currently owned or installed to utilities and developers worldwide by Ormat


of Ormat’s generating capacity comes from geothermal



of recovered energy generation capacity as of 2020

The Path to Drawdown: Geothermal

Solving climate change and remaining below 1.5ºC of global temperature increase requires that the world switch to generating power from fossil fuels to using 100% emissions free sources.

Geothermal power is a technology that converts the steam coming off of underground reservoirs of hot water into electricity. Some geothermal techniques reinject the condensed steam back into the underground reservoirs after being used for electricity generation, and others use geothermal steam to heat another liquid, which is used to generate electricity. Unlike wind and solar, geothermal power generation can take place 24-7 without interlude and under almost any weather conditions. And while drilling for geothermal is expensive, the heat source itself is free.

Geothermal power accounted for 0.34% of total global electricity generation in 2018. According to Project Drawdown, geothermal would have to grow to about 2.6-2.8% by 2050 for the world to be on a path to remain under 1.5ºC of warming.

To get there, geothermal would need to undergo a drastic expansion over the coming decades:

  • 90 TWh in 2018
  • 4,064 TWh in 2050
  • 12.65% CAGR from 2018-2050

The IEA also projects that, to reach a 100% clean electricity grid by 2030, geothermal electricity generation would require a 10% annual increase between 2019 and 2030.


Ormat Technologies (stock ticker: ORA) is a vertically integrated manufacturer of renewable geothermal energy technology, including turbochargers, turbines, generators, and heat exchangers. ORA is also expanding into energy storage services and solar PV. It is headquartered in Reno, Nevada, with their main production facilities located in Yavne, Israel.

ORA's Role in Drawdown

According to the IEA’s model (p. 198), geothermal power generation capacity needs to increase from 15 GW in 2020 to 52 GW by 2030, and to 126 GW by 2050 for the world to reach net zero emissions by the middle of this century.

In 2020, the geothermal capacity that ORA owned and operated totaled 0.873 GW, or 5.82% of the global market share. For ORA to maintain this same market share in the decarbonized energy mix projected by the IEA, they would need to increase geothermal capacity to 3.03 GW by 2030 and 7.33 GW by 2050. 

This level of growth would call for an annual growth rate of 13.24% between now and 2030, and 4.52% between 2030 and 2050. ORA has been steadily increasing its geothermal between 2016 and 2020 (5.75% CAGR) but they would need to accelerate this growth aggressively to keep its place in a world of net zero emissions by 2050.

ORA: What We Like

Steadily expanding production of renewable solutions:

  • 5.53% CAGR of renewable electricity generation from geothermal, solar PV and recovered energy-based power since 2016
  • 55.08% CAGR in revenue from energy storage between 2017-2020. ORA’s energy storage segment (p. 22) includes developing algorithms to optimize battery energy storage systems, testing different battery cells for different energy markets, and developing self-integrated battery systems
  • Plans for 1.2 GW of additional potential projects (p. 14), between 200-300 MW will be commissioned by 2023 - 

In addition to helping avoid GHG emissions through its manufacturing operations, ORA has shown their commitment to sustainability in a few ways:

  • Target for a 5% reduction per revenue (p. 65) in scope 1 and 2 emissions by the end of 2021, measured against 2019 base levels

Long-standing track record of issuing Sustainability Reports since 2010

ORA: What We Want to See Improve

Aim for Zero Emissions

We approve of ORA’s target-setting of 5% reduction per revenu in emissions by 2021, but we believe this goal is too modest. We want to see ORA aim for zero GHG emissions by the end of the decade.

Convert to Renewable Energy Consumption

Key to achieving zero emissions is to decouple ORA’s production and distribution from fossil fuel consumption. As of 2019, ORA consumed at least 202.7 million gigajoules (pp. 65-66) of non-renewable energy. We would like to see ORA commit to switching to using renewable energy.

Expand Solar

We are excited that ORA is one of the leading providers of geothermal energy in the US. But according to the IEA (p. 198) and Project Drawdown, solar power will by far be the leader in renewable energy in the next decade. Given their cost effectiveness and efficiency, this should come as no surprise. ORA is doing the right thing by expanding into solar PV, and we want to see them expand into this space more aggressively.

Other Geothermal Stocks in the Climate Index

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