Ormat Extends CD4 Geothermal PPA Terms with 27% Price Hike

Event summary

  • Ormat amended PPAs with 3CE and SVCE for 15MW of CD4 geothermal plant capacity, extending terms to 2037 from 2032.
  • Contract pricing increased by ~27%, with new terms effective October 1, 2026.
  • Contracted capacity rose from 7MW to 7.5MW under each agreement.
  • Remaining CD4 output continues to be sold to SCPPA under separate terms.

The big picture

This amendment reflects Ormat's proactive strategy to secure improved PPA terms ahead of expiration, capitalizing on rising electricity demand in California. The 27% price increase suggests strong pricing power in geothermal contracts, while the extended 15-year terms provide revenue visibility. The deal underscores the value of long-term contracts in renewable energy as utilities seek stable, clean power sources.

What we're watching

Pricing Power
Whether Ormat can sustain this 27% price increase across other geothermal assets.
Contract Strategy
The pace at which Ormat executes similar 'blend-and-extend' amendments for other expiring PPAs.
Demand Dynamics
How California's growing electricity demand impacts long-term contract valuations.