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Geothermal company Ormat buys Viridity Energy for US$35 million to enter storage market

Geothermal company Ormat buys Viridity Energy for US$35 million to enter storage market

Ormat Technologies is best known for its work in geothermal power. Image: wikimedia user: asgeir eggertson.

Geothermal power and renewable energy developer Ormat Technologies has signalled its intent to join demand response and energy storage markets with the purchase of Viridity Energy.

The two US companies agreed a deal worth US$35 million, Ormat announced today. Philadelphia-headquartered Viridity makes software solutions that enable the aggregation of diverse energy resources into virtual power plants. The sum will be paid on the closing of the deal, expected to be later this year.

From its founding in 2008, Viridity now has over 850MW of contracts across 3,000 sites. The company serves large energy users, retail energy providers and utilities with the means to monetise and optimise demand response, energy management and energy storage. The company will retain its offices and staff and continue to serve existing customers under the terms of the acquisition. In a recent interview with Energy-Storage.News, Navigant Research analyst Alex Eller said that aggregation and virtual power plants are the coming trend for energy storage and have taken off more quickly than many had expected.

Ormat said it expects Viridity to turn a profit in 2017 and could pay extra sums based on performance both this year and at the end of 2020’s fiscal year.    

“This is an important strategic acquisition which combines Viridity’s technology, its customer base, its highly experienced leadership team and employees that have in-depth knowledge and significant expertise in the demand response and energy storage and its presence in key North American markets together with Ormat’s skills, resources, engineering strengths and access to capital,” Ormat CEO Isaac Angel said.

Angel added that Ormat saw long-term growth for Viridity’s products and services, and that the new parent company would continue to develop Viridity’s VPower software platform. According to Angel, adding the Viridity services to Ormat’s portfolio would enable it to provide a “complete solution” to its customers.

“With Ormat’s management depth, global reach, extensive relationships and financial resources, the Viridity business will be fully empowered to improve its products and services, and deliver increasing value to its customers,” Viridity CEO Mack Treece said.

Ormat currently focuses primarily on its proprietary Ormat Energy Converter, which converts heat into electricity and powers its geothermal solutions and recovered energy generation (REG) facilities. With over 2,000MW experience in the field, including engineering, manufacturing and construction for utilities, Ormat has around 710MW in its own generation portfolio spread across the US, Guatemala, Guadeloupe and Kenya.