Ormat Technologies, Inc. (NYSE: ORA) announced that one of its subsidiaries has signed a 20-year power purchase agreement (PPA) with Nevada Power Company–a subsidiary of NV Energy (NYSE: NVE)–to purchase 30 megawatts (MW) from the McGinness Hills Geothermal project, which is currently under construction.
The PPA is subject to various approvals including the approval of the Public Utilities Commission of Nevada and is projected to come on line in 2012.
When completed, the McGinness Hills project will increase the total output supplied from Ormat to NV Energy, Inc. to approximately 135 MW, helping the utility to meet its renewable energy requirement. The renewable portfolio standard legislation requires 15% of all electricity generated in Nevada to be derived from new renewable energy sources by the end of 2012.
Dita Bronicki, CEO of Ormat said, “We have enjoyed a long and successful relationship with NV Energy and are grateful for its support of geothermal power. This PPA is further evidence that geothermal can supply a significant amount of power and is a preferable choice given its cost effectiveness, reliability and baseload nature.”
“Recent funding options and renewable legislation provide attractive alternatives for financing of new geothermal development,” Dita Bronicki, CEO of Ormat continued. “The McGinness project is expected to be eligible for ITC Cash grant or for PTC, and we also expect to apply for a DOE loan guaranty for its debt financing.”
The McGinness Hills project will consist of Ormat binary energy converters that re-inject the geothermal fluid produced. The project will not produce any environmentally harmful emissions while working continuously to provide power 24 hours per day, 7 days per week.
Ormat Technologies, Inc. is the only vertically-integrated company primarily engaged in the geothermal and recovered energy power business. The Company designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the Company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services.
In October, Ormat ventured into the solar business in Israel, forming a joint venture to produce 35 MW of power with Sunday Energy Ltd.
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