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Ormat Technologies Inc. - Analyst/Investor Day

Stocks in this article: ORA

If you look at the 2 white columns, they are our cost without the impact of Brawley. If we actually take the impact of North Brawley away then you can see that the reduction in cost has been very steady, and again, very impressive. How have we done that? It's really 3 major elements. The first one is the strategy of developing scale both on a company level, on a corporate level, but especially on a regional level. Expanding operating plants by creating satellite facilities. Sometimes, if you expand an existing field, that's of course, it's a no-brainer in many ways. But even our development in Nevada, development in California and even the development of the heat recovery system, all of this has been done by creating centers of operations. Sometimes, people have to travel 30, 40, 50 miles from that center of operation, but using technology, we can actually leverage existing manpower into expanding generating capacity.

So this is the first element. It's development strategy of how we expanded our facilities. The other one is really leveraging technology, whether it's a technology that allows us to use less people for the same or to make more megawatts from the same number of people. But the other elements of technology are how to leverage things that we have learned on the performance of equipment, where do we need to improve equipment so that an issue that came up in one plant in Kenya is not only repaired in Kenya with upgraded

Equipment, but is also, we're also taking care of anywhere else in the fleet to prevent it from occurring and causing us downtime and costs.

And then, the third element is really leverage -- leverage the scale of the company either on the supply chain, buy smarter, buy cheaper. Or what has been more important is to find out areas where, yes, it's a small company or it's a standalone facility, it makes no sense to get those resources in place. You cannot control the resources and you have to buy them from somebody else. And to move into creating operating facilities or operating groups that provide shared services in areas that standalone facility or a small geothermal player just cannot afford to have.

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