Ormat’s Geothermal Strategy 2025: How Alliances with SLB and Sage are Shaping Next-Gen Energy

Industry Adoption: Ormat Technologies’ Strategic Shift from Conventional Geothermal to Next-Gen Alliances

Between 2021 and 2024, Ormat Technologies cemented its leadership in the conventional geothermal market through a strategy of consolidation and operational excellence. The period was defined by scaling its vertically integrated model, which combines manufacturing with project ownership. Key actions included the significant $271 million acquisition of a 150 MW geothermal and solar portfolio from Enel Green Power in early 2024, strengthening its U.S. asset base. Partnerships focused on deploying its proven Ormat Energy Converter (OEC) technology in new and existing markets, exemplified by the EPC contract to build Canada’s first 5 MW conventional geothermal plant with DEEP Earth Energy and major contracts in New Zealand with Contact Energy. The commercial applications were clear: provide reliable, baseload renewable power through established binary-cycle technology, securing long-term revenue via Power Purchase Agreements (PPAs) with entities like the Clean Power Alliance. This strategy demonstrated broad adoption of conventional geothermal as a bankable, mature technology.

The landscape has undergone a pivotal transformation from January 2025 to today. Ormat has aggressively shifted from an operator optimizing mature assets to an architect of the next generation of geothermal energy. The inflection point is the company’s strategic embrace of partnerships to de-risk and accelerate emerging technologies. The August 2025 commercial agreement with Sage Geosystems to pilot and deploy its “Pressure Geothermal” technology is a game-changing move. This technology combines power generation with long-duration energy storage, directly addressing the critical grid need for firm, dispatchable power. This pivot acknowledges a new, massive opportunity: the soaring energy demand from AI and data centers, which require 24/7 carbon-free energy that intermittent renewables cannot supply alone. The partnership with Sage, alongside the 2024 collaboration with energy giant SLB to advance Enhanced Geothermal Systems (EGS), signals that Ormat is positioning itself not just to participate in the future of geothermal, but to define it. The focus has expanded from simply selling megawatts to developing integrated energy solutions that offer both baseload power and grid stability.

Table: Ormat Technologies’ Strategic Capital Allocations in Geothermal and Energy Storage

Table: Ormat’s Evolving Partnership Ecosystem for Geothermal Dominance

Geographic Expansion: Ormat’s Pivot from US Consolidation to Global Innovation Hubs

Between 2021 and 2024, Ormat’s geographic strategy was centered on fortifying its dominant position in the United States and executing growth in proven international markets. The $271 million acquisition of Enel’s assets in Nevada and Utah and the strategic land acquisition near its Cove Fort, Utah facility in December 2024 underscore a clear focus on consolidating its domestic stronghold. Simultaneously, the company pursued conventional growth abroad, signing an agreement with DEEP Earth Energy to pioneer Canada’s geothermal market and securing a massive $200 million EPC contract with Contact Energy in New Zealand, a country where it has deep operational history. The geographic pattern was one of deepening presence in core markets while cautiously entering new regions with proven technology.

From 2025 onward, Ormat’s geographic footprint reflects a more complex, dual-pronged strategy. The United States remains the epicenter of its innovation and policy-driven growth. The expedited permitting for three of its Nevada projects by the U.S. Interior Department and the pilot project with Sage Geosystems highlight the U.S. as the testbed for accelerating development and deploying next-generation technology. At the same time, Ormat is demonstrating its capacity for global execution on multiple fronts. The commencement of commercial operations at the 35 MW Ijen facility in Indonesia and the financial close of the 10 MW project in Dominica prove its ability to bring complex international projects online. This shows a shift: the U.S. is becoming the hub for R&D and advanced system deployment, while the company continues to export its established project development and operational expertise to diverse global markets from Southeast Asia to the Caribbean.

Technology Maturity: Ormat’s Acceleration into EGS and Integrated Storage

In the 2021–2024 period, Ormat’s technology strategy revolved around the optimization and scaled deployment of its mature, proprietary Ormat Energy Converter (OEC) binary-cycle technology. This commercially proven system, which efficiently generates power from low-to-medium temperature resources, was the cornerstone of its project wins, including the 101 MW plant in New Zealand and the 5 MW pilot in Canada. The launch of a new between-bearings turbine in 2021 was an incremental improvement, enhancing the efficiency of an already scaled technology. While Ormat began expanding its energy storage portfolio, its core geothermal activities remained firmly in the commercial and scaling phase, leveraging decades of operational data to deliver bankable projects.

