In Reno, Nevada, Ormat Technologies Inc., a renewable energy corporation, announced the commencement of commercial operations at its largest energy storage facility, the Bottleneck project. This facility, an 80MW/320MWh Battery Energy Storage System, is located in California’s Central Valley and will supply energy to San Diego Gas & Electric under a 15-year Power Purchase Agreement.
The Bottleneck project began operations on Monday and is expected to be eligible for a 40% Investment Tax Credit, which the company plans to optimize by the end of 2024. This initiative forms part of Ormat’s plan to expand its Energy Storage division in the considerable California energy market.
Doron Blachar, CEO of Ormat Technologies, expressed contentment with the project’s launch, underscoring the company’s dedication to enhancing its energy storage portfolio in key U.S. markets. Blachar noted that the Bottleneck project enhances long-term contracted revenues and improves margins for the Storage segment of the company.
Currently, Ormat Technologies manages 270MW/638MWh of storage projects, and has six additional projects under development totaling 355MW/920MWh. The company aims to reach a portfolio capacity of 950MW-1050MW/2.5GWh-2.9GWh by 2028.
With over five decades of experience, Ormat is the sole vertically integrated company involved in geothermal and recovered energy generation, and it is expanding into energy storage services, solar photovoltaic, and energy storage with solar PV. Ormat’s total generating portfolio stands at 1,500MW, comprising geothermal, solar generation, and energy storage across the U.S. and internationally.
Ormat’s forward-looking statements in the press release outline projections and expectations for future operations, encompassing annual revenues, expenses, and business strategy, subject to risks and uncertainties as detailed in filings with the Securities and Exchange Commission.
The launch of the Bottleneck project aligns with California’s clean energy objectives as the state pursues sustainable energy solutions. This information is sourced from a press release by Ormat Technologies.
In other recent developments, Ormat Technologies has posted significant financial growth, with revenues increasing by 21%, earnings per diluted share rising by 25.5%, and a 14.4% growth in adjusted EBITDA. The company has also issued $45.2 million in 2.50% Convertible Senior Notes due 2027 and adjusted its CapEx budget for 2024 to $550 million to $570 million in response to increased demand for storage projects. Strategically, Ormat has entered two seven-year tolling agreements with Equilibrium Energy for energy storage facilities in Texas, marking its entry into the ERCOT market. These agreements have facilitated the start of the 100MW/200MWh Louisa project, anticipated to be operational by the end of 2026.
Additionally, Ormat has signed a 15-year agreement with the City of Riverside, furthering its presence in the energy storage market. This deal concerns Ormat’s 80MW/320MWh Shirk Battery Energy Storage System in Visalia, California. From an analyst perspective, Roth/MKM has raised its price target for Ormat Technologies shares to $87.00 from $80.00, maintaining a Buy rating, while Oppenheimer adjusted its price target to $85.00, keeping an Outperform rating.
InvestingPro Insights indicate that Ormat Technologies’ launch of its largest energy storage facility aligns well with its financial performance and market stance. Based on InvestingPro data, the company experienced a revenue growth of 16.43% over the last twelve months as of Q2 2024, reflective of its expanding operations in the renewable energy sector. This growth is supported by a robust EBITDA of $431.97 million for the same period.
According to InvestingPro Tips, Ormat is trading at a low price-to-earnings ratio relative to its near-term earnings growth, with a PEG ratio of 0.88. This suggests potential undervaluation of the stock, considering its growth prospects bolstered by projects like the Bottleneck facility.
Furthermore, Ormat has consistently paid dividends for 20 consecutive years, showcasing financial stability and a commitment to shareholder returns, a significant feat given the resource-heavy nature of renewable energy projects.
The company’s strategic expansion in the energy storage segment is demonstrated by its robust market performance, with a 25.39% price total return over the past six months, aligning with the InvestingPro Tip of a notable price increase during this period.
For investors seeking more detailed analysis, InvestingPro provides additional insights into Ormat Technologies’ financial health and market position.
This article was generated with AI assistance and reviewed by an editor.