Ormat Technologies, Inc.
ORA
recently announced that its 5-megawatt (MW)/20 megawatt-hour (MWh) Tierra Buena Battery Energy Storage System (“BESS”) facility in California has commenced its operations. With this facility in operation, Ormat finally excels in taking its portfolio of energy storage to 88 MW/196 MWh. This, in turn, should boost ORA’s revenue generation prospects through the next-generation source of energy.
Details of the Facility
The BESS facility, which is expected to be earnings accretive for the company from the onset of July 2022, aims to offer local resource adequacy under 10-year agreements to two Community Choice Aggregators, namely Redwood Coast Energy Authority and Valley Clean Energy, comprising 2.5 MW each.
Also, the facility will offer ancillary services and energy optimization facilities through participation in merchant markets run by the California Independent System Operator.
Against this backdrop, it can be said that Ormat continuously strives to use its capabilities to provide the best-in-class projects for its customers and use its efficiency for proper grid performance and reliability. Hence, such an emphasis has enabled the company to open its third operating BESS facility in California.
Ormat’s Battery Storage Strategies
Ormat is expanding its dominion in Energy Storage. In 2021, the company commissioned one energy storage facility with a total of 10MW/40MWh in California and started the development and construction of six energy storage projects with a total capacity of 89 MW/124 MWh in California, Texas, New Jersey and Ohio.
The company aims to enhance its current 83 MW portfolio of energy storage by an additional 230 to 290 MW or 550 to 660 MWh by year-end 2023. This addition will enable Ormat to reach a total storage portfolio of 313 to 373 MW by 2023.
Such initiatives will enable ORA to boost its long-term growth in the Energy Storage segment market, thus allowing it to establish a leading position in the U.S. energy storage market.
U.S. Battery Energy Storage System Market Boom
The rapidly increasing clean energy adoption is providing an edge for alternate energy companies to expand their footprint in the battery energy storage market. Per the Grand View Research, the U.S. battery energy storage system market is expected to witness a CAGR of 23.9% from 2020 to 2027.
Such growth projections provide substantial growth opportunities for companies like Ormat. A few alternate energy companies that may enjoy the perks of the expanding battery energy storage market are
Ameresco
AMRC
,
Fluence Energy
FLNC
and
Brookfield Renewable
BEPC
.
In May 2022, Ameresco announced that it signed a long-term non-exclusive purchasing framework agreement for Powin to supply Ameresco with 2,500 MWh of its modular battery energy storage system Stack750 product as part of its Centipede hardware platform.
Amerescoboasts a long-term earnings growth rate of 25.1%. The Zacks Consensus Estimate for AMRC’s 2022 sales indicates a growth rate of 53.3% from the prior-year reported figure.
In April 2022, Fluence Energy announced that it and TECO Group had been awarded the 60 MW battery-based energy storage system for Taiwan Power Company’s Taoyuan Longtan ultra-high voltage substation.
The Zacks Consensus Estimate for Fluence Energy’s 2022 sales indicates a growth rate of 66.3% from the prior-year reported figure. FLNC shares have appreciated 3.3% in the past month.
In January 2022, Brookfield Renewable announced the acquisition of the clean power developer, Urban Grid, and its high-quality pipeline of projects comprising approximately 13,000 MW of utility-scale solar and 7,000 MW of energy storage capacity for $650 million.
The Zacks Consensus Estimate for Brookfield’s 2022 sales indicates a growth rate of 12.3% from the prior-year reported figure. The Zacks Consensus Estimate for BEPC’s 2022 earnings suggests a growth rate of 37.7% from the prior-year reported figure.
Price Performance
In the past year, shares of Ormat have surged 8% against the
industry
’s decline of 11.2%.
Image Source: Zacks Investment Research
Zacks Rank
Ormat currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
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