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BrightSource IPO Raises Questions on CSP vs. PV
By RONA FRIED, PH.D.
Rona Fried, Ph.D., is
president of Sustainable
Business.com, the online
community for green
business: daily green
business and investor
news, green jobs and
green investing newsletter, The Green Investor.
Contact Fried at rona@
sustainablebusiness.com.
Consult your financial
advisor before making
any investment.
In April, concentrating solar developer BrightSource Energy;of;Oakland,;Calif.,;filed;for;a;$250;million;ini- tial public offering. The offering highlights some of the
tensions in the solar industry between concentrating solar
power (CSP) and photovoltaics (PV), between large utility-scale solar and smaller distributed solar, and between
utility-scale solar and conservation groups.
Although;it’s;a;risky;investment,;a;successful;IPO;for
BrightSource would be an important milestone for the concentrating solar industry. Google invested $168 million in
BrightSource;last;year;to;gain;a;stake;in;its;392-megawatt
(MW);Ivanpah;solar;project,;now;under;construction;on
3,500 acres of public land in the Mojave Desert, helped
by a $1.6 billion loan guarantee from the Department of
Energy;(DOE).;Construction;began;in;2010;for;comple-
tion by 2013.
Founded in 2004, BrightSource raised $176 million in
2010 and $201.7 million more in early 2011. That’s a lot of
money for a company with only one project completed, a
6-MW;facility;in;Israel.
BrightSource says it has 14 power purchase agreements
totaling 2. 6 gigawatts (GW), with California’s two larg-est;utilities,;Southern;California;Edison;and;Pacific;Gas;&
Electric.;And;it;claims;to;have;110,000;acres;of;land;avail-
able in its development portfolio, which could produce 11
GW of electricity.
For 2010, BrightSource reported a loss of $71.6 million
on;$13.5;million;in;revenue.;Revenues;were;up;slight-
ly;from;2009;($11.57;million),;when;it;declared;a;loss
of $43.78 million.
Setbacks
CSP has experienced setbacks in recent months.
The;DOE’s;environmental;analysis;identified;“ideal”
sites;on;public;lands;for;large;solar;plants,;but;after;many
locations were announced and companies awarded loan
guarantees, there was increasing pushback from the environmental and native communities.
In;April,;the;same;month;BrightSource;announced
the;IPO,;the;Department;of;the;Interior’s;Bureau;of;Land
Management told the company that the U.S. Fish and
Wildlife Service would have to issue a “revised biological
opinion”;before;Ivanpah;could;proceed;with;its;second
and third phases.
The;project;faces;lawsuits;that;question;whether;the;per-mits;comply;with;federal;laws:;the;National;Environmen-tal Policy Act, Federal Land Policy Management Act, the
National Historic Preservation Act, the Native American
Graves;Protection;and;Repatriation;Act;and;the;Endan-gered Species Act.
CSP has other serious challenges:
•;CSP;looked;cheap;when;the;traditional;photovoltaic
industry suffered from a polysilicon shortage that sent
prices sky high, but now PV manufacturers face an oversupply and prices have dropped dramatically.
•;Investors;unfamiliar;with;the;history;of;Solar;Electric
Generating;Systems;(SEGS);often;consider;CSP;to;be;an
unproven technology, and therefore a riskier play than PV.
•;CSP;requires;water;for;cooling;its;condensers.;That’s
a problem in the sunny desert environment.
Despite these challenges, CSP technology has impor-tant;advantages:;It;delivers;high-quality;power;with;fewer
intermittency issues, and can provide baseload power if
energy storage is incorporated.
In;August,;BrightSource;unveiled;SolarPLUS,;a;power-tower design incorporating a two-tank molten-salt storage
system;to;produce;power;long;after;sunset.
Two More CSP Plants
Also in August, BrightSource applied for permits for two
more plants that would add another 500 MW. The Hidden
Hills;SEGS;would;be;on;private;land;about;40;miles;south
of;Ivanpah.
Since;DOE;loan;guarantees;expire;for;large-scale;renew-able projects at the end of September, Hidden Hills would
have to be financed without government support.
BrightSource says Hidden Hills would employ its next-generation solar thermal tower technology, which reduces
the;amount;of;land;required;by;33;percent;or;more.;By;using
a taller tower, it can place rows of heliostats closer together.
The new design also places mirrors on poles driven into the
ground (rather than on concrete foundations), to avoid
grading and excavation, preserve the natural contours of the
land and allow vegetation to grow among the heliostats. An
air-cooling system, which condenses steam in a closed-loop
cycle, would preserve precious desert water.
It’s;good;to;see;that;a;company;like;BrightSource;can;so
quickly;innovate;in;response;to;environmental;concerns,
but;I;still;wonder;why;public;policy;focuses;on;opening
thousands of acres of sensitive public lands rather than
streamlining installation of distributed solar on existing
roofs and disturbed lands.
Others;also;question;this;approach.;A;Colorado;group,
Solar;Done;Right,;issued;a;report,;“U.S.;Public;Lands;Policy:
Wrong;From;the;Start”;( tinyurl.com/wrongstart),;which
asks federal agencies to take a close look at the advantages
of;PV;on;previously;disturbed;land,;rooftops;and;parking
lots near transmission substations. This would obviate the
need for expensive new transmission lines, which also cut
through wildlands.
With proper incentives, like the feed-in tariffs in Ontar-io,;Germany,;Italy;and;now,;Japan,;solar;would;blanket;the
nation;quickly,;while;creating;local;jobs;and;generating;rev-enue and energy independence. ST