The year 2025 marks a clear acceleration into the pilot and early commercialization stages for next-generation geothermal technologies. The strategic agreement with Sage Geosystems moves “Pressure Geothermal” technology, a novel system combining power generation with energy storage, directly into a pilot deployment phase at an existing Ormat facility. This is a critical validation point, taking the technology from theory to a real-world test with an industry leader. Similarly, the 2024 partnership with SLB is designed to de-risk and commercialize Enhanced Geothermal Systems (EGS), a technology largely in the demonstration phase. By combining SLB’s subsurface expertise with its own, Ormat is aiming to solve the geological and drilling challenges that have kept EGS from scaling. This represents a fundamental shift from being a consumer of its own mature technology to becoming a key enabler and co-developer in the race to make next-generation geothermal commercially viable.

Table: SWOT Analysis of Ormat’s Geothermal Strategy

Forward-Looking Insights and Summary

The data from 2025 paints a clear picture of an industry leader in transition. Ormat Technologies is no longer content to simply dominate the conventional geothermal market; it is actively architecting its future. The most critical signal to watch in the year ahead is the outcome of the pilot project with Sage Geosystems. A successful deployment of the “Pressure Geothermal” technology would serve as a powerful validation of integrating geothermal with long-duration storage, potentially unlocking a new class of hybrid assets and creating a significant competitive moat for Ormat. Conversely, any setbacks would highlight the persistent risks of next-generation geothermal development.

Market actors should also closely monitor the progress of Ormat’s three fast-tracked Nevada projects. Their development timeline will be a key barometer for the real-world impact of favorable U.S. policy and will signal how quickly new capacity can be brought online to meet surging demand. Furthermore, the next wave of PPAs will be revealing. A shift in contracts toward EGS-powered facilities or agreements specifically structured to serve data centers would confirm that the market is ready to commercially embrace these emerging technologies. While its traditional business of building and operating conventional plants remains a robust foundation, Ormat’s future growth trajectory is now inextricably linked to its ability to convert these strategic, technology-focused partnerships into commercially scaled projects. For executives and investors navigating this landscape, continuously monitoring these strategic shifts, partnership outcomes, and policy impacts is essential. Understanding the next move from pioneers like Ormat requires a level of detailed competitive intelligence that goes beyond headlines.

Frequently Asked Questions

What is the main change in Ormat’s strategy from 2024 to 2025?
Before 2025, Ormat focused on consolidating the conventional geothermal market by acquiring existing assets and scaling its proven Ormat Energy Converter (OEC) technology. Since 2025, the company has pivoted to architecting the next generation of geothermal energy. This involves forming strategic alliances with partners like SLB and Sage Geosystems to pilot and commercialize emerging technologies like Enhanced Geothermal Systems (EGS) and integrated energy storage solutions.

Why are the partnerships with Sage Geosystems and SLB so important to Ormat’s future?
These partnerships are critical because they move Ormat from being just an operator of mature assets to a co-developer of cutting-edge technology. The collaboration with SLB aims to commercialize Enhanced Geothermal Systems (EGS), while the agreement with Sage Geosystems is focused on piloting “Pressure Geothermal,” a technology that combines power generation with long-duration energy storage. These alliances position Ormat to lead in next-gen geothermal and capture the massive market for 24/7 carbon-free power.

What new market demand is driving Ormat’s pivot to next-gen geothermal?
The primary driver is the soaring, 24/7 energy demand from AI and data centers. These facilities require constant, reliable, carbon-free power that intermittent renewables cannot supply alone. Ormat’s new strategy, focusing on technologies that provide firm, dispatchable baseload power and grid stability, directly targets this massive and growing market opportunity.

What is the difference between Ormat’s traditional geothermal technology and the new systems it is exploring?
Ormat’s traditional technology is its proven Ormat Energy Converter (OEC), a binary-cycle system used for conventional geothermal projects that rely on naturally occurring hot water reservoirs. The new systems it is exploring are more advanced. Enhanced Geothermal Systems (EGS) involve creating artificial reservoirs in hot rock, expanding geographic potential. The “Pressure Geothermal” system from Sage Geosystems is a hybrid that combines power generation with large-scale energy storage, offering both baseload power and grid-balancing services.

According to the SWOT analysis, how has the primary risk to Ormat’s strategy changed in 2025?
The nature of risk has shifted from financial to technological. In the 2021-2024 period, the main weakness was the high upfront capital cost of projects, even with proven technology. From 2025 onwards, the key risk is technological—the inherent uncertainty that pilot projects for EGS and “Pressure Geothermal” will succeed and scale economically. Ormat is strategically accepting this higher technological risk for a potentially higher reward in a larger market.