BrightSource wins final OK for major solar plant

LOS ANGELES Thu Oct 7, 2010 3:38pm EDT

A general view of the Solar Energy Development Center (SEDC) is seen in Rotem Industrial Park near the southern town of Dimona June 12, 2008. REUTERS/Ronen Zvulun

A general view of the Solar Energy Development Center (SEDC) is seen in Rotem Industrial Park near the southern town of Dimona June 12, 2008.

Credit: Reuters/Ronen Zvulun

LOS ANGELES (Reuters) - BrightSource Energy Inc said Thursday it won final approval for a $1.7 billion-plus, 370-megawatt solar energy plant in Southern California, the latest in a string of large-scale projects greenlit for the most populous state.

The license is the last step before BrightSource -- whose backers include BP Plc, Chevron Corp and venture capitalists Draper Fisher Jurvetson -- can begin construction of the plant, which should start producing energy at the end of 2012.

The U.S. Interior Department's Bureau of Land Management gave the go-ahead for the plant, which will employ solar thermal technology in Ivanpah, near the border with Nevada.

Planning for the Ivanpah plant and other similar solar projects has taken years, even as President Barack Obama and California Governor Arnold Schwarzenegger have declared clean energy a priority. Last month, California raised its renewable-energy target to 33 percent by 2020.

As deadlines for obtaining federal funding for the projects loom, a group of major, proposed solar plants is securing final approvals and licensing. Many of the plants are on a "fast track" that relies on improved coordination among the various state and federal agencies overseeing the process.

Besides helping the environment, the projects create jobs, a boon during a tough economy. BrightSource said its engineering contractor, San Francisco-based Bechtel Corp, will hire around 1,000 workers during peak construction.

The Ivanpah plant costs north of $1.7 billion, or more than $4,600 per kilowatt, according to industry sources. In contrast, it costs about $900 per kW to build a combined-cycle natural gas plant and about $1,800 per kW to build an onshore wind turbine.

California has approved several large-scale solar plants in recent weeks, including a 1,000 mW plant from Chevron Corp and Solar Millennium AG. That plant will be located in Blythe, California.

DOING IT WITH MIRRORS

The Ivanpah facility will use angled mirrors to direct sun onto receivers on three towers. Liquid in the towers heats up and powers a steam engine, which creates the electricity.

Loan guarantees totaling $1.37 billion from the Department of Energy will help finance it. If BrightSource started construction by year-end as planned, it would also qualify for a 30-percent grant from the Treasury Department under stimulus-funding provisions.

BrightSource already has deals to sell about two-thirds of the energy the plant produces to PG&E Corp's Pacific Gas & Electric Co and one-third to Edison International's Southern California Edison.

During peak sunlight hours, Ivanpah will provide enough electricity to power more than 111,000 homes.

Ivanpah is highly controversial among environmentalists, who are concerned that it might damage the habitat for the endangered desert tortoise, among other issues.

Oakland, California-based BrightSource develops and builds solar plants. Its investors include VantagePoint Venture Partners, Morgan Stanley, Cargill Inc's Black River Asset Management LLC, Draper Fisher Jurvetson, Google Inc.'s Google.org, BP's BP Alternative Energy and Chevron's Chevron Technology Ventures.

Analysts expect BrightSource to file for an initial public offering in coming months.

(Editing by Edwin Chan and Gerald E. McCormick)