Ormat Secures First Direct Data Center Partnership to Power Switch Facilities with Geothermal Energy

2026-01-12 companies

Reno, Tuesday, 13 January 2026.
Ormat Technologies has marked a strategic milestone by signing its first direct Power Purchase Agreement with a data center operator. The 20-year deal with Switch will supply 13 MW of carbon-free geothermal energy from Nevada, highlighting the critical shift towards sustainable power sources for energy-intensive digital infrastructure.

Infrastructure Upgrades and Delivery Timeline

The agreement, announced on January 12, 2026, stipulates that Switch will purchase approximately 13 MW of renewable energy generated at the Salt Wells geothermal power plant in Churchill County, Nevada [1][4]. While the partnership is now official, the actual flow of power is scheduled to commence in the first quarter of 2030 [1]. This timeline accommodates a comprehensive modernization of the Salt Wells facility, a binary-cycle plant originally commissioned in 2009 and acquired by Ormat in October 2023 [2]. Ormat expects to finalize these major upgrades by the second quarter of 2026 to optimize the plant’s efficiency [1][2]. Furthermore, the contract includes an option for Ormat to expand the site’s generation capacity by adding an approximately 7 MW solar photovoltaic (PV) facility, creating a hybrid renewable energy source for Switch’s operations [1][2].

Strategic Shift Toward Data Center Support

This collaboration represents a significant pivot for Ormat Technologies (ORA), marking its first direct Power Purchase Agreement (PPA) with a data center operator [1][6]. The move highlights the increasing pressure on digital infrastructure companies to secure reliable, baseload renewable power to support energy-intensive Artificial Intelligence (AI) and cloud workloads. Alise Porto, Senior Vice President of Energy & Sustainability at Switch, noted that geothermal energy offers the specific resiliency profile required for these next-generation technologies [5]. For Ormat, the deal is part of a broader strategy to improve the economics of its portfolio; the company has identified the potential to recontract over 100 MW of its existing fleet to capitalize on higher demand [1][3].

Financial Performance and Market Reaction

The deal was publicized amidst a period of strong financial momentum for Ormat. In the third quarter of 2025, the company reported revenue of $249.7 million, exceeding analyst expectations of $234.3 million—a revenue surprise of approximately 6.573 percent [5]. This figure also represented a year-over-year revenue increase of 17.92% [3]. Earnings per share for the same period reached $0.41, surpassing the forecasted $0.3859 [5]. Market reaction to Ormat’s strategic direction has been positive; the company’s stock has surged 76.5% over the past year [5]. Following the momentum, TD Cowen upgraded the stock from “Hold” to “Buy” on January 9, 2026, raising the price target to $130 specifically due to the potential upside from data center contracts [5].

Broader Industry Implications

Ormat’s partnership with Switch reflects a wider trend of major technology firms investing directly in geothermal energy to solve the intermittency issues associated with wind and solar. Switch joins other industry giants in this pursuit; Meta recently partnered with Sage Geosystems and XGS for up to 150 MW of power, while Google has also made investments in the geothermal sector [2]. As data centers continue to expand their footprint in Nevada and beyond, the ability to secure 24/7 carbon-free power from established facilities like Salt Wells is becoming a critical competitive differentiator [2][5].

Sources

Data Centers Geothermal Energy