Ormat is starting to work on the big energy storage space with Investing.com
RENO, Nev. – The company Ormat Technologies Inc . (NYSE: NYSE:), a renewable energy company, announced today the start of commercial operations at its largest energy storage facility, the Bottleneck project. The facility, an 80MW/320MWh Battery Energy Storage System (BESS), is located in California's Central Valley and will supply San Diego Gas & Electric (SDG&E) under a 15-year Power Purchase Agreement.
The Bottleneck project, which began operations on Monday, is expected to qualify for a 40% Investment Tax Credit, which the company aims to benefit from by the end of 2024. This development is part of Ormat's strategy to grow the Energy Storage segment internally. important California energy market.
Doron Blachar, CEO of Ormat Technologies, expressed satisfaction with the implementation of this project, emphasizing the company's commitment to expanding its energy storage portfolio in strategic American markets. Blachar emphasized that the Bottleneck project is contributing to long-term contract revenue and improved margins for the company's Storage segment.
Ormat Technologies now operates 270MW/638MWh of storage projects, with six additional projects under construction, totaling 355MW/920MWh. These efforts are in line with the company's goal of achieving a portfolio capacity of 950MW-1050MW/2.5GWh-2.9GWh by 2028.
This company, with more than 50 years of experience, is the only directly incorporated company involved in the production of energy from geothermal energy (REG), and expands into energy storage facilities, Solar Photovoltaic (PV), and energy storage and Solar PV . Ormat's current generating portfolio is 1,500MW, which includes geothermal and solar generation and energy storage, spread across the US and internationally.
Ormat's forward-looking statements in the press release reflect assumptions and expectations of future operations, including annual revenues, costs, and business strategies. These statements are subject to risks and uncertainties, as described in Ormat's filing with the Securities and Exchange Commission.
Implementation of the Bottleneck project is consistent with California's clean energy goals, as the state moves toward sustainable energy solutions. This information is based on a press release from Ormat Technologies.
In other recent news, Ormat Technologies reported significant financial growth, with revenue up 21%, earnings per diluted share up 25.5%, and a 14.4% increase in adjusted EBITDA. The company also issued an additional $45.2 million in 2.50% Convertible Senior Notes due 2027 and revised its 2024 CapEx budget to $550 million to $570 million due to increased demand for storage projects. In terms of strategic developments, Ormat has entered into seven-year tariff agreements with Equilibrium Energy for energy storage facilities in Texas, marking its first entry into the ERCOT market. These agreements, which guarantee a fixed profit, have facilitated the implementation of the 100MW/200MWh Louisa project, which is expected to be operational by the end of 2026.
In addition, Ormat has entered into a 15-year agreement with the City of Riverside, expanding its position in the energy storage market. The agreement relates to Ormat's 80MW/320MWh Shirk Battery Energy Storage System in Visalia, California. On the analyst front, Roth/MKM raised their price target on shares of Ormat Technologies to $87.00, from their previous target of $80.00, while maintaining a buy rating on the stock. Despite the downward revision of near-term EPS forecasts, the firm maintains a positive outlook on Ormat's future, supported by the expectation of continued growth in demand for renewable energy. Oppenheimer also adjusted their price target on shares of Ormat Technologies to $85.00, maintaining an Outperform rating.
InvestingPro Insights
Ormat Technologies' launch of its largest energy storage facility is in line with its financial performance and market position. According to InvestingPro data, the company's revenue growth stood at 16.43% in the last twelve months from Q2 2024, reflecting the growth of its activities in the renewable energy sector. This growth is also supported by a strong EBITDA of $431.97 million during the same period.
InvestingPro Tips highlights that Ormat trades at a low P/E ratio relative to its near-term growth, with a PEG ratio of 0.88. This suggests that the stock may be undervalued given its growth potential, which could be bolstered by projects like the Bottleneck facility.
Additionally, Ormat has maintained dividend payments for 20 consecutive years, demonstrating its financial stability and commitment to shareholder returns. This is particularly noteworthy given the capital intensive nature of renewable energy projects.
The company's strategic expansion in the energy storage segment is reflected in its strong market performance, with a total price gain of 25.39% over the past six months. This is in line with InvestingPro's tip showing the biggest price increase in the last six months.
For investors looking for a more comprehensive analysis, InvestingPro offers 7 additional tips on Ormat Technologies, which provide in-depth information about the company's financial health and market conditions.
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