San Jacinto-Tizate geothermal plant reaches 60 MW net generation capacity
With a successful drilling campaign behind, the San Jacinto-Tizate geothermal plant reaches capacity of 60 MW net power generation capacity and guarantees increased revenues for the operator, Polaris Infrastructure.
In a release last week, geothermal developer and operator Polaris Infrastructure (previously Ram Power) announced financial and operational results for 2016.
The company reports record power generation and revenue from its San Jacinto-Tizate Plant, which has now reached a capacity of 60 MW net power generation capacity. The plant is located in Nicaragua, Central America.
The San Jacinto-Tizate Power Plant generated 459,990 MWh (net) (an average of 52.4 MW (net)), resulting in revenue of $54.7 million for the year ended December 31, 2016, versus revenue of $50.1 million on generation of 433,988 MWh (net) (an average of 49.5 MW (net)) in the prior year. The 9% revenue increase was due to higher average production in 2016 as well as the impact of the 3% annual tariff increase.
With the increased revenues the company has seen a significant increase in adjusted EBITDA. The Company generated Adjusted EBITDA (a non-GAAP measure) of $45.5 million in 2016, a 16% increase from 2015, driven by increased San Jacinto project revenues combined with a reduction in costs at all levels (direct costs at the San Jacinto plant, general and administrative expenses as well as other operating costs associated with legacy North America projects). Adjusted EBITDA margins improved from 78% for 2015, to 83% for 2016. See Use of Non-GAAP Measures section below for reconciliation of Adjusted EBITDA to Total income (loss) and comprehensive income (loss).
In 2016, Polaris also successfully concluded its drilling program with critical investment into the project funded through a recapitalization transaction that occurred in 2015. The result of this drilling and infrastructure program is the addition of two new production wells (SJ 6-3 and SJ 9-4), which have brought about a step-change in average productive capacity at the San Jacinto project, from approximately 48-50 MW (net) before the drilling program, to approximately 60 MW (net) after it. The 2015/2016 Drilling Program also included a new injection well (SJ 14-1), mechanical workover of four pre-existing injection wells and several important investments in above-ground infrastructure.
The company further completed its annual turbine maintenance, with comprehensive preventative maintenance completed on the Unit 4 turbine at the San Jacinto project over the course of three weeks in February 2017. This exercise was completed on schedule and under budget, and leaves us well positioned for consistent turbine performance throughout 2017 and 2018, given that the Unit 3 turbine was recently serviced as well, in July 2016. Along with performance of various maintenance activities throughout the steamfield during the turbine maintenance period, we completed installation of a new separator station with increased capacity and efficiency, which is expected to further contribute towards optimizing above-ground operations.
“We are pleased that after dealing with many important, but non-operational items in 2015, namely the recapitalization of the Company, 2016 was a year focused on our primary objective: growth and improving operations at the San Jacinto project,” noted Marc Murnaghan, Chief Executive Officer of Polaris Infrastructure. “Our achievements in 2016 were substantial, including executing a major drilling program, connecting new production wells, continuing to trim general and administrative costs and initiating a dividend. Polaris Infrastructure is well positioned for further growth and investment, and we are confident we have the team in place to continue executing on this plan.”