Ormat signs 150 MW PPA with NV Energy to supply Google data center in Nevada
Who: Reno-based renewable energy company Ormat Technologies and NV Energy.
What: A long-term portfolio power purchase agreement (PPA) for up to 150 MW of geothermal electricity to support Google’s data center operations in Nevada.
When: The companies announced the deal on February 17, .
Where: The transaction is structured under NV Energy’s Clean Transition Tariff (CTT), which applies to Nevada utility service.
Why: The arrangement aims to provide reliable, round-the-clock low-carbon power for large loads that require continuous energy supply. From an ESG perspective, the deal highlights geothermal’s role as a baseload resource compatible with corporate clean energy targets.
Sustainability is a business case when firms need dependable low-carbon power and price certainty. The CTT allows large customers to procure new clean generation while maintaining full utility service cost coverage.
Leading companies have understood that predictable, firm clean power supports both operational resilience and decarbonization goals. For investors, the PPA signals growing commercial acceptance of geothermal as an industrial-scale solution.
Early details indicate the supply will feed Google’s Nevada data center portfolio through NV Energy’s transmission arrangements. Further commercial and financial terms, including contract length and delivery profile, were not disclosed in the announcement.
Ormat will design, build, own and operate a series of new geothermal projects across Nevada. The company will add each facility to the portfolio as it reaches commercial operation. The projects are scheduled to come online in phases beginning in and continuing through 2030. The power purchase agreement term begins at the commercial operation date of the first project and extends for 15 years beyond the commercial operation date of the final project. Investors reacted positively to the announcement, pushing Ormat’s shares higher.
How the portfolio PPA and the Clean Transition Tariff work
A portfolio PPA groups multiple generation assets under a single contract. That structure allows staggered commissioning while preserving an It also spreads construction and operational risk across several projects. From an ESG perspective, a portfolio approach can strengthen traceability of renewable generation and improve the buyer’s scope 2 accounting.
The Clean Transition Tariff functions as a commercial mechanism to smooth revenue for projects that come online at different times. By aligning tariff payments across the portfolio, it can reduce short-term price volatility and support investment-grade cashflow projections. Sustainability is a business case: predictable offtake and tariff design can lower financing costs for capital-intensive technologies such as geothermal.
For developers and offtakers, the practical advantages include simplified contracting and coordinated interconnection planning. From an investor viewpoint, the combined structure enhances bankability by linking asset performance to a single counterparty and a defined tariff framework. Leading companies have understood that pairing robust contracting with clear tariff mechanisms helps convert long-term climate commitments into investable projects.
Ormat and Google structured the deal around a portfolio PPA, which allows multiple generating assets to join a single contract as they become operational. This model gives Ormat development flexibility and provides Google with a scalable source of reliable energy. The customer transfer tariff (CTT) is central to the arrangement. As a contractual mechanism between a utility and a large customer, the tariff lets Google source newly built clean capacity while the utility preserves system reliability and cost allocation. In practice, the CTT protects other ratepayers from bearing the incremental costs tied to new generation procured for a single large customer.
Why geothermal is strategic for tech-driven demand
Geothermal offers continuous, baseload power that aligns with the 24/7 operational profiles of major data centres. For companies seeking to reduce emissions across their value chain, that reliability is as important as low carbon intensity. Sustainability is a business case when power supply matches load profiles without relying on large storage buffers.
From an ESG perspective, geothermal lowers exposure to volatile fuel markets and reduces scope 2 emission risk for large off-takers. It also simplifies procurement: firm capacity from a single technology reduces the need for complex stacking of contracts and mitigation instruments. Leading companies have understood that pairing long-term contracting with tariff clarity converts climate commitments into investable projects.
Implementation requires pragmatic steps. Developers should size portfolios to match offtaker load profiles and phase projects to align commercial operations with contractual milestones. Utilities must design CTT-style mechanisms that allocate costs transparently and preserve grid reliability. From a procurement standpoint, buyers should include clauses that address resource performance, curtailment risk and long-term asset management.
Ormat’s approach illustrates this path. Adding plants to a portfolio as they reach commercial operation spreads development risk and accelerates delivery to the buyer. For investors, the model creates predictable cash flows tied to a large, creditworthy corporate counterparty and a tariff framework that limits regulatory risk.
Practical metrics for assessment include expected capacity factor, levelized cost of energy, and the treatment of emissions across scope 1-2-3. Project-level life cycle assessments and clear contractual allocations of operational risks improve bankability and investor confidence.
Next steps for markets pursuing similar deals include wider adoption of standardised tariff templates, development of pipeline aggregation tools, and closer alignment between corporate procurement teams and utility planners. These measures can accelerate the translation of corporate climate targets into concrete geothermal capacity additions.
Building on the previous discussion, executives said the deal aligns geothermal’s technical profile with rising power needs from cloud and AI services. Ormat CEO Doron Blachar said AI is driving sustained increases in electricity demand across the technology sector. He added that geothermal is uniquely suited to supply continuous, carbon-free baseload capacity.
Geothermal plants provide steady output independent of weather. That reliability offers a clear advantage over intermittent sources for facilities such as data centers that require predictable, always-on power. From an ESG perspective, continuous low‑carbon supply helps firms meet operational resilience and climate targets without relying on storage or backup fossil generation.
Long-duration revenue and development visibility
Portfolio power purchase agreements create long-duration revenue streams that improve project bankability. By aggregating multiple assets under a single contract, developers gain predictable cashflows as sites come online. Investors and lenders therefore obtain clearer revenue visibility across multi‑stage development pipelines.
