# Organic Rankine, Kalina and sCO2 cycles: Economics and contracts

Why running hours make or break an ORC

Source page: https://www.materialinsights.org/energy/e_orc/rc-econ/

What this tab covers Economics and commercial structures: levelised cost of the recovered energy against the fuel it avoids, host-site risk, and service models such as heat-as-a-service.

ORCs cost more per kW than steam and convert less heat, but run unattended; levelised cost is roughly USD 40-85 per MWh at high running hours and much higher below 4,000 hours.

#### Levelised cost of heat or avoided cost
Mixed

DOE gives installed ORC cost of USD 1,900-4,500 per kW (lower at larger sizes) and O&M of 0.9-1.8 US cents per kWh. At 7,000 hours a year, an 8% cost of capital and 20 years this works out at roughly USD 37-84 per MWh (calculated); at 4,000 hours it rises to about USD 57-133 per MWh (calculated), which is why running hours decide viability. Thermoelectric demonstrations in California showed simple paybacks of 4.8-6.3 years for the modules alone.^[1](https://betterbuildingssolutioncenter.energy.gov/sites/default/files/attachments/Waste_Heat_to_Power_Fact_Sheet.pdf)^[9](https://www.energy.ca.gov/publications/2024/advanced-thermo-electric-generator-system-ategs)
 Installed ORC capex USD 1,900-4,500/kW^[1](https://betterbuildingssolutioncenter.energy.gov/sites/default/files/attachments/Waste_Heat_to_Power_Fact_Sheet.pdf) ORC O&M 0.9-1.8 US cents/kWh^[1](https://betterbuildingssolutioncenter.energy.gov/sites/default/files/attachments/Waste_Heat_to_Power_Fact_Sheet.pdf) Levelised cost at 7,000 h about USD 37-84/MWh (calculated)^[1](https://betterbuildingssolutioncenter.energy.gov/sites/default/files/attachments/Waste_Heat_to_Power_Fact_Sheet.pdf) Levelised cost at 4,000 h about USD 57-133/MWh (calculated)^[1](https://betterbuildingssolutioncenter.energy.gov/sites/default/files/attachments/Waste_Heat_to_Power_Fact_Sheet.pdf)

#### Host factory credit risk
Mixed

As with any recovery asset, the ORC earns only while the host runs. Ormat handled this at gas compressor stations by contracting for the rights to turbine exhaust heat and selling power to a utility under a 20-year PPA (2008 release, dated), so revenue depends on pipeline duty rather than a single factory. That is not risk-free: Ormat's 2025 annual report says these plants run below capacity because the compressors run less, and that one customer is expected to end its waste heat agreement. Cement and steel hosts carry cyclical demand risk; geothermal and biomass uses avoid host risk altogether.^[6](https://investor.ormat.com/news-events/news/news-details/2008/Ormat-Technologies-Signs-a-New-Power-Purchase-Agreement-With-Great-River-Energy/default.aspx)^[20](https://www.sec.gov/Archives/edgar/data/0001296445/000119312526166801/ora_annual_report_2025.pdf)
 Ormat PPA term 20 years^[6](https://investor.ormat.com/news-events/news/news-details/2008/Ormat-Technologies-Signs-a-New-Power-Purchase-Agreement-With-Great-River-Energy/default.aspx) Ormat recovered-energy capacity (2025) about 50 MW, below full output^[20](https://www.sec.gov/Archives/edgar/data/0001296445/000119312526166801/ora_annual_report_2025.pdf)

