California Gold: BrightSource Raises $150 Million for Solar
Millions of Californians could get their electricity from a sunny corner of the state one day thanks to a massive plan by a company to build a series of solar power plants in the Mojave Desert. BrightSource Energy on Thursday says it has raised $150 million to help make its plan a reality.
The money god has been good to the company lately. Including the latest round, the Oakland, Calif., startup has raised more than $300 million since its inception four years ago. But BrightSource wants to build 14 power plants, totaling 2.61 gigawatts in generation capacity, and will need to raise billions of dollars to complete them.
Earlier this year, the federal government agreed to provide BrightSource with $1.37 billion in loan guarantees to build its first U.S. project, a 400-megawatt project consisting of three power plants in the Mojave Desert. BrightSource is now working to get the final permits from California and the federal Bureau of Land Management and plans to start construction this fall, says Keely Wachs, a company spokesman.
The company has signed contracts to provide 1.3 gigawatts of solar-thermal power to the Pacific Gas & Electric Co. and another 1.3 gigawatts of power to Southern California Edison, which together will be enough to serve about 1.4 million homes. BrightSource's ability to ink huge contracts with these California utilities has raised its profile considerably over the past two years. Many analysts consider it a likely candidate to go public.
How It Works
BrightSource is building solar-thermal power plants, which generate electricity from the sun's heat. It plans to set up fields of flat mirrors that concentrate sunlight and direct it to a water tower, where the heat will boil the water and bring it up to 500 degrees Celsius. The steam from the boiler will then get piped down the tower to run a turbine nearby and produce electricity.
The company has been running a project in Israel to demonstrate the technology, which is not commonly used to generate solar power today. Other companies are developing similar technologies and planning projects worldwide, particularly in Spain.
Alstom, an 82-year-old French manufacturer of power-plant equipment, and the California State Teachers Retirement System ponied up the latest round of cash. BrightSource will largely use the round to run its business, including internal expansion, although part of it could be used to build power plants, Wachs says.
Nathaniel Bullard, an analyst with Bloomberg New Energy Finance, says Alstom's investment demonstrates that the young solar industry is attracting a growing number of established players in the energy business.
The company plans to complete its 14 power plants by 2016, but achieving that goal could prove difficult. The regulatory process for its first project already is taking longer than expected.
Increasingly, solar power-plant developers are encountering resistance from local communities that don't want miles and miles of solar fields taking up wildlands or using too much water and other resources.
The state is requiring utilities to get 20 percent of their electricity from renewable sources by the end of this year. Legislation is pending to mandate 33 percent by 2020.
More than half of the states in the country have similar mandates, which could boost the opportunities for companies like BrightSource if they can successfully complete projects on time.