Ormat Technologies (NYSE:ORA) confirmed it has signed a long-term agreement to supply up to 150 megawatts of geothermal power to support Google’s data center operations in Nevada.
The Reno-based renewable energy company announced Tuesday (February 17) that it entered into a portfolio power purchase agreement (PPA) with NV Energy, the Berkshire Hathaway-owned utility serving Nevada. The electricity will ultimately support Alphabet’s (NASDAQ:GOOGL) Google under NV Energy’s Clean Transition Tariff framework.
Under the terms of the deal, Ormat will develop a series of new geothermal projects across Nevada capable of delivering up to 150 MW of capacity. The projects are expected to come online between 2028 and 2030.
The contract term will begin once the first project achieves commercial operation and will extend 15 years beyond the commercial operation date of the final project, creating a long-duration revenue stream.
The structure allows projects to be added to the portfolio as they reach commercial operation, giving Ormat flexibility in staging development while providing Google with a scalable source of clean, around-the-clock electricity.
“AI is fundamentally increasing electricity demand across the technology sector, and geothermal power is uniquely positioned to deliver the reliable, carbon-free power required to support that growth,” said Ormat CEO Doron Blachar.
“This portfolio PPA provides long-term profitable revenue growth and clear visibility into our portfolio development plans, while solidifying our conviction in the expanded exploration and drilling activities we have undertaken over the past several years that laid the groundwork for securing this significant agreement and others like it.”
Blachar added that the agreement, combined with the extension of geothermal tax credits under the OBBBA framework, strengthens Ormat’s ability to execute its long-term growth strategy.
“The momentum of the Clean Transition Tariff through this agreement with NV Energy, Google and Ormat demonstrates a proven, scalable model for large customers to partner with utilities and technology providers to bring new clean capacity to the grid,” said Briana Kobor, Google’s Head of Energy Market Innovation.
The Clean Transition Tariff enables large energy users to procure new clean generation while covering the full costs of their electric service, a structure designed to prevent cost shifts to other customers.
Ormat said the framework could be replicated in other US electricity markets.
The announcement was well received by investors. Ormat shares rose as much as 8.1 percent intraday, marking the company’s largest single-day gain since 2023.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.