Green Tech

Utility Southern California Edison on Wednesday announced a giant solar energy contract with BrightSource Energy, which could eventually result in powering 845,000 homes with the sun's energy.

Through a series of seven projects, SCE intends to purchase up to 1,300 megawatts of electricity from BrightSource Energy's solar towers that use heat to produce electricity.

Although the companies didn't provide a price tag for the deal, it's one of the biggest solar energy contracts to date in the U.S. and a validation of solar tower technology. The project still needs to be approved by regulators and financed.

BrightSource Energy's demonstration facility in Israel's Negev Desert where an array of heliostats, or moving mirrors, concentrate light onto a tower to make steam.

(Credit: BrightSource Energy)

The first project from the deal is scheduled to be a 100-megawatt installation in Ivanpah, Calif. which could be operating in early 2013, supplying 286,000 megawatt-hours of electricity per year, or enough for 65,000 homes.

Concentrating solar technology uses reflective troughs or mirrors to concentrate light onto a liquid to make steam. The steam then runs a traditional electricity turbine.

The technology, best suited for desert climates, is being revived in places like California which have a mandate to produce 33 percent of their electricity from renewable sources by 2020.

BrightSource Energy uses mirrors to reflect sunlight onto a tower to heat water which makes steam. The Google.org-backed company, which has roots with developers who did solar thermal projects in the 1980s, says that its air-cooling process preserves water, an important consideration for desert projects.

Several concentrating solar companies were founded in the past five years, but the credit crisis and economic downturn has made it very difficult to finance these expensive projects. One BrightSource Energy competitor, Ausra, has shifted its business strategy away from giant solar power plants.

California utility Pacific Gas & Electric is expected to announce a large solar deal, which will involve solar photovoltaic panels, some time this quarter.

New Jersey utility Public Service Electric and Gas Company on Tuesday announced that it has applied for a $773 Million Solar Energy program to make 120 megawatts of electricity.

BrightSource Energy has raised $115 million, a hefty vote of confidence for its solar power tower technology that converts heat to electricity.

Investors included Google.org, the philanthropic arm of Google, as well as VantagePoint Venture Partners, BP Alternative Energy, Statoil Hydro Venture, and Cargill subsidiary Black River. Existing investors DBL Investors, Draper Fisher Jurvetson, and Chevron Technology Ventures also participated in the Series C round.

A drawing of a power tower where a field of heliostats concentrate light on a tower that houses a steam turbine.

(Credit: BrightSource Energy)

BrightSource designs and operates solar power plants aimed at utilities that need to invest in renewable energy. Pacific Gas & Electric said in March it will purchase up to 900 megawatts from BrightSource solar power plants. It plans to start construction in 2009.

Solar thermal systems are considered cost-competitive with natural gas power plants, particularly for "peak" power which typically happens in the afternoon. They work best in desert environments; existing plants are in the Southwest U.S.

Using mirrors or lenses, sunlight is concentrated onto a liquid which makes steam that turns an electricity turbine.

The most traditional solar thermal technology is a power plant designed around a series of mirrored troughs. BrightSource, by contrast, uses a field of heliostats, or mirrors, to reflect light onto the top of a tower where a steam turbine is.

BrightSource senior vice president for marketing and business development Charles Ricker, who spoke on a panel at a clean technology investor conference in New York on Tuesday, argued that troughs will be phased out in the coming years in favor of other systems.

Power towers are more efficient and require less capital to make than trough solar thermal systems, he said.

The primary driver behind solar thermal technology, which works best in desert areas, is California where some utilities need to make renewable energy part of their power generation mix.

The state's renewable portfolio standard is set at 20 percent by 2010 and 33 percent by 2012, Ricker explained.

To date, BrightSource has raised $160 million.

That ancient, inefficient heating/air conditioning system in your building might be worth something someday.

Pacific Gas & Electric CEO Pete Darbee said in a briefing with reporters Tuesday that the utility is working with government officials to see if there is a way to create a fund that gives building owners financial incentives to replace old compressors, pumps, and other building equipment with new, energy-efficient versions.

Building owners want to get rid of this old equipment, he explained, but the capital requirements are a big hurdle. The program could be structured in a way so that it could be funded partly through the utility bills paid by the customer.

The program would, in some sense, be similar to the residential energy rebate programs PG&E has run for years. Under those, PG&E gives cash rebates to homeowners who replace old washers and dryers with new ones. The utility has also underwritten programs to get consumers to replace incandescent bulbs with energy-efficient compact fluorescent bulbs.

