Ormat Technologies commences operations for 20MW/20MWh New Jersey BESS

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IPP Ormat Technologies has commenced commercial operations for its 20MW/20MWh battery energy storage system (BESS) project, the Montague energy storage facility.

The New Jersey-located facility, anticipated to be eligible for a 30% investment tax credit, will provide ancillary services on the merchant market to Pennsylvania-New Jersey-Maryland (PJM).

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New Jersey has seen slow rollouts for energy storage projects, leading to state senators voting in favour of bill S-225 in February, created to incentivise energy storage deployment in New Jersey through a pilot programme.

The state aims to achieve 2,000MW of installed energy storage by 2030. According to the 2024 New Jersey Energy Storage Incentive Program Straw Proposal, the state says the goal will be met primarily through the combination of the New Jersey Storage Incentive Plan (SIP) and the Competitive Solar Incentive (CSI) Program, establishing targets per fiscal year depending on the available budget.

Perhaps a testament to the state’s ambition and current progress, in 2022, the state’s last remaining coal power plant was demolished, with the plant owner committing to deploying large-scale energy storage on the site. No project has yet been announced at the site.

Ormat recently completed a deal for the 80MW/320MWh Bottleneck BESS project in California via a tax credit transfer deal. The company sold the investment tax credit (ITC) to a third party, covering 40% of the project’s capital expenditure.

The company has also been active in ERCOT, signing seven-year tolling agreements with optimiser Equilibrium Energy for two BESS projects, the 60MW/120MWh Lower Rio project and the 60MW/120MWh Bird Dog project.

Ormat’s New Jersey Montague project brings the company’s total capacity in PJM to 120MW/120MWh, operating 290MW/658MWh of total energy storage projects. Ormat is best known as a developer, owner and operator of geothermal assets, but opened an energy storage division in 2020, setting itself the target of bringing into operation between 500MW – 530MW and over 1GWh of battery storage by the end of 2025.

Doron Blanchar, CEO of Ormat said of the project: “The addition of the Montague project brings valuable ancillary services to the PJM market, enhancing the reliability of the grid while also supporting the transition to a cleaner energy future. We are proud to support the PJM market with our premium renewable power generation and energy storage solutions.”

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