Ormat Technologies, Inc. (‘Ormat’), a vertically integrated company, primarily engages in the geothermal energy power business.
The company leverages its core capabilities and global presence to expand its activity in recovered energy generation and into different energy storage services and solar PV, including hybrid geothermal and solar PV, as well as solar plus Energy Storage.
Segments
The company conducts its business activities in three business segments: Electricity, Product, and Energy...
Ormat Technologies, Inc. (‘Ormat’), a vertically integrated company, primarily engages in the geothermal energy power business.
The company leverages its core capabilities and global presence to expand its activity in recovered energy generation and into different energy storage services and solar PV, including hybrid geothermal and solar PV, as well as solar plus Energy Storage.
Segments
The company conducts its business activities in three business segments: Electricity, Product, and Energy Storage.
Electricity
In the Electricity segment, the company develops, builds, owns, and operates geothermal, solar PV, and recovered energy-based power plants in the United States, and geothermal power plants in other countries around the world, and sells the electricity they generate. Since the beginning of 2024, the company commenced or expanded commercial operation of 41MW of geothermal and solar PV power plants, including the 6MW Beowawe geothermal repowering, 17MW of the Ijen geothermal power plant in Indonesia, the 5MW Steamboat Hills solar power plant, as part of the Steamboat Complex, the 7MW North Valley solar PV power plant, and the 6MW Beowawe solar PV power plant. In addition, the company added 99MW of geothermal and solar PV assets from an acquisition it completed in January 2024 from Enel Green Power North America (‘EGPNA’), a subsidiary of Enel SpA (ENEL.MI, LLC).
Product
In the Product segment, the company designs, manufactures, and sells equipment for geothermal and recovered energy-based electricity generation, and provides services relating to the engineering, procurement, and construction of geothermal and recovered energy-based power plants.
Energy Storage
In the Energy Storage segment, the company owns and operates grid-connected In Front of the Meter (IFM) BESS facilities, which provide capacity, energy, and ancillary services directly to the electric grid. The company operates its facilities in three main areas in the U.S., California, Texas, and the East Coast, and generates its revenues mainly from the sale of ancillary services in the merchant market and/or tolling agreements and RA contracts. Since the beginning of 2024, the company commissioned three energy storage facilities with a total capacity of 120MW/360 MWh in California and New Jersey.
Electricity
The company’s company-owned power plants include both power plants that it has built and power plants that it has acquired. The substantial majority of the power plants that the company owns or operates produce electricity from geothermal energy sources. Geothermal energy is a clean, renewable, and generally sustainable form of energy derived from the natural heat of the earth. Unlike electricity produced by burning fossil fuels, electricity produced from geothermal energy sources is generated without emissions of certain pollutants, such as nitrogen oxide, and with far lower emissions of other pollutants, such as carbon dioxide. As a result, electricity produced from geothermal energy sources contributes significantly less to climate change and local and regional incidences of acid rain than energy produced by burning fossil fuels. In addition, compared to power plants that utilize other renewable energy sources, such as wind or solar, geothermal power plants are generally available all year long and all day long, and can therefore provide base-load electricity services. Geothermal power plants can also be custom-built to provide a range of electricity services, such as baseload, voltage regulation, reserve, and flexible capacity.
The company owns and operates geothermal and solar PV hybrid projects and has similar projects under construction, in which the electricity generated from a solar PV power plant is used to offset the equipment’s energy use at the geothermal facility, thus increasing the geothermal energy delivered by the project to the grid. In addition, the company owns and operates standalone solar PV power plants that sell their output under long-term contracts.
The company also constructs, owns, and operates 50MW of recovered energy-based power plants. It has built all of the recovered energy-based plants that it operates. Recovered energy comes from residual heat that is generated as a by-product of gas turbine-driven compressor stations, solar thermal units, and a variety of industrial processes, such as cement manufacturing. Such residual heat, which would otherwise be wasted, may be captured in the recovery process and used by recovered energy power plants to generate electricity without burning additional fuel and without additional emissions.
Each of the company’s geothermal power plants sells substantially all of its output pursuant to long-term, and in most cases, fixed-price PPAs to various counterparties denominated in or linked to the U.S. dollar or Euro. These contracts had a total weighted average remaining term, based on contributions to segment revenue, of approximately 15 years as of December 31, 2024.
Power Plants in Operation
The company owns and operates 35 power plants and complexes globally with an aggregate generating capacity of 1,248 MW. They include geothermal, REG, and solar sites. Geothermal constituted 86% of the company’s Electricity Segment generating capacity. In 2024, the company’s geothermal and REG power plants generated at a capacity factor of 84% and 70%, respectively, which is higher than the 20%-30% capacity factor typically generated in wind and solar projects.
