Shares of Ormat Technologies (NYSE:ORA) jumped about 6% on Tuesday after the company disclosed a long-term power purchase agreement with data center operator Switch.
The 20-year agreement covers roughly 13 megawatts of geothermal capacity and marks Ormat’s first direct PPA with a data center customer. Power will be supplied from Ormat’s Salt Wells geothermal facility near Fallon, Nevada, supporting Switch’s data center operations in the state. Deliveries are expected to begin in the first quarter of 2030, following a significant upgrade to the Salt Wells plant that is scheduled for completion by the second quarter of 2026.
As part of the agreement, Ormat also retains the option to further increase output by adding an approximately 7MW solar photovoltaic installation to meet auxiliary power requirements at the geothermal site.
“This agreement not only advances Switch’s sustainability goals but also underscores the growing demand for renewable energy within the data center sector,” said Doron Blachar, Chief Executive Officer of Ormat Technologies. He added that the structure could support future recontracting opportunities for more than 100MW of Ormat’s existing generation fleet.
The deal highlights the rising importance of dependable, carbon-free electricity for data centers, particularly as demand accelerates for artificial intelligence and high-performance computing. Unlike wind and solar, geothermal power offers steady, around-the-clock baseload generation.
Alise Porto, senior vice president of Energy & Sustainability at Switch, said that “geothermal energy offers the resiliency and sustainability profile required for the next generation of AI and cloud workloads.”