Ormat and local utility share details on new PPA for geothermal plant in Hawaii
Puna Geothermal Ventures (subsidiary of Ormat) plans to replace ten older units of its Puna geothermal plant in Hawaii with two new ones. With that it will increase the capacity of the plant by 8 MW to total of 46 MW, while utilising the same steam as the previous set up.
In a release today, Ormat Technologies, Inc.announced that its subsidiary, Puna Geothermal Venture (PGV), and Hawaiian Electric’s Hawaii Electric Light subsidiary have reached an agreement on an amended and restated power purchase agreement (PPA) for dispatchable geothermal power sold from Ormat’s Puna complex, located on the Big Island of Hawai’i.
The new PPA extends the term until 2052 with an increased contract capacity of 46MW and a fixed price of $70.00/MWh with no escalation, regardless of changes to fossil fuel pricing. The amended PPA was filed with the Public Utilities Commission (PUC) on December 31, 2019 for its review and approval, which is anticipated during 2020.
Ormat is planning to replace ten 25-year-old steam units with two new Ormat binary units and to upgrade the existing auxiliary equipment. This upgraded facility will utilize the same amount of geothermal resource that the existing 38 MW facility requires. The modern equipment, with increased efficiency, will increase the Puna complex generating capacity by 8 MW to a total of 46 MW and will significantly reduce the operating costs. The commercial operation date (COD) of the new plant is expected during the first half of 2022. The existing PPA remains in effect, with current terms, until the expansion is completed, and the new plant reaches its COD.
The 38 MW Puna power plant has been shut down since the volcanic eruption and we are on track to bring it to full capacity by the end of the second quarter of 2020.
“Ormat’s reconstruction efforts to bring the 38MW complex back to operation are underway, and we continue our geothermal field recovery work. We expect to be able to sell the electricity produced at PGV as soon as we receive the relevant permits required from local authorities,” commented Isaac Angel, Ormat’s Chief Executive Officer. “According to the amended PPA, we expect the total revenue from energy and capacity payments, including the new 8 MW generating capacity, to be approximately 5 to 7% higher than the prior levels before the eruption.”
“We are proud to partner with Hawaiian Electric and enable Hawai’i’s commitment to clean energy and reducing greenhouse gas emissions. As Hawai’i continues to pursue the goal of achieving 100% of its electricity generation from renewable sources, PGV is an increasingly critical source of renewable energy and capacity, unaffected by volatile fossil fuel pricing, in this region,” said Mr. Angel.
“For nearly 30 years, Puna Geothermal has been an important resource that has enabled Hawaii Island to significantly reduce its dependence on imported fossil fuels,” said Sharon Suzuki, president of Hawaiian Electric’s Maui County and Hawai‘i Island utilities. “We appreciate the willingness of the Ormat team to work with us on an amended contract that benefits customers and accelerates our transition to 100 percent renewable energy.”
Source: Ormat press release by email