Ormat looking elsewhere after Washoe declines exploration permits

Burning Man’s gain could be Washoe County’s pain when it comes to geothermal development.

Last year, Burning Man filed a lawsuit that eventually halted proposed geothermal exploration drilling near Gerlach, gateway to the annual counterculture festival that drew an estimated 73,000 people to the Black Rock Desert in 2023.

Reno-based Ormat Technologies had received approval in January 2023 from the Washoe County Board of Adjustment to begin drilling 13 test wells, but the Washoe County Board of Commissioners overturned that approved permit in April in a 3-2 vote.

Doron Blachar, Ormat’s chief executive officer, told NNBW in a recent interview that the company’s exploration efforts may shift away from Washoe County to areas where it knows it can be approved and develop geothermal facilities.

“Last year we invested more than $600 million in development projects, mostly in the U.S.,” Blachar said. “The year before that we invested over $500 million, and the year before that also was over $500 million.

“Geothermal projects require significant capital outlay to develop, and if we have a specific county that won’t give us a permit, we are unable to invest the millions of dollars required for project success. It is a business decision. We need to see a path to success, and if that path doesn’t exist, or it takes too long, then we must look at other counties and countries.”

Paul Thomsen, vice president of business development for Ormat Technologies, said the county’s permitting reversal was a gut-punch for the state’s largest geothermal developer and operator. Ormat owns and operates geothermal facilities throughout Nevada, including McGinness Hills in Lander County, Steamboat Hills and San Emidio in Washoe County, Tungsten Mountain and Brady Complex in Churchill County, Jersey Valley in Pershing County, and Tuscarora in Elko County.

Ormat’s decision to shelve future geothermal development or exploration in Washoe County could rob county coffers of millions in exploration dollars.

“If we can’t permit in a timely fashion, we are going to look at expanding in Utah or Oregon and start to move away from Nevada, which is detrimental to the business community,” Thomsen told NNBW. “Our hands are tied. We want to work alongside the county, but at this time, Washoe County is not going to be a priority since we can’t get administrative permits.”

Paul Thomsen

 

Blachar said Ormat prefers to invest in Nevada, but if the company lacks support and can’t secure necessary permitting it will look at other places where it already has geothermal assets, such as California, Kenya and Indonesia.

“We are investing over a half billion dollars every year, and we want that money to come to Nevada if we have the projects,” Blachar said. “But without administrative permits, we can’t support Nevada’s economy. We have the power purchase agreements – it's not a question of selling the electricity. We have the resources, but we cannot develop it.

“We now have to choose between alternatives of where to develop, invest money and build power plants,” he added. “The only limitation is who will have us, and are they willing to support renewable energy development.”

NNBW reached out to county commissioners Clara Andriola and Mike Clark for comment for this article but did not receive responses. Washoe County Board of Commissioners Chair Alexis Hill, who voted in favor of granting Ormat’s exploration permit, expressed disappointment for the potential financial ramifications of Ormat’s inability to advance its renewable energy project outside of Gerlach.

“It’s sad to hear that Ormat is thinking about not investing in Washoe County because Washoe County was at the cutting edge when Ormat was developing Steamboat,” Hill said. “That (county) commission was willing to take a risk (Steamboat Hills was commissioned in 1993), and we can see how successful that project has been. This commission was only approving the exploratory process with Ormat, which had checked all the boxes and met all the environmental standards. Washoe County is a great place to do business, and I hope (Ormat) will try again and we will be a supporter of geothermal because it’s really the future of this state.”

Doron Blachar

 

Acquisitions may be an easier path for Ormat to grow its geothermal footprint in Nevada and neighboring states. In January Ormat Technologies completed its $271 million acquisition of a 150-megawatt portfolio of geothermal and solar assets from Enel Green Power North America.

The purchase included:

• Stillwater hybrid geothermal/solar plant and Salt Wells geothermal plant in Churchill County. Stillwater Solar PV II also located in Churchill County.

• Cove Fort geothermal power plant in Beaver County, Utah. Ormat constructed the facility for Enel in 2013.

• Greenfield development projects in Northern California near the Oregon border.

• Woods Hills Solar PV Park in Windham County, Conn.

Blachar told NNBW that Ormat is always seeking growth through acquisition, and Enel had been on the company’s radar for the past six or seven years. One of the main attractions besides growth was the opportunity to increase facility operations through company expertise, Blachar added.

“We built Cove Fort, and we knew there was some upside there and potential to grow that asset,” he said. “We had been back and forth in discussions with Enel. You need to have quite a few stars align to do an acquisition, and it takes time.

“We have a few parameters when we buy an acquisition,” Blachar added. “We look for assets that are underperforming because we know how to improve them either through operations, or through new technology that we manufacture and build. The second is whether or not we can expand the business, and with Cove Fort we believe the resource there can support at least one more power plant.”

Cove Fort, Stillwater and Salt Wells currently produce around 42 megawatts, Blachar said, but by the end of 2025 the three facilities should be producing an additional 17 megawatts of power, he noted. Ormat will invest $55 million spread almost equally between the three geothermal facilities.

“That is Ormat’s strength – we take assets and we make them better either by improving operations or by bringing in new technology,” Blachar said.

Added Thomsen: “What Ormat does better than any other company is optimize resources and assets. Knowing a resource is there underground is invaluable. We have done that at Steamboat and at McGuiness Hills. That is why the Enel acquisition is so meaningful to us – those geothermal resources are known, and we think we can improve upon them.”

Ormat also will begin advancing plans for greenfield development in Northern California near Surprise Valley. Ormat also will have to decide if any power ultimately produced there will go to California, Nevada or Oregon.

“It is a great potential resource,” Thomsen said. “We haven’t drilled any wells there yet, but there is well data. We think it's a great resource with great geothermal potential, but we will have to do a lot of work over the next couple of years to prove that up.”