Renewable Energy Milestone: Ormat's 25-Year Agreement with SCPPA
Ormat and SCPPA Forge Long-Term Renewable Energy Agreement
Ormat Technologies, Inc. (NYSE: ORA), a premier player in geothermal and renewable energy, recently announced a significant milestone for the sustainable energy sector. The Company has successfully signed a 25-year extension to its existing power purchase agreement (PPA) with the Southern California Public Power Authority (SCPPA), securing the delivery of 52MW from the renowned Heber 1 geothermal facility.
Long-Term Commitment to Clean Energy
This substantial agreement is effective from early 2026 and marks Ormat's ongoing contribution to the clean energy landscape in Southern California. The pact guarantees uninterrupted supply of geothermal energy to vital services, such as the Los Angeles Department of Water and Power (LADWP) and the Imperial Irrigation District (IID), thereby reinforcing California's dedication to renewable energy.
Leadership Perspectives on Renewable Energy
“The approval of this agreement showcases the potential of geothermal energy in sustaining reliable and renewable power,” said Doron Blachar, Ormat’s Chief Executive Officer. His pride in extending the partnership with SCPPA, LADWP, and IID underlines Ormat's commitment to support California's environmental objectives.
The Heber 1 facility is not just a power plant; it symbolizes decades of clean energy advancement in the region. With its upgraded air-cooled technology, following a successful repowering project, this facility is delivering around-the-clock, carbon-free electricity. This extension ensures that the facility will meet the energy needs of California residents until 2052.
Community Impact and Support
Gina Dockstader, IID Board Chairwoman, expressed appreciation for the renewable power Ormat provides, emphasizing the significance of their continued collaboration on this reliable energy source. She highlighted IID's role in promoting renewable energy development in the Imperial Valley, which is critical for both local and state-wide energy objectives.
Daniel E. Garcia, Executive Director of SCPPA, highlighted how this agreement enhances member utilities' ability to deliver cost-effective and carbon-neutral energy, advancing California’s overarching clean energy aspirations. As the community grows, ensuring a steady and reliable energy supply becomes increasingly vital.
The Role of Geothermal Energy in Long-Term Stability
David Hanson, Senior Assistant General Manager of Power System at LADWP, discussed the strategic importance of geothermal energy in Los Angeles’s future. He noted that the Heber 1 power plant alone is set to supply energy to over 77,000 households, thus contributing significantly to diversifying the city's clean energy portfolio. This investment in geothermal power supports long-term energy security while helping to reduce reliance on traditional fossil fuels.
About Ormat Technologies
Ormat Technologies boasts six decades of expertise in geothermal energy and is recognized as a leader in the field. It operates as a vertically integrated company engaged in both geothermal and recovered energy generation (REG). The Company's ambitious plans also include a strong push towards expanding its involvement in the energy storage market.
Ormat’s operations encompass the design, manufacture, and management of geothermal and REG power plants. The company currently manages an impressive generating portfolio of 1,558MW capacity, which includes 1,268MW in geothermal and solar projects across various geographical territories, including the U.S., Kenya, Guatemala, and beyond.
Exploring the SCPPA's Role in Renewable Energy
The Southern California Public Power Authority (SCPPA) facilitates joint planning and operational efficiency for an array of municipal electric utilities in California. With members serving over 5 million residents across a vast service area, SCPPA plays a crucial role in powering California's energy landscape. The significance of their work ensures that communities benefit from affordable clean energy sources.
About LADWP and IID
For over 100 years, the Los Angeles Department of Water and Power (LADWP) has been a premier utility, delivering reliable energy and water services to the citizens of Los Angeles. With an electric capacity of 8,007MW, LADWP is committed to maintaining environmentally responsible practices while serving its diverse community.
The Imperial Irrigation District (IID) stands as a significant public utility provider in California. Serving 166,000 electric meters, IID is dedicated to maintaining low power rates while supporting local energy needs. Both LADWP and IID exemplify the potential for public utilities to lead the charge towards a sustainable energy future.
Frequently Asked Questions
What is the significance of the new agreement between Ormat and SCPPA?
The new 25-year agreement ensures the ongoing supply of 52MW of geothermal energy from the Heber 1 facility to key utility partners, enhancing California's renewable energy landscape.
How does geothermal energy contribute to environmental goals?
Geothermal energy provides a carbon-free alternative to traditional energy sources, helping reduce greenhouse gas emissions while ensuring a stable energy supply.
In what ways does the agreement impact local communities?
This agreement supports the delivery of reliable social and economic benefits to millions by providing a steady supply of affordable and clean energy for local residents.
What does Ormat's business portfolio include?
Ormat Technologies operates a diverse portfolio that includes geothermal and REG power plants, as well as ongoing ventures in energy storage solutions across various global markets.
Why is this agreement beneficial for SCPPA members?
The agreement allows SCPPA members to continue delivering low-cost, renewable energy, supporting California’s ambitious clean energy goals and community needs.
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