Thursday, May 9, 2019

Sweden: Update from Geothermal "Heatpower" Company Climeon

Interim report for the period January 1 - March 31, 2019 - Climeon (News Release)

Thomas Öström, CEO Climeon: During the first months of 2019, we have taken further steps to increase the pace and width of our expansion, by finding strong partners such as Breakthrough Energy Ventures and through a directed new share issue which strengthened the cash position and added strong institutional investors in Europe and the US.

During the quarter, we delivered our first machines to customers within the geothermal area in Japan. The conditions for low temperature geothermal heat power in Japan are very good and the market potential is great, which is why Japan is a prioritized geographic market for Climeon. However, having had a representative office open for almost a year we can note that the local licensing processes that customers have to go through, including for drilling and connecting electricity, take time. It remains a challenge for us that it takes more time for customers within geothermal to get their sites and permits in place than they and we initially estimated. These external factors extend current lead times.

In Iceland, work with Varmaorka on our first joint geothermal power plant has continued at a good pace. After extensive testing of our machines and the customer's surrounding design, the customer approved the facility in March. Now long-term tests are underway with Varmaorka and the electricity company HS Orka before complete handover of the operation to Varmaorka. Along the way, we have encountered many challenges in the construction of this first geothermal power plant. Now, Varmaorka and Climeon are taking all the learnings from this intensive first power project into the next projects to become even better at building geothermal power plants and supply more local communities with green electricity.