News from Texas and California as OCI Energy signs a memorandum of understanding with LG Energy Vertech, and Ormat Technologies signs a US$62 million tax equity for Texas and California BESS projects.
OCI signs MOU with LG Energy Vertech
Developer-operator OCI Energy has signed a memorandum of understanding (MOU) with LG Energy Solutions’ US energy storage division, LG Energy Vertech, for the Alamo City battery energy storage system (BESS) project.
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Under the terms of the MOU, LG Energy Solution Vertech will supply OCI with the BESS and energy management technology.
A ceremony for the signing of the MOU was held in Seoul, South Korea. The ultimate parent company of OCI Energy is South Korea-based conglomerate OCI.
The project will be located in Bexar County, Texas. Previously, the project was expected to be operational in late 2026, but now looks to reach commercial operation in 2027. OCI will be responsible for the project’s development, financing, construction, operation, maintenance and ownership.
Notably, the MOU is not a binding contract, which potentially reflects the uncertainty in the BESS industry at the moment, from shifting tariffs and the possibility of the ‘One, Big, Beautiful Bill’ for budget reconciliation bringing a swift end to tax credits for energy storage.
Sabah Bayatli, president of OCI Energy, recently spoke with Energy-Storage.news about the selection process for the Alamo City BESS supplier and the impact of tariffs, stating:
“The real challenge is for people financing a project now. If you have only shortlisted Chinese suppliers, you’ll have a problem. The tariffs shift you to beyond China, and you’ll probably have to wait for the 90 days to pass. We have different manufacturers shortlisted, including some in the US. But the tariffs actually add more complexity to US-based suppliers with components from abroad, because you have numerous tariffs to take into account.”
About the signing of the MOU and the Alamo City BESS project, Bayatli said:
“The Alamo City BESS project demonstrates the strength of international partnerships in delivering critical energy infrastructure that will provide CPS Energy customers with greater energy security.”
“We are proud to work alongside CPS Energy and LG Energy Solution Vertech to realise this vision for a stronger, safer grid that provides more affordable power, while supporting local economic development.”
Ormat Technologies signs US$62 million tax equity partnership
Also in Texas, IPP Ormat Technologies has signed a US$62 million tax equity partnership with Morgan Stanley Renewables for a BESS project in the state and another in California.
The transaction covers the 60MW/120MWh Lower Rio project, located in Texas, and the 35MW/140MWh storage, 42MW solar Arrowleaf project, located in California. Both projects are expected to reach commercial operations by the end of the year.
Ormat has already secured offtakers for both projects.
In August 2024, Ormat signed seven-year tolling agreements with optimiser Equilibrium Energy for two BESS projects, including Lower Rio and the 60MW/120MWh Bird Dog BESS.
In July 2023, the company signed a power purchase agreement (PPA) with San Diego Community Power, one of California’s Community Choice Aggregator (CCA) non-profit energy suppliers for Arrowleaf.
Ormat recently released its Q1 2025 financial results, in which the company saw its energy storage segment revenues increase by 120%.
CEO of Ormat, Doron Blachar communicated about tariffs at the time:
“Regarding the recent reciprocal tariffs, we anticipate a limited short-term impact on our Storage Segment as we have already procured batteries for all projects currently under construction.”
“Additionally, our electricity segment operations and project development have limited exposure to China, mitigating potential adverse effects from the tariffs.”
Blachar seems sure-footed when it comes to tax credits as well, stating with the announcement of the tax equity partnership:
“This Hybrid Tax Equity partnership is the first of its kind for our Energy Storage portfolio and highlights the innovative efforts we are taking to optimise the projects’ economics and the Company’s profitability to ensure that we have the funding we need to support our long-term growth, while simultaneously helping advance our explicit goal of monetising US$160 million of tax benefits this year.”
“By continuing to effectively monetise the benefits of ITCs for our growing Energy Storage project portfolio through 2026, we are strengthening our ability to further invest in our development pipeline and ensure that we remain well-positioned to support the growing demand for energy storage projects.”