New Power Plants
The company is in various stages of construction of new power plants and expansion of existing power plants. It has released for construction projects with generating capacity of 134MW from geothermal and solar PV worldwide. In addition, the company has several geothermal and solar PV projects in various stages of development. These projects are located in the United States.
The company holds substantial land positions across 31 prospects in the United States and 13 prospects in Ethiopia, Guatemala, Honduras, Indonesia, and New Zealand that it expects will support future geothermal development. These land positions consist of various leases, exploration concessions for geothermal resources, and options to enter into leases. The company has started or plans to start exploration activity on many of these prospects.
Product
The company designs, manufactures, and sells products for electricity generation, and provides the related services. In addition, the company provides cementing services for well drilling to third parties. The company primarily manufactures products to fill customer orders, but in some situations, it manufactures products as inventory for future projects that it will own or for future third-party projects.
Power Units for Geothermal Power Plants
The company designs, manufactures, and sells power units for geothermal electricity generation, which it refers to as OECs. In geothermal power plants using OECs, geothermal fluid, either hot water/brine, steam, or both, is extracted from the underground reservoir and flows from the wellhead to a vaporizer that heats a secondary working fluid, which is vaporized and used to drive the turbine. The secondary fluid is then condensed in a condenser, which may be cooled directly by air through an air-cooling system, or by water from a cooling tower, and sent back to the vaporizer. The cooled geothermal fluid is then reinjected back into the reservoir. The company’s customers include contractors, geothermal power plant developers, owners, and operators.
Power Units for Recovered Energy-Based Power Generation
The company designs, manufactures, and sells power units used to generate electricity from recovered energy, or so-called ‘waste heat’. This heat is generated as a residual by-product of gas turbine-driven compressor stations, solar thermal units, biomass facilities, and a variety of industrial processes, such as cement manufacturing, and is not otherwise used for any purpose. The company’s existing and target customers include interstate natural gas pipeline owners and operators, gas processing plant owners and operators, cement plant owners and operators, and other companies engaged in other energy-intensive industrial processes.
EPC of Power Plants
The company serves as an EPC contractor for geothermal and recovered energy power plants on a turnkey basis, using power units it designs and manufactures. The company’s customers are geothermal power plant owners, as well as its target customers for the sale of its recovered energy-based power units.
Energy Storage
The company has targeted the Energy Storage segment as one of its major segments for investment and growth. The company owns and operates 16 BESS projects in the U.S.
New BESS Projects
The company is in the process of constructing six additional energy storage projects with a total capacity of 385MW/1,300MWh in California, Texas, and New Jersey.
In addition, the company has an approximate 2.9GW/10.7GWh pipeline of potential projects in different stages of development across the United States that will support its target to reach an energy storage portfolio of between 950-1,050MW/2,500-2,900MWh by the end of 2028. The company plans to continue leveraging its experience in project development and finance, its engineering, procurement, and construction know-how, and its relationships with utilities and other market participants, to develop additional BESS projects.
Business Strategy
The company’s strategy is focused on further developing a geographically balanced portfolio of geothermal, energy storage, solar PV, and recovered energy assets, and continuing its leading position in the geothermal energy market with the objective of becoming a leading global provider of renewable energy. The company focuses on helping to create a sustainable energy infrastructure and further an alternative energy future where greenhouse gas emissions are reduced, and the ability to access and store renewable sourced power, including geothermal energy, will enable electricity grids to become more responsive, more stable, and more environmentally friendly.
The company’s strategy focuses on three main elements: developing its low carbon renewable geothermal business in the United States and globally; growing its market position in the IFM energy storage market; and exploring opportunities in new areas by looking for synergistic growth opportunities, utilizing the company’s core competencies, strong market reputation, and new market opportunities focused upon environmentally responsible solutions in the energy sector.
The company’s strategies include the development and construction of new geothermal power plants; expanding its geographical reach; accelerating the development and construction of new energy storage assets; acquisition of new geothermal assets; acquisition of energy storage projects and assets; diversifying the company’s customer base; improving the company’s technological capabilities; manufacturing and providing products and EPC services related to renewable energy; and expanding into new technologies.
Patents
As of December 31, 2024, the company had 190 patents and patent applications worldwide, including 55 patents issued in the U.S. and 28 pending patent applications worldwide, with 2 of them U.S. patent applications. These patents and patent applications cover the company’s products, mainly power units based on the ORC, and systems, mainly geothermal power plants and industrial waste heat recovery plants for electricity production.
