Ormat wins contract for San Jacinto geothermal plant expansion

San Jacinto-Tizate geothermal plant, Nicaragua (source: PowerEngineers)

Alexander Richter 5 Aug 2021

Polaris Infrastructure Inc. announced today that it has signed a definitive agreement with a wholly subsidiary of Ormat Technologies Inc. (NYSE: ORA) for the supply of a 10 MW (net) Binary Unit at its San Jacinto geothermal power plant in Nicaragua . The additional Binary Unit is in response to Polaris’ previously announced December 2020 extension of the Power Purchase Agreement in Nicaragua, which extended its term to 2039, and allowed for additional capacity through the inclusion of a Binary Unit.

The Agreement with Ormat, calls for Polaris to purchase equipment for the construction, commissioning and operation of a geothermal binary power plant (Organic Rankine Cycle) at the San Jacinto Geothermal Project in Telica, Leon, Republic of Nicaragua.

Ormat has an excellent reputation in the design, supply, service supervision and warranty of such equipment installations, having constructed such facilities for over 55 years. Ormat’s power plants have been supplying clean, reliable, cost effective and sustainable electricity to power grids on five continents, from Iceland to New Zealand, from Canada to The Andes, and from Hawaii to Japan.

Polaris anticipates a 15-18 month design, manufacture, delivery and installation of the Binary Unit with a current projected operation date of early Q1-2023.  Based on this supply contract, Polaris has budgeted a total project cost of approximately $25 million to bring the project online and expects to fund such costs with current cash on hand.

Marc Murnaghan, Polaris’ CEO commented “We are very happy to move forward with this project, which has resulted in a capacity at the top end of our initial range, and with a very competitive overall budget.  Adding a Binary Unit to the San Jacinto plant is a natural part of the evolution of the project, as it will more fully take advantage of the energy from the resource and provide even more stability to the generation and cash flows for the years to come.  We are also very excited to be working with a company such as Ormat to take this important step for the Company.”

Ormat anticipates an 11-month design, manufacture, and delivery of the OEC unit.

Doron Blachar, CEO of Ormat Technologies, said, “This contract expands our backlog and provides further evidence of the increase in the demand for our products after the slowdown we have experienced over the last year, mainly related to COVID. Demand for clean, renewable energy continues and Geothermal remains attractive as a baseload option. As a recognized leader in geothermal we expect to recognize increased interest from partners and operators around the world.”

In a statement in Ormat’s press release Marc Murnaghan, Polaris’ CEO commented, “Adding this Binary Unit will help us expand the capacity of the resource, taking full advantage of the potential energy from the resource. This will enable us to meet the demand of the extended PPA, providing clean, renewable, and affordable electricity to the citizens of Nicaragua and increasing cash flows for the years to come. Ormat has a proven reputation, supplying clean, reliable, cost effective and sustainable electricity for more than 55 years to power grids on five continents.”
Source: Company release

Note: This article has been updated on August 12, 2021 following details shared by Ormat in a press release on August 11, 2021.