Ormat Technologies Inc. Secures Two Major Energy Storage Agreements in Israel

Ormat Technologies secures two 15-year energy storage agreements in Israel, partnering with Allied Infrastructure for 300MW capacity.

Quiver AI Summary

Ormat Technologies Inc. has secured two 15-year tolling agreements for energy storage facilities in Israel, awarded by the Israeli Electricity Authority, marking its first significant entry into the Israeli utility-scale energy storage market. The facilities are expected to deliver a combined capacity of approximately 300MW/1200MWh, developed in partnership with Allied Infrastructure LTD, with both companies sharing ownership equally. The partnership aims to further develop additional energy storage projects as they advance through the interconnection and permitting stages, targeting commercial operations by 2028. Ormat CEO Doron Blachar expressed enthusiasm about these agreements, highlighting their significance for the company’s growth strategy in energy storage and their role in supporting Israel’s renewable energy goals.

Potential Positives

• Ormat Technologies has secured two 15-year tolling agreements for energy storage facilities in Israel, marking its first major entry into the Israeli utility scale energy storage market.
• The combined capacity of the awarded projects is approximately 300MW/1200MWh, enhancing Ormat's portfolio and competitive position in the energy storage sector.
• The partnership with Allied Infrastructure LTD suggests a strategic collaboration that may lead to further project developments in energy storage, aligning with Israel’s renewable energy goals.
• These long-term agreements are expected to improve Ormat's portfolio profitability and provide stability to margin performance, which are key components of the company’s growth strategy.

Potential Negatives

• The press release emphasizes that the energy storage projects will not commence commercial operations until 2028, indicating a significant delay before any revenue or operational contributions are realized.
• The tolling agreements have an option for termination, which introduces uncertainty about the long-term viability and commitment to these projects.
• The reliance on a partnership for these projects could imply potential risks associated with shared ownership, including management disagreements or operational inefficiencies that could impact project success.

FAQ

What recent agreement has Ormat Technologies signed in Israel?

Ormat Technologies has signed two 15-year tolling agreements for energy storage facilities with the Israeli Electricity Authority.

What is the combined capacity of the new energy storage facilities?

The energy storage facilities are expected to have a combined capacity of approximately 300MW/1200MWh.

Who is partnering with Ormat for these energy storage projects?

Ormat is partnering with Allied Infrastructure LTD for the development of these energy storage facilities.

When is the expected commercial operation date for these projects?

The commercial operation date for the energy storage facilities is expected in 2028.

How does this agreement impact Ormat's business strategy?

This agreement is a key strategic milestone that enhances Ormat's energy storage portfolio and profitability.

Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.

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Full Release

RENO, Nev., Feb. 13, 2025 (GLOBE NEWSWIRE) -- Ormat Technologies Inc. (NYSE: ORA), (“Ormat” or the “Company”) a leading geothermal and renewable energy technology company, today announced that it has won a tender issued by the Israeli Electricity Authority and has been awarded two separate 15-year tolling agreements for two Energy Storage facilities. The facilities under the tolling agreements are expected to have a combined capacity of approximately 300MW/1200MWh.

These projects are developed in partnership with Allied Infrastructure LTD (“Allied”), a leading infrastructure company in Israel. The ownership of the projects will be shared, 50/50 between Ormat and Allied. This marks Ormat’s and the partnership’s first major entry into the Israeli utility scale energy storage market. The partnership intends to develop this activity and develop additional Energy Storage facilities.

The parties are in advanced stages of obtaining the interconnection for the two projects, and the necessary land use permits ahead of starting construction. Commercial operation date is expected during 2028. The tolling agreement includes an option for termination of the initial contract and move to participation in the merchant market.

“We are delighted to announce the award of these two tolling agreements, marking another key strategic milestone for our growing Energy Storage business,” said Doron Blachar, Chief Executive Officer of Ormat Technologies. “These long-term agreements highlight our team’s ability to advance and execute Ormat’s Energy Storage portfolio expansion strategy. The tolling agreements for these two assets will further enhance the Company’s portfolio profitability and add stability to margin performance, each a key element of our growth strategy in our storage business.”

Blachar concluded, “These energy storage contracts mark the Company’s first owned project in Israel, and we look forward to continuing to work with Allied as Ormat’s capabilities and assets will now help drive Israel’s efforts to achieve its renewable energy and energy continuity goals.”

ABOUT ORMAT TECHNOLOGIES

With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (“REG”), with robust plans to accelerate long-term growth in the energy storage market and to establish a leading position in the U.S. energy storage market. The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed for utilities and developers worldwide, totaling approximately 3,400MW of gross capacity. Ormat leveraged its core capabilities in the geothermal and REG industries and its global presence to expand the Company’s activity into energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat’s current total generating portfolio is 1.5GW with a 1.2GW geothermal and solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and a 290MW energy storage portfolio that is located in the U.S.

ABOUT


THE


ISRAEL


I


ELECTRICITY


AUTHORITY

The Israeli Electricity Authority is a government authority charged with providing utility services, setting tariffs, regulation, and oversight of the electricity market in Israel.

ABOUT


ALLIED INFRASTRUCTURE LTD

Allied Infrastructure LTD is a multi-disciplined specialist contractor working primarily in the Airports, Highways, Defense and Construction sectors. Allied is delivering innovative and quality services using specially developed materials to offer complete solutions to preserve, protect, maintain and restore infrastructure assets, especially in the airside environment.

ORMAT’S SAFE HARBOR STATEMENT

Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this press release, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. Actual future results may differ materially from those projected as a result of certain risks and uncertainties and other risks described under "Risk Factors" as described in Ormat’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 23, 2024, and in Ormat’s subsequent quarterly reports on Form 10-Q that are filed from time to time with the SEC.

These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.