The system-related patents also cover subjects such as waste heat recovery related to gas pipeline compressors, and industrial waste heat, solar power systems, disposal of non-condensable gases present in geothermal fluids, reinjection of other geothermal fluids ensuring geothermal resource sustainability, power plants for very high-pressure geothermal resources, two-phase fluids, low temperature geothermal brine, as well as processes related to EGS. The remaining terms of its issued patents range from one year to 16 years.
Research and Development
The company’s research and development expenses for the year ended December 31, 2024, were $6.5 million.
Future Projects
Projects Released for Construction
The company has several projects in various stages of construction, including 8 projects that it has fully released for construction with a total capacity of 134MW, and one project with capacity of 10MW to 15MW that is in the early stages of construction.
These projects are expected to have a total geothermal generating capacity of between 92MW, representing the company’s interest, and solar PV projects with a total capacity of 42MW.
Projects under Various Stages of Development that were not Released for Construction
The company also has projects under various stages of development in the U.S. that it estimates will increase the generating capacity of its geothermal projects by approximately 22MW, and a Solar PV project with a total of 14MW.
Future Prospects
The company has a substantial land position that is expected to support future development, and on which it has started or plans to start exploration activity. The company’s land position consists of various leases, concessions, and private land for geothermal resources in 44 prospects across the western U.S., Latin America, and Africa. In the U.S., the company holds 31 prospects, including 21 prospects in Nevada, 4 prospects in California, 2 prospects in Oregon, 3 prospects in Utah, and 1 in New Mexico.
Outside the U.S., the company holds 13 prospects, including 5 prospects in Indonesia, 4 prospects in Ethiopia, 2 prospects in Guatemala, 1 prospect in Honduras, and 1 prospect in New Zealand.
Competition
Electricity
The company’s main competitors in the U.S. include CalEnergy, Calpine Corporation, Cyrq Energy Inc., and other smaller pure-play developers. Internationally, the company’s competitors are gaining experience from developing geothermal projects in their home countries, such as Mercury and Contact Energy in New Zealand, Energy Development Corporation in the Philippines, Storenergy and Meridian in France, and Enel Green Power in Italy. In Indonesia, Ormat experiences competition from Kaishan, PT Pertamina Geothermal Energy, PT Star Energy, and in a recent tender from Chevron, who teamed with Pertamina to compete for land.
Product
The company’s main steam turbine competitors are industrial steam turbine manufacturers, such as Mitsubishi Heavy Industries, Fuji Electric Co., Ltd., and Toshiba Corporation of Japan, GE/Nuovo Pignone, and Ansaldo Energia of Italy.
The company’s binary technology competitors are manufacturers using the ORC technology, such as Mitsubishi Heavy Industries through Turboden, TICA, a Chinese air conditioning company that acquired Italian Exergy, Egesim, a Turkish electrical contractor who is collaborating with Atlas Copco mainly in the Turkish market and internationally, Kaishan, a compressor manufacturer from China who also develops its own projects, and Fuji Electric Co., Ltd. of Japan.
Customers
All of the company’s revenues from the sale of electricity in the year ended December 31, 2024, were derived from fully-contracted energy and/or capacity payments under long-term PPAs with governmental, public, or private utility entities.
The company’s revenues from the Product segment are derived from contractors, owners, or operators of power plants, process companies, and pipelines.
The company’s revenues from the Energy Storage segment are derived from selling energy, capacity services under long-term capacity contracts, and/or ancillary services in merchant markets, such as PJM Interconnection, LLC (PJM), ISO New England, ERCOT, and CAISO, or under long-term tolling agreements that secure fixed revenues. In addition, the company is pursuing projects that will serve entities, such as investor-owned utilities, publicly owned utilities, and community choice aggregators.
Regulation of the Electric Utility Industry in the U.S.
The company examines its projects’ compliance with NERC standards on an ongoing basis and begins work on the process of NERC registration as new projects approach the threshold at which NERC standards become applicable.
Regulation Related to the Energy Storage Segment
The company’s participation in the energy storage space and in energy management requires it to obtain and maintain certain additional authorizations and approvals. These include authorization from FERC to make wholesale sales of energy, capacity, and ancillary services at market-based rates, and membership status with eligibility to serve designated contractual functions in the Independent System Operator(ISO)/ Regional Transmission Organization (RTOs) of PJM, New York Independent System Operator, Inc (NYISO), California Independent System Operator (CAISO), ISO-NE, and Electric Reliability Council of Texas, Inc. (ERCOT).
EPC of Power Plants
The company’s manufacturing operations and products are certified ISO 9001, ISO 14001, American Society of Mechanical Engineers (ASME), Pressure Equipment Directive, and TÜV, and the company is an approved supplier to many electric utilities around the world.
History
Ormat Technologies, Inc. was founded as a Delaware corporation in 1965. The company was incorporated in 1994.
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