this should be PTC eligible, and we are planning, as Nirit mentioned, to meet the local content, which means PTC won't be $33, will be close to $37. Close to $3 billion of that amount we'll be getting over 10 years of operation from the PTC monetization. So a lot of it will be financed from PTC monetization. We expect revenue from one gigawatt operation to be around $1 billion a year, which is exactly the amount that we expect to generate from the electricity segment in 2030, so we will double it. in a PPA of 120, and the PPA can be even higher. From an EBITDA perspective, including the PTC, we expect to generate, again, $1.1 billion from EGS by 2033 to 2035 every year. Again, doubling, again, OMAT expected EBITDA for 2030. Therefore, this can make ORMAT larger, profitable, transform our business model, and this doesn't take into consideration at all the potential additional revenue EB Dynism from the product So let's recap, and I see you can tell us how it will impact ORMAT beyond 2023.

We have two opportunities. One is owning our own EGS project, and one selling equipment to other. Please give your thought about how it will impact ORMAT after 2030.

Let me start by saying that the electricity segment targets and the OMAD targets that we provided for 2030 are in the future.