October 23, 2008 / 7:03 PM / 9 years ago

Ausra opens US solar plant, hopes first of many

LOS ANGELES, Oct 23 (Reuters) - Solar thermal power developer Ausra Inc on Thursday opened a 5-megawatt demonstration plant in California that it says will prove it can deliver on its promise of providing clean energy cheaply.

Ausra, the first to erect a solar thermal plant in California in nearly 20 years, is among a handful of so-called concentrating solar power (CSP) developers that say they will deliver utility-sized solar plants in the next three to five years that will be able to sell power at prices comparable to dirtier natural gas- and coal-fired plants.

"A lot (of companies) make a lot of claims of things they're going to do," Chief Executive Bob Fishman said in a telephone interview. "We're putting power on the grid."

Solar thermal developers like privately held Ausra say that while CSP is dwarfed by photovoltaic solar panels in generating electricity, solar thermal technology allows large plants that compete with conventional generation.

The new plant in Bakersfield, which the company says can power about 3,500 homes, brings Ausra's total output at two plants to only 7 MW. But Ausra and its backers, led by venture capital firm Kleiner Perkins Caufield & Byers, are hoping the company will build dozens of big plants by 2020.

Ausra already has one in the works -- a 177-MW project it is building for California utility PG&E (PCG.N).

Ausra's system is relatively simple. Long mirrors concentrate the sun's light onto water-filled tubes that are then superheated to create steam that turns a turbine.

Four months ago, Ausra opened a manufacturing plant in Las Vegas, Nevada to make components for its systems. Palo Alto, California-based Ausra plans to make 100 to 200 megawatts worth of solar components annually in Las Vegas, and can ramp that up quickly if demand rises. The main limit on Ausra's growth will be a backlog of orders for turbines, Fishman said.

SUNSHINE DURING A CREDIT CRISIS

With the credit crisis threatening to curtail access to financing, even for companies in the high-flying solar sector, Ausra said it isn't hurting for project money -- for now.

"We're good well into next year," Fishman said, adding that the company would need to secure financing for two yet-to-be-announced large projects in the second half of 2009.

"I hope things simmer down" by the time of those financing efforts, he said, adding that Ausra is in a better position than many emerging companies because "project finance markets secured by power purchase agreements with credit-worthy companies will come back before general unsecured debt."

In addition, a new eight-year federal subsidy for solar power allows investor-owned utilities to claim a 30 percent tax credit for solar projects, which Fishman says will lead many utilities to own solar plants rather than simply buy the power.

Utilities, with their easier access to the capital markets, may find it more favorable to have companies like Ausra build the plants and then buy them, Fishman said.

Until utility companies begin ordering large-scale solar plants, Fishman said, Ausra will strive to sign pacts for smaller-scale plants for making steam for natural gas power plants and other industrial plants. Fishman said Ausra wants to sign pacts for four or five of those projects in 2009, totaling between 100 and 150 megawatts.

"There is a potential that customers will slow down their orders... which would delay our implementation," Fishman said, adding that "we have not seen any signs of that." (Editing by Nichola Groom and Marguerita Choy)

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