Sustainability is a business case: steady off‑takers and extended contracts lower financing costs and accelerate permitting and construction. Leading companies have understood that this combination of reliable demand and contractual tenure makes geothermal an attractive play for institutional capital seeking low‑carbon infrastructure with stable returns.
Practical implementation depends on aligning contracting timelines with staged commissioning and securing offtake commitments from hyperscalers and utilities. These arrangements can translate corporate climate targets into concrete geothermal capacity additions and strengthen the investment case for further development.
Market implications and replicability
The PPA structure provides the company with a long-duration, asset-linked revenue stream that begins when the first project reaches commercial operation and runs for 15 years after the final plant starts up. This model increases financial predictability and supports staggered construction across multiple sites. Geothermal tax incentives under recent federal policy also improved project economics, enhancing the capacity to execute large-scale expansion.
For investors, the arrangement reduces cash-flow volatility and clarifies project timing. Lower revenue uncertainty can translate into cheaper capital and stronger valuation support for developers. From an ESG perspective, the contract ties emissions reductions to discrete capacity additions, making corporate climate targets easier to verify.
Can the model be replicated by other developers? Yes, but replication depends on several practical conditions: control of the underlying assets, a creditworthy offtaker or corporate purchaser, secure grid interconnection, and stable policy frameworks for tax and incentive treatment. Projects lacking one of these elements will face higher execution and financing risk.
Sustainability is a business case: structuring long-term offtake, aligning construction schedules, and capturing available incentives turns environmental commitments into bankable projects. Leading companies have understood that integrating lifecycle assessment and circular design into project planning can further lower operating costs and reputational risk.
Implementation steps for developers include negotiating staged PPAs, documenting expected scope 1-2-3 emissions outcomes, and locking in tax credit eligibility early in the permitting process. These measures improve bankability and attract corporate buyers seeking durable clean power solutions.
Market watchers say the approach could widen access to capital for multi-site geothermal builds and encourage similar long-duration contracts in other renewables. The likely next developments are broader adoption among institutional buyers and tighter alignment between incentive policy and project timelines.
Agreement seen as a replicable model for expanding clean capacity
Google’s head of energy market innovation, Briana Kobor, described the deal as a model that could be replicated across the United States. She said the structure enables large customers, utilities and developers to coordinate on adding new clean capacity while managing costs for nonparticipants.
The arrangement pairs a utility tariff mechanism with a developer-managed portfolio power purchase agreement. That combination, Kobor said, could help bring more clean-firm resources online without shifting undue risk to other ratepayers. The PPA remains subject to regulatory approval by the Public Utilities Commission of Nevada (PUCN), a routine step for agreements tied to tariff mechanisms.
From an ESG perspective, this structure strengthens the business case for long-duration, asset-linked revenue streams. Sustainability is a business case, and the model aligns commercial incentives with grid reliability needs. Leading companies have understood that blended approaches can accelerate capacity additions while preserving regulatory safeguards.
Market watchers expect wider adoption among institutional buyers and closer coordination between incentive policy and project timelines as the next likely developments. Those shifts could accelerate deployment of similar deals in other U.S. markets and improve alignment between private contracting and public oversight.
From an investor perspective, the deal increases Ormat’s visibility into future growth and revenue while reinforcing Nevada’s role as a center for geothermal expansion. The phased delivery timeline—projects online between and 2030—gives market participants time to plan grid integration and operations. For Google, securing access to dedicated clean capacity aligns with corporate objectives for decarbonization and resilience at scale.
Operational and policy context
From an ESG perspective, the agreement creates clearer signals for capital allocation and operational planning. Sustainability is a business case: predictable offtake and staged commissioning reduce market and execution risk for developers and financiers.
Operationally, staggered project bring-ups allow utilities and system operators to coordinate interconnection, dispatch protocols and ancillary services procurement. That phasing also eases supply-chain pressure for equipment and specialist crews, lowering schedule and cost risk.
On the policy side, the structure supports alignment between private contracting and public oversight. It gives regulators and grid planners time to adapt permitting processes and transmission studies without abrupt system impacts. It also facilitates layered risk management for investors evaluating scope 1-2-3 emissions and long-term revenue streams.
For young investors assessing the opportunity, the business case is tangible. Staged delivery improves cash-flow visibility and de-risks early-stage capital. From a practical implementation standpoint, companies should prioritise robust power purchase agreement terms, clear milestones for commissioning and contractual remedies for delays.
Leading companies have understood that integrating project timelines with grid readiness enhances project bankability. The –2030 rollout window therefore matters both for operational sequencing and for translating policy support into investable assets.
The –2030 rollout window therefore matters both for operational sequencing and for translating policy support into investable assets. Ormat will develop and operate each geothermal facility joining the portfolio. The company will supply energy to NV Energy under the agreed PPA terms.
The portfolio approach, paired with the CTT structure, is designed to be bankable for developers and acceptable to utilities that manage grid costs. From an ESG perspective, the arrangement aims to reconcile utility risk management with long-term clean capacity investment.
Announced on February 17, , the Ormat–NV Energy portfolio PPA positions geothermal as a realistic option for large technology purchasers seeking dependable, low‑carbon electricity. Sustainability is a business case when staged project delivery, long‑term contractual coverage and tariff‑based cost allocation reduce offtaker and developer uncertainty.
Practical implementation will require transparent delivery milestones, robust measurement of dispatchable performance and clear tariff rules that reflect system value. Leading companies have understood that aligning procurement timelines with grid planning unlocks commercial scale. Expect permitting progress, financing rounds and early construction starts to determine whether the model scales beyond Nevada.