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Consolidation in sector to continue, so Hezy Ram of Ram Power

Drilling Rig at Orita project by Ram Power, California (source: Ram Power)
Alexander Richter 16 Sep 2010

The CEO of Ram Power, Hezy Ram, says that the consolidation in the geothermal industry will continue and that his company might look at opportunities should they add to share holder value.

In presentation at a recent investor conference, the CEO of Ram Power, Hezy Ram, says that the consolidation in the market is likely to continue ” and further reduce the number of publicly traded companies”.

According to Reuters, “Geothermal power, which taps the heat stored far below the earth’s surface to generate electricity, has higher upfront development costs than other green energy. That makes mergers in the sector more likely as companies look to bulk up for expensive projects, said Chief Executive Hezy Ram.

“It does require a lot of expertise, what they call human capital, and it also requires lots of financial capital. And that’s why you don’t have that many players in the space,” Ram said via a webcast at an Imperial Capital conference.

“Today we have about five or six publicly traded companies in this space, mostly in Canada. I think that when we meet next year it’s going to be even a smaller number of players. Eventually, I expect to have just a few champions, large companies that are well capitalized and able to develop those projects internationally.”

Ram Power itself is the product of sector consolidation after the privately held developer merged last year with Polaris Geothermal, Western GeoPower Corp and GTO Resources.

On Sept. 3, the Reno, Nevada-based company closed a stock deal to buy Vancouver-based Sierra Geothermal Power, valued at about C$28 million ($27 million).

Ram said he expects US Geothermal Inc (GTH.TO: Quote) (HTM.A: Quote) and Nevada Geothermal Power Inc (NGP.V: Quote) “also to go through some kind of consolidation.”

He doesn’t rule out further acquisitions by his firm and said any future deals must add to shareholder value and include high-quality assets and employees.”

Source: Reuters