- Ormat Technologies has launched Bottleneck, its largest energy storage project, in California’s Central Valley. The project features an 80MW/320MWh capacity and will supply energy services to SDG&E under a 15-year contract.
- The project maximises tax benefits, allowing Ormat to receive a 40% Investment Tax Credit (ITC), which enhances the company’s profit margins.
- With Bottleneck, Ormat aims to bolster its energy storage capacity to meet California’s ambitious clean energy goals while positioning itself as a leader in the renewable energy market.
Ormat Technologies Inc., a major renewable energy company, has begun commercial operations for its largest energy storage project, Bottleneck. This facility in California’s Central Valley boasts an 80MW/320MWh capacity. It will provide energy, capacity, and ancillary services to San Diego Gas & Electric (SDG&E) through a 15-year Power Purchase Agreement (PPA) signed in 2022.
The Bottleneck project maximises tax benefits for renewable energy installations. Due to its size and strategic location, Ormat expects to take advantage of a 40% Investment Tax Credit (ITC). This credit is an incentive for clean energy projects and will likely be monetised by the end of the year. This financial boost will positively impact Ormat’s profit margins.
“This project is a vital part of our growth strategy in California’s energy storage market,” said Ormat CEO Doron Blachar. He highlighted that Bottleneck aligns with the company’s goals of reaching a total capacity of 950MW to 1,050MW and 2.5GWh to 2.9GWh by 2028.
Ormat currently operates 270MW/638MWh of storage projects, with six additional projects under construction, adding another 355MW/920MWh capacity. This growth emphasises the importance of energy storage in transitioning to renewable energy. It helps stabilise production and offset fluctuations from sources like wind and solar.
Bottleneck provides Ormat with a steady revenue stream through its contract with SDG&E. This partnership supports California’s ambitious clean energy goals to reduce carbon emissions and develop sustainable solutions. The project will play a key role in achieving these objectives.
Blachar noted that Bottleneck directly supports California’s efforts to transform its energy infrastructure. The facility enhances the state’s reliance on renewable sources and storage. Increased energy storage allows for a flexible response to electricity demands, especially during peak periods or when traditional sources become unavailable.
Ormat strengthens its position in the global renewable energy market. The company enjoys recognition for its expertise in geothermal energy and increases its commitment to energy storage. Bottleneck marks a significant milestone in diversifying its energy assets. The project emphasises innovative solutions that contribute to a more resilient and cleaner power grid in the United States.
The successful launch of the Bottleneck project showcases Ormat’s ambition to improve profitability while contributing to national climate goals. By developing large-scale storage infrastructures, the company positions itself as a strategic partner for states and organisations. This role proves vital for optimising the use of renewable energy amid a global energy transition.
Projects like Bottleneck prove essential as the demand for renewable energy rises. They provide critical support for a cleaner energy future and help meet increasing electricity demands. Ormat’s investment in energy storage reflects a broader trend in the renewable sector, where companies seek to enhance their capabilities and offerings.
With Bottleneck, Ormat expands its portfolio while reinforcing its role in the renewable energy landscape. The project illustrates how energy storage can stabilise and support a more sustainable energy system. By investing in innovative solutions, Ormat paves the way for a greener, more resilient future in the energy sector.
As California pushes for cleaner energy solutions, Bottleneck stands ready to play a crucial role in this transformation. With strategic planning and execution, Ormat plans to impact the renewable energy market significantly. This project highlights the growing importance of energy storage in achieving long-term sustainability goals.