Energy efficiency is the top priority in PG&E's effort to reduce greenhouse gas emissions. For one thing, energy conservation is less taxing on the environment than even getting more power from renewable sources of energy like solar panels.

Energy efficiency is also far cheaper. Technology for energy efficiency costs about 3 to 4 cents per kilowatt-hour, Darbee said. Harvesting energy from a renewable resource might cost 10 to 15 cents a kilowatt-hour or more. Rooftop solar panels have historically hovered around 40 cents a kilowatt-hour, he said. Energy efficiency standards implemented in California in the '70s also show that the programs work--energy consumption per capita has stayed relatively stable in the state since then but have risen substantially in other parts of the nation. Efficiency allowed California not to build 24 power plants in the last 35 years, he argued.

"The fact that you don't use power is the best strategy," he said.

Darbee, who has helped put PG&E at the forefront of greening utilities, spoke at length on a number of topics. Here are some of the highlights.

--PG&E is examining ways it can own its own solar thermal plants. Solar thermal plants--large, sprawling complexes that generate megawatts' worth of electricity from heat from the sun--are far more cost-effective than solar rooftop panels. "With solar farms, you can get down to 10 cents a kilowatt-hour," he said.

Technically, PG&E can build a solar thermal plant now, but it wouldn't qualify for the investment or production credits. That would put PG&E at a 30 percent cost disadvantage. Thus, if it can get that law changed, PG&E might build its own plant. Right now, the utility signs contracts to buy solar thermal-generated power from third-party companies like BrightSource Energy.

Why would it want to build and own solar plants? Solar thermal plants cost millions of dollars, and the start-ups trying to build them don't have the same capital as a major utility. A hiccup in the regulations or electricity demand could become a terminal setback for a start-up. PG&E could ride out such storms.

--He's not wild about a California ballot initiative to get 50 percent of the state's power from renewable sources. "There may be a time when 50 percent seems reasonable, but right now it seems too far out of reach," he said. Nonetheless, it could be possible to raise it from the current 20 percent level to 33 percent in the future. It depends on the state of renewables and the transmission grid.

--Nuclear power will likely make a comeback in the U.S., but the resurgence mostly might occur in the Southeast and other regions where renewables don't work as well. Besides, resistance among segments of California's population could make it difficult to build more nuclear plants there.

"Demand for power is so great in the U.S. that nuclear should play a role," he said.

--Plug-in hybrids could help promote wind power. A lot of wind power gets generated at night, but since few are awake to use it, it goes to waste. With plug-ins, that power could be used to recharge batteries. The utility is also working with Google and others on technology that would identify cars on the grid. With this, drivers could plug in their cars at work, and then sell power stored on their batteries back to the utility for peak prices. You'd buy at night when power is cheap and sell it in the day when it's expensive.

--He likes the idea of wave power, but building something that can survive the ocean won't be easy, "How do these technologies hold up in the Pacific when things get really nasty?" he posed. "What is clear is that you have constant motion in the ocean."

Correction: This story was corrected to reflect the day the briefing was held. It was Tuesday, April 30.

BrightSource Energy will build 500 megawatts' worth of solar thermal power plants for Pacific Gas & Electric in California, and the contract contains an option for PG&E to order another 400 megawatts on top of that.

The deal is the largest yet in the solar thermal world when the option is added. PG&E earlier inked a deal with Israel's Solel under which Solel will build 533 megawatts' worth of solar power for the utility. Ausra, an Australian start-up that has moved to the U.S., will build a 177-megawatt plant for PG&E. Ausra also has a contract to build a 300-megawatt facility for FPL, a Florida utility.

PG&E is required by the state to get 20 percent of its power from renewable sources (not including conventional hydroelectric power) by 2010. The utility actually already has enough, under contract terms, to hit that mark, but it is also signing contracts for the decade beyond the 2010 deadline.

Under the deal, BrightSource, based in Oakland, will build a 100-megawatt solar plant in Ivanpah, Calif. (near Barstow and close to the Nevada state line), that will start operating in 2011. The company will then build a 200-megawatt solar plant the year after that, and another one a year after that, said BrightSource CEO John Woolard. While the first two plants will go up in Ivanpah, the remaining power plants will be built in nearby Broadwell, Calif.

Solar thermal is considered by many to be one of the most promising forms of renewable energy. In solar thermal plants, arrays of mirrors collect heat from the sun and then focus that heat onto a chamber or tube filled with liquid. The liquid is used to create steam, which then turns a turbine. Excess heat captured by the mirrors can also be stored in molten salt, so that these plants can produce electricity after the sun goes down. Plants are expected to go up in the southwestern U.S., Spain, Abu Dhabi, and North Africa in the next few years.

