Ormat Technologies Inc.
ORA announced that one of its wholly-owned subsidiaries has entered into a partnership agreement with a private investor. Notably, the subsidiary owns the 48-megawatt (MW) McGinness Hills Phase 3 Geothermal power plant. Per the deal, the private investor will pay $59.3 million for membership interest in this geothermal project.
Ormat will continue to operate and maintain the power plant, and will receive substantially all the distributable cash flow generated by the power plant. Conversely, the private investor will receive substantially all the tax attributes.
The third phase addition to the McGinness Hills geothermal plant complex increases the total capacity to 138 MW. This plant, which had started commercial operation on Dec 15, 2018, sells power under the 26-year Power Purchase Agreement with Southern California Public Power Authority. This Phase 3 Geothermal plant is expected to generate $30 million in annual revenues.
Ormat’s Expertise in Geothermal Space
Geothermal energy is a thermal energy that is generated and stored deep inside the earth’s crust. Ormat, with its expertise and technical knowledge, has developed geothermal solutions that are sustainable, virtually emission-free and ensure that facilities blend into natural surroundings.
Ormat has built more than 2,100 MWs of geothermal capacity in more than 150 geothermal power plants worldwide. Markedly, its geothermal plants are designed to harness power and increase the lifespan of their reservoirs by re-injecting 100% of all geothermal fluids.
Future of Geothermal
Since the quest of producing emission-free electricity is rising across the globe, geothermal energy can be an important source of producing clean energy via harnessing nature’s power. Per U.S. Energy Information Administration, at the end of 2018, there were geothermal power plants in seven states, which produced about 16.7 billion kilowatthours, equal to 0.4% of total U.S. utility-scale electricity generation.
Geothermal power projects are capital intensive but these plants have very low and predictable operating costs. High investments at an initial stage are a hindrance to the mass development of geothermal projects. However, per a finding from IRENA, the cost of installing geo-thermal plants will continue to drop over the next few decades, courtesy of technological developments.
Given bright prospects in the geothermal space, companies like Berkshire Hathaway Inc. BRK.A, General Electric Company GE and Halliburton Company HAL, among others, are carrying out investment to expand geothermal operations.
Zacks Rank & Price Performance
Ormat currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Shares of Ormat have outperformed its industry in the past 12 months.
It’s Illegal in 42 States, But Investors Will Make Billions Legally
In addition to the companies you read about above, today you get details on the newly-legalized
industry that’s tapping into a “habit” that Americans spend an estimated $150 billion on every year.
That’s twice as much as they spend on marijuana, legally or otherwise.
Zacks special report revealing how investors can profit from this new opportunity. As more states legalize this activity, the industry could expand by as much as 15X. Zacks’ has just released a Special Report revealing 5 top stocks to watch in this space.
See these 5 “sin stocks” now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
General Electric Company (GE) : Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.A) : Free Stock Analysis Report
Halliburton Company (HAL) : Free Stock Analysis Report
Ormat Technologies, Inc. (ORA) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research