Ormat Technologies Inc., a major player in renewable energy based in Reno, Nevada, announces the start of commercial operations for its largest energy storage project, named Bottleneck. Located in California’s Central Valley, this 80MW/320MWh facility will provide energy, capacity, and ancillary services to San Diego Gas & Electric (SDG&E) through a Power Purchase Agreement (PPA), signed in 2022 for a fifteen-year term.
The Bottleneck project was also designed to maximize available tax benefits for renewable energy installations. Due to its size and strategic location, Ormat expects to benefit from a 40% Investment Tax Credit (ITC), an incentive for clean energy projects. This credit is expected to be monetized by the end of the year, directly contributing to the company’s profit margins.
A Growth Strategy in the Energy Storage Market
For Ormat, the Bottleneck project represents a significant step in its growth strategy for the energy storage segment in the California market, a crucial market for renewable energy development in the United States. According to Doron Blachar, Ormat’s CEO, this installation aligns with the company’s goal of reaching a total capacity of 950MW-1050MW and 2.5GWh-2.9GWh by 2028.
Ormat currently operates 270MW/638MWh of storage projects, with an additional six projects under construction, representing an additional capacity of 355MW/920MWh. This expansion highlights the importance of energy storage in the energy transition, stabilizing production and compensating for fluctuations from renewable sources such as wind and solar.
Long-Term Support for California
The Bottleneck project provides Ormat with stable, contractual revenue through the 15-year contract signed with SDG&E, a partnership that also strengthens California’s ability to achieve its ambitious clean energy goals. The state aims to progressively reduce its carbon emissions and develop sustainable energy solutions.
Blachar adds that this project directly supports California’s ambitions to transform its energy infrastructure toward reliable renewable sources and storage. Energy storage, combined with increased renewable production, enables a more flexible response to electricity needs, especially during peak demand periods or when traditional sources are less available.
Ormat’s Role in the Global Renewable Energy Market
Ormat continues to consolidate its position in the global renewable energy market, with recognized expertise in geothermal energy and a growing commitment to energy storage. This Bottleneck project marks a further milestone in the diversification of the company’s energy assets, emphasizing innovative solutions that support the evolution toward a more resilient and cleaner power grid in the United States.
The success of this energy storage installation in California not only illustrates Ormat’s ambition to improve its profitability but also its active role in achieving national climate goals. By developing robust and large-scale storage infrastructures, the company positions itself as a strategic partner for states and companies seeking to optimize the use of renewable energy in the context of a global energy transition.
