Ormat Technologies, Inc. (NYSE: ORA), an Israeli geothermal energy company, has entered into an agreement with TG Geothermal Portfolio, LLC (a subsidiary of Terra-Gen, LLC) to acquire two contracted geothermal assets in Nevada with a total net generating capacity of 67.5 MW (net), a greenfield development asset adjacent to one of the plants, and an underutilized transmission-line. The acquisition is expected to close in the second half of 2021, subject to regulatory and other customary closing conditions.
Of course an Israeli company is a global leader in the development and use of geothermal power. Geothermal power is power generated by geothermal energy, which is a renewable energy source. Technologies in use include dry steam power stations, flash steam power stations and binary cycle power stations.
According to the U.S. Energy Information Agency, geothermal power plants use hydrothermal resources that have both water (hydro) and heat (thermal). Geothermal power plants require high-temperature (300°F to 700°F) hydrothermal resources that come from either dry steam wells or from hot water wells. People use these resources by drilling wells into the earth and then piping steam or hot water to the surface. The hot water or steam powers a turbine that generates electricity. Some geothermal wells are as much as two miles deep.
Under the terms of the agreement, Ormat will pay TG Geothermal Portfolio, LLC $171 million for 100% of the equity interests in a portfolio of entities that own the assets described below and will assume debt and associated lease obligations of approximately $206 million book value as of March 31, 2021.
The acquired entities own, among other things, the following assets: Two operating geothermal power plants in Nevada; Rights to Coyote Canyon, a greenfield development asset adjacent to Dixie Valley with high resource potential; An underutilized transmission line, capable of handling between 300MW and 400MW of 230KV electricity, connecting Dixie Valley to California.
— ThinkGeoEnergy #geothermalnews (@thinkgeoenergy) May 24, 2021
And in other good news for Ormat, the Bureau of Land Management (BLM), Nevada office, announced a Record of Decision for the North Valley Geothermal Development Project San Emidio Geothermal Field proposed by the company which will produce climate-friendly renewable energy for Nevada and California. Think Geoenergy reports that this project supports the Biden-Harris administration’s Executive Order Tackling the Climate Crisis at Home and Abroad by expanding renewable energy opportunities on public lands. The project went under an environmental impact assessment by BLM in a process started in June 2020.
“The Black Rock Field Office works hard, and in coordination with experts and Tribal neighbors, to expand development of renewable energy sources such as geothermal where appropriate on public lands,” said Black Rock Field Manager Mark Hall.
Founded in 1965, Ormat Technologies is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (“REG”), with the objective of becoming a leading global provider of renewable energy. 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.
With 77 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 584 employees in the United States and 762 overseas. Ormat boasts that its flexible, modular solutions for geothermal power and REG are ideal for vast range of resource characteristics. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed to utilities and developers worldwide, totaling over 2,900 MW of gross capacity. Its current 917 MW generating portfolio is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe. Ormat expanded its operations to provide energy storage and energy management solutions, by leveraging its core capabilities and global presence as well as through its Viridity Energy Solutions Inc. subsidiary.
Doron Blachar, CEO of Ormat Technologies, said, “This transaction bolsters our leadership position in the western United States, and particularly in Nevada, and increases our ability to provide electricity to both California and Nevada to help each states’ utilities meet their expanding clean energy requirements. This transaction aligns with our strategic goal of enhancing our geothermal portfolio through M&A activities. We are confident that we can leverage our distinctive core capabilities to unlock value by achieving synergies and enhancing generation and efficiency of the acquired assets. Additionally, to maximize our returns, we plan to use our strong balance sheet and low-cost capital sources to reduce over time the cost of assumed debt. Together with the projects’ skilled employees, I am confident that we can increase significantly the profitability and value of the acquired assets.”