Ormat Technologies, the world leader in geothermal energy, is once again going hybrid, adding solar energy to a geothermal plants to raise efficiency and to boost income from the energy off-taker, Southern California Public Power Authority (SCPPA). The 18 megawatt photovoltaic solar installation will cover the geothermal plant’s parasitic, or operational energy consumption, freeing up power that SCPPA agreed last year to purchase at a hefty rate of $75.50/MW-hour.
Ormat is adding the solar PV to its 24 MW baseload Tungsten Mountain geothermal power plant located in Churchill County, Nevada, that began commercial operation in December 2017. The plant is expected to generate approximately $15 million in average annual revenue.
Since the geothermal plant does not operate as efficiently at high mid-day temperatures, the PV, which peaks at mid-day, will boost the energy output to maximize the energy sold to SCPPA. In other hybrid solar-geothermal cases, thermal solar cooling lines are used to lower the temperature of the solar PV, which helps the PV maintain maximum efficiency. PV solar cells lose efficiency rapidly when the cell temperature goes above 149 degrees Fahrenheit under direct sun.
The power purchase agreement (PPA) that SCPPA signed with Ormat is for 150 MW, with a minimum capacity of 135 MW and maximum potential capacity of 185 MW. The portfolio PPA, fulfilled by several Ormat generating projects, is for a term of approximately 26 years, expiring in December 2043, according to Ormat.
Ormat recently sold a share of the Tungsten Mountain project to an unnamed private investor for an initial purchase price of $33.4 million, with additional installments that are expected to amount to $13 million, the company says. Ormat will continue to operate and maintain the power plant and will receive substantially all the distributable cash flow generated by the power plant, it says.
“We are excited to close another partnership transaction that enable us to better benefit from tax incentives available to geothermal projects,” commented Isaac Angel, Ormat’s CEO, at the time of the sale.
Tungsten Mountain is the first geothermal generation site at which Ormat plans to add solar generation to cover the parasitic load. Solar development is one of the elements of Ormat’s future growth plans, and has been a part of its strategy for a decade. “We ultimately hope to be able to leverage our technological capabilities over a variety of renewable energy platforms, including solar power generation and energy storage,” Ormat’s 2017 10K filing notes.
“Our focus currently is in installing solar PV systems in some of our operating geothermal power plants to reduce internal consumption loads. We are planning to install the first system in Tungsten Mountain. In addition, we are looking for hybrid projects that involve intermittent power (such as Solar PV) and energy storage,” the 10K report adds.
Not all of Ormat’s growth in solar will be organic. “We are actively pursuing domestic and international acquisition opportunities, both within our existing business lines and the solar power generation and energy storage businesses,” the 10K observes.
Part of Ormat’s solar plans involve the addition of energy storage, the key focus of its Viridity business, acquired in 2017. “As part of our services offering expansion through Viridity, we have developed our battery storage as a service strategy to provide comprehensive holistic solutions for energy storage, demand response, energy management through nimble and flexible business models, technology and product solutions,” the 10K states. “We plan to develop, build, own and operate energy storage facilities and provide related services in diversified markets,” the report adds.
In its first commercial solar project, in 2009, Ormat developed 36 MW of solar PV systems in Israel in a joint venture with privately held Sunday Energy. The development deal had an expected capital investment of $195 million, the company says. The energy generated by the joint venture is sold to Israel Electric Corporation under a 20-year power purchase agreement that generates some $30 million a year, Ormat says.
Sunday Energy is a solar energy operator, solution provider, and integrator with a current project pipeline of 200 MW, and a project backlog worth $550 million, the company profile says.
Ormat, based in Reno, has engineered, manufactured, and constructed over 2,500 MW of power plants, which it currently owns or has installed to utilities and developers worldwide, the company says. It is the largest US-based geothermal operator with an 800 MW portfolio, spread globally in the United States, Guatemala, Guadeloupe, Honduras, Indonesia and Kenya, the company adds.