In a significant move towards sustainable energy solutions, Ormat Technologies, Inc. (NYSE: ORA), a leading player in the renewable energy sector, has officially inked a 15-year Energy Storage Service Agreement (ESSA) with San Diego Community Power (SDCP), California’s second-largest community choice aggregator. The agreement pertains to the 20MW/40MWh Pomona 2 Battery Energy Storage System (BESS), strategically positioned in Los Angeles County, California.
Having been operational since July 2023, the Pomona 2 project underscores Ormat’s unwavering commitment to expanding its energy storage capabilities by delivering innovative solutions and storage services. Notably, this marks the second tolling agreement within Ormat’s expanding portfolio, building upon the earlier 2022 Bottleneck contract. These agreements play a pivotal role in fostering a stable, profitable, and predictable revenue stream for Ormat’s energy storage segment, with over 40% of the segment’s revenue anticipated to be contracted from the second half of 2024 onwards.
Doron Blachar, the CEO of Ormat Technologies, expressed enthusiasm about the long-term tolling agreement, stating, “This long-term tolling agreement further expands Ormat’s energy storage portfolio and supports SDCP’s commitment to bringing clean, reliable energy to its nearly one million customers. The Pomona 2 project will help to balance our merchant portfolio and support more stable and profitable revenues for the storage segment. We continue to view energy storage as a unique, multi-year growth sector that will play a vital role in global decarbonization as intermittent renewable energy sources continue to be deployed as part of the ongoing energy transition. Ormat is committed to growing its energy storage portfolio and capabilities by utilizing our market position and expertise, and we are proud to expand our presence in California with this second agreement signed with SDCP. We view California as a key target market for renewable energy development, and are proud to be part of the solution in addressing the state’s net-zero goals.”
