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Chasing the $un

Solar projects are becoming hot investments.

Fortnightly Magazine - March 2011

component in developing our projects,” he says. “We’re investing in 30-year assets, so we need as much regulatory and political certainty as we can get. That obviously helps with the project financing as well.”

Federal support is playing an even greater role in new CSP projects. Though thermal technologies have been demonstrated on a relatively small scale, large plants featuring new CSP designs must rely on loan guarantees from the DOE to secure financial backing. One of the furthest along is Oakland-based BrightSource Energy’s 392-MW Ivanpah Solar plant, which employs a new solar tower technology.

Located in California’s Mojave Desert, Ivanpah will be the world’s largest solar plant when it begins operations in 2013. BrightSource will sell its output to both Southern California Edison and PG&E.

Unlike trough-based designs, the solar tower design employs flat mirrors on heliostats that follow and direct sunlight to the receiver tower. The company says a tower system has much lower heat losses because the heat-collecting pipes are concentrated in the receiver and not dispersed around the solar field.

The project received a conditional $1.37 billion DOE loan guarantee to help secure financing. NRG Solar will be investing up to $300 million over the next three years, and an NRG subsidiary will operate the plant once it goes commercial. In addition to the loan guarantee, NRG, BrightSource and other investors will also benefit from the federal government’s 30 percent tax grant and a five-year accelerated depreciation schedule.

“For this project we had to leverage the DOE loan guarantee, but we believe bank financing for the BrightSource technology will be available within the first year after commercial operation in 2013,” Doyle says. “What we liked about this project is thermal solar is more grid friendly than PV. We’re also sensitive to environmental concerns, and the design includes dry cooling, which addresses the water consumption issues associated with traditional CSP. We’re taking a long-term ownership position in this project, so sustainability is important to us.”

The facility is the first of several Ivanpah phases, and BrightSource expects the learning curve will ultimately reduce construction and O&M costs. The company also plans to move from the initial 130 MW per-tower design to an advanced, 250-MW supercritical steam receiver that will enhance overall efficiency and output. Molten salt storage can also be added if and when it’s needed.

“Compared to PV, CSP offers a higher capacity factor in terms of its relative output, so it delivers the power in a way utilities are more familiar with,” says Charles Ricker, senior vice president of business development at BrightSource. “As opposed to PV, we believe IOUs are more interested in owning and operating a plant like this, but they’re not early adopters. They’re more interested in letting others develop the plant, and then they acquire it after it’s operating. Or perhaps an unregulated subsidiary buys it.”

But in the final analysis, Ricker adds, every renewable resource has its place in the country’s electrical generation mix.

“PV is modular, which makes it much more nimble. The plants are smaller and you don’t have the