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.

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.