Some have even predicted that large industrial conglomerates may build and make their own solar thermal plants. Currently, while investors fund these projects, solar thermal plants provide power over the grid to the public at large.

BrightSource has taken some of the expense out of solar thermal power plants through the design of its components. The company employs flat mirrors, rather than more expensive curved mirrors, to capture heat. The liquid that gets heated is contained in a large tower, called a heliostat, rather than a tube like in many other plants. This configuration allows BrightSource to more efficiently exploit the heat that gets gathered by the mirrors, according to the company. (The liquid used in its system is also water, which gets turned directly into steam, rather than oil, a switch that also improves thermal efficiency.) Overall construction costs are also lower than conventional thermal systems, the company claims.

An artist's rendering of how heliostats work. The things on the ground are mirrors. They focus heat on the towers, where water is boiled to make steam.

(Credit: BrightSource Energy)

The size of the power plants helps to reduce costs as well. The more mirrors and other equipment a company can install in a single location, the less power costs. Now, the largest plants can produce between 300 and 400 megawatts, and larger ones are expected in the future.

"Our target is to be cost competitive with fossil fuels" for power generation, said Woolard.

The plants, though, aren't cheap. The BrightSource plants will likely cost around $2 billion to $3 billion in the aggregate, he said.

Companies built solar thermal plants in California in the late '80s and early '90s. Conventional electricity, however, dropped in price and the state eliminated some tax breaks for solar electricity providers. The combination of factors drove some solar power providers out of business. One of those companies was Luz, which was tinkering with a flat mirror/water tower system. The Luz management team came together again years later to form BrightSource.

One cloud on the horizon? Tax benefits. Right now, California exempts solar thermal power providers from real estate taxes, which would cost these companies millions. But the exemption ends in 2009. A bill is winding its way through the state senate that would extend it to 2016.

A bigger problem, though, revolves around the possible elimination of federal tax incentives, which are slated to expire this year. "That is a bigger problem," said Woolard.

Google announced on Tuesday plans to put hundreds of millions of dollars into alternative energy. The question now is whether the company is advancing the state of the art or just imitating everyone else who is dumping loads of money into the field.

The answer is some of both.

One of the first companies to get funding from Google will be eSolar, which will make solar thermal plants based on the heliostat design. In this concept, an array of flat mirrors gathers and directs sunlight onto a water tower. The water boils into steam, which turns a turbine to make electricity.

The heliostat system is superior to other solar-thermal projects because the mirrors cost less, construction is easier, and more of the heat gathered by the mirrors ultimately gets used to make electricity.

The only problem for eSolar is that it hasn't, exactly, been an innovator during the past couple of years. Oakland's BrightSource Energy has been touting the heliostat system for a while. It is currently building a prototype plant in Israel and has already cleared many of the regulatory hurdles to build a 400-megawatt station in California.

BrightSource also has experience on its side. It was founded by Arnold Goldman, who founded Luz more than 20 years ago. Luz built some of the world's largest solar-thermal plants. In fact, plants churning more than 300 megawatts of power built by Luz years ago in the Mojave are still cranking out power.

Many of the engineers who worked on the Luz projects are at BrightSource. In a recent interview, Goldman said the company's researchers have been examining the pros and cons of heliostat systems for more than a decade.

Who is at eSolar? The chairman is Bill Gross, who founded eToys, Overture Services, and Idealab. While he has created a company for residential solar energy, most of his experience is in the Internet. Other members of the executive team have experience in solar, but it doesn't appear that they have a lot of experience in building large-scale thermal plants. It is also unclear whether the company has plans for prototypes or large-scale plants under way.

It's not like eSolar can't pull this off, but it's clear that it isn't exactly doing something original. This is really more of a venture capital-type deal than a way to push the frontiers of science. And let's not forget that there are other solar-thermal companies out there, such as Ausra, that have built prototypes and signed large scale contracts already.

On the other hand, Google is putting money into Makani Power, which wants to harvest power from high-flying kites. A few companies have experimented with this, but it's in the very early research stage. Here, Google can clearly be an innovator.

Google also wants to get into advanced geothermal energy. Geothermal already exists, but it also could use a lot more research-and-development support. Alexander Karsner, the assistant secretary for energy efficiency at the Department of Energy, says geothermal cannot provide 20 percent of the United States' electricity need,s as some advocates claim.

You can look at this in two ways: geothermal doesn't have much hope, or that it's a field ripe for turning over conventional wisdom. Thus, depending on what occurs here, Google could push the state of innovation forward.