#### Heat-as-a-service and ESCO models
Favourable

Ormat's recovered-energy model is the reference case: a subsidiary owns the units, holds heat rights and sells electricity (nine units of nearly 50 MW along the Northern Border pipeline in 2008; about 50 MW in three portfolios in its 2025 annual report). Turboden mostly sells equipment and service; 90% of its biomass customers kept an after-sales contract. Turboden commissioned the 13 MW Riyadh Cement plant; the report does not describe third-party ownership there. Exergy reports about 600 MW of ORC capacity worldwide, around 550 MW of it geothermal, and opened a US subsidiary in 2026 to target geothermal and waste heat recovery (company figures).^[2](https://www.cemnet.com/News/story/182242/turboden-commissions-13mw-waste-heat-power-plant-at-riyadh-cement.html)^[5](https://bioenergyinternational.com/turboden-reflects-300th-biomass-orc-milestone/)^[6](https://investor.ormat.com/news-events/news/news-details/2008/Ormat-Technologies-Signs-a-New-Power-Purchase-Agreement-With-Great-River-Energy/default.aspx)^[13](https://www.thinkgeoenergy.com/exergy-launches-us-operations-to-support-rapid-geothermal-growth-across-north-america/)^[20](https://www.sec.gov/Archives/edgar/data/0001296445/000119312526166801/ora_annual_report_2025.pdf)
 Ormat units on Northern Border pipeline 9, nearly 50 MW^[6](https://investor.ormat.com/news-events/news/news-details/2008/Ormat-Technologies-Signs-a-New-Power-Purchase-Agreement-With-Great-River-Energy/default.aspx) Turboden biomass customers with after-sales contract 90%^[5](https://bioenergyinternational.com/turboden-reflects-300th-biomass-orc-milestone/) Exergy installed ORC (2026, company) about 600 MW, about 550 MW geothermal^[13](https://www.thinkgeoenergy.com/exergy-launches-us-operations-to-support-rapid-geothermal-growth-across-north-america/)

#### Sources

1. [Waste Heat to Power, CHP Technology Fact Sheet Series (DOE/EE-2347)](https://betterbuildingssolutioncenter.energy.gov/sites/default/files/attachments/Waste_Heat_to_Power_Fact_Sheet.pdf) US Department of Energy, 2021
2. [Turboden commissions 13MW waste heat power plant at Riyadh Cement](https://www.cemnet.com/News/story/182242/turboden-commissions-13mw-waste-heat-power-plant-at-riyadh-cement.html) CemNet (International Cement Review), 2026
3. [Turboden reflects on 300th biomass ORC milestone](https://bioenergyinternational.com/turboden-reflects-300th-biomass-orc-milestone/) Bioenergy International, 2018
4. [Ormat Technologies signs a new power purchase agreement with Great River Energy (dated)](https://investor.ormat.com/news-events/news/news-details/2008/Ormat-Technologies-Signs-a-New-Power-Purchase-Agreement-With-Great-River-Energy/default.aspx) Ormat Technologies (press release), 2008
5. [Advanced Thermo-Electric Generator System (ATEGS), CEC-500-2024-105](https://www.energy.ca.gov/publications/2024/advanced-thermo-electric-generator-system-ategs) California Energy Commission, 2024
6. [Exergy launches US operations to support rapid geothermal growth across North America (company figures)](https://www.thinkgeoenergy.com/exergy-launches-us-operations-to-support-rapid-geothermal-growth-across-north-america/) ThinkGeoEnergy, 2026
7. [Annual Report 2025 including Form 10-K (OREG recovered energy plants, table of power plants and footnote 8)](https://www.sec.gov/Archives/edgar/data/0001296445/000119312526166801/ora_annual_report_2025.pdf) Ormat Technologies (SEC filing), 2026

## Other sections

- [Summary](https://www.materialinsights.org/energy/e_orc/index.md)
- [Overview](https://www.materialinsights.org/energy/e_orc/overview/index.md)
- [Correlation](https://www.materialinsights.org/energy/e_orc/correlation/index.md)
- [Science and thermodynamics](https://www.materialinsights.org/energy/e_orc/rc-sci/index.md)
- [Engineering and integration](https://www.materialinsights.org/energy/e_orc/rc-eng/index.md)
- [Impact and additionality](https://www.materialinsights.org/energy/e_orc/rc-impact/index.md)
- [What to track](https://www.materialinsights.org/energy/e_orc/tracking/index.md)
- [Relationships](https://www.materialinsights.org/energy/e_orc/links/index.md)