Geothermal power developer Ormat Technologies added more than 250 megawatts (MW) of new capacity last year while increasing revenues by 6.1% to about $880 million, the company reported on its quarterly earnings call Feb. 27.

The Nevada-based company partly attributed the growth to its acquisition last year of renewable energy assets from Enel Green Power North America. The $271 million deal included Enel’s entire geothermal portfolio and several small solar plants with a total capacity of about 150 MW of operating plants.

“This acquisition, coupled with a remarkable recovery and resource stability, ... enabled us to more than offset operational events and curtailments to deliver strong financial results and impressive adjusted EBITDA growth,” Ormat CEO Doron Blachar said.

Credit was also given to higher generation and pricing at its Puna geothermal plant in Hawaii; repowering at the Heber power plant in California; and new power purchase agreements with higher rates at its Bouillante, Heber and Mammoth geothermal plants, which Blachar said demonstrates strong geothermal demand being experienced in the U.S. and globally.

The company’s electricity segment curtailments mainly involved Ormat’s McGinness Hills complex, which was impacted by maintenance on a transmission line by the local grid operator, Ormat said.

Geothermal energy, which harnesses heat below ground using wells drilled into hot reservoirs, has been attracting attention lately as energy users seek out lower-carbon energy resources. The renewable energy source, unlike wind and solar, provides consistent electricity regardless of weather conditions.

Ormat aims to grow its installed capacity to up to 2.8 gigawatts (GW) by year-end 2028. Earlier in February, the company said it secured two 15-year tolling agreements for two energy storage facilities issued by the Israeli Electricity Authority and began commercial operations at the 35-MW Ijen geothermal power plant in Indonesia.

Other recent power moves included signing a 10-year power purchase agreement in January with Calpine Energy Solutions for up to 15 MW of geothermal capacity.

“We continue to remain on track with our portfolio capacity target range between 2.6 GW to 2.8 GW by year-end 2028. This year, we added 253 MW of new capacity with 133 MW in our electricity segments and 120 MW in energy storage,” Blachar said. “This aligns with our long-term capacity targets for 2028, and we expect it will strengthen our earnings generation in 2025 and beyond. We expect a capacity CAGR of 14% to 16%, primarily driven by the strong U.S. market where we see increasing demand for baseload electricity. Our focus remains on capturing this demand through our electricity and storage segments.”

Ormat has eight projects under development with a projected capacity of 102 MW. Blachar said the company has secured safe harbor for its U.S. geothermal projects until 2028 for production tax credit eligibility.

“These steps are crucial as we navigate the evolving landscape of executive orders related to the IRA [Inflation Reduction Act] tax credits and geothermal energy production,” he said.

U.S. President Donald Trump has been following through on plans targeting unspent funds made possible by former President Joe Biden’s signature climate law, which made billions of dollars available for lower carbon energy projects. Among Trump’s first acts upon returning to the White House in January was directing federal agencies to pause disbursement of funds appropriated via the IRA and the Infrastructure and Jobs Act.

The president, a strong backer of fossil fuels, has been critical of certain renewables—particularly wind. However, geothermal energy may be among favored energy sources of the current administration.

Geothermal heat was named as one of the energy sources listed in Trump’s executive order declaring a National Energy Emergency. Others included crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water and critical minerals.

The declaration seeks to promote the generation of such energy sources, while opening up new federal land, easing environmental restrictions and improving the permitting process.

“We do see exciting growth opportunities for geothermal energy as part of the National Energy Emergency Executive Order, with potential easing of project permitting timelines and increased focus on geothermal research and development,” Blachar said. “These factors, along with the growing global demand for renewable energy, reinforces our confidence in geothermal energy's role in the transition to a cleaner energy future.”

Like other energy companies, Ormat anticipates growing demand for renewable energy to support AI data centers. Blachar said the company is in negotiations for about 250 MW with hyperscalers with favorable conditions for new projects and expiring PPAs at rates exceeding $100 per megawatt-hours.

“We believe we can secure improved project returns through higher PPA pricing and tolling agreements, driving improved profitability for Ormat,” he said.

Adjusted EBITDA for fourth-quarter 2024 was $145.5 million, up 4.6% from a year earlier. Full-year EBITDA was $550 million, up 14.3%. Both beat analysts and Street expectations, according to a Feb. 27 note from Jefferies analysts.

“Given ORA’s track record of delivering toward the low end of guide and even missing, 4Q results were a positive, especially coupled with the reiteration on ‘28 capacity adds,” analysts said in the note.

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