Ormat signs 20-year PPA for 36MW expansion of geothermal complex in Kenya

Source: Ormat Technologies, Inc.

Ormat Technologies, Inc. (NYSE: ORA) announced that its subsidiary, OrPower 4, Inc., signed a 20-year power purchase agreement (PPA) amendment with Kenya Power and Lighting Company Limited (KPLC) to purchase an additional 36-megawatts (MW) of geothermal energy output from a new power plant at the Olkaria complex. The new plant will be constructed adjacent to the existing 48MW Olkaria III geothermal power plant near Lake Naivasha, Kenya. The new power plant is scheduled to come online in 2013. 

The PPA amendment includes an option to increase the combined 84MW capacity from the new and existing plants to up to 100 MWs subject to monitoring and assessment of the geothermal reservoir capacity. Ormat built the first 48 MW plant in three stages in parallel to the resource development, allowing the Company to advance revenue generation and long-term resource testing at commercial conditions. The first stage commenced in August 2000 with 8MW and was developed as part of the initial appraisal of the Olkaria III reservoir. This was followed by commercial well drilling and construction of a second and third stage to reach the 48MW target capacity, which was achieved in January 2009. 

“Gradual development of a geothermal resource reduces a number of risks as data is continuously refined while the process moves forward. Using this phased approach, a power plant’s final design and future drilling programs are based on reliable resource data derived from long-term and on-going operation of the geothermal wells at commercial conditions rather than the short term tests that are customary in the geothermal industry.” said Dita Bronicki, Chief Executive Officer of Ormat. “Ormat continues to believe in Kenya’s economy and is proud to have the opportunity to expand Olkaria III by additional 36 MW. Our accomplishments in Kenya have been achieved through the hard work and dedication of our plant’s operation team that has consisted entirely of skilled local employees, managed by Eng. Ernest S. Mabwa, since the complex’s earliest stages.” 

The first plant has been in continuous operation since 2000 and has achieved very high availability factors. Similar to the technology used in the existing plant, the new plant will utilize Ormat’s air cooled technology, which does not consume any water.

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