California utility in big solar thermal deal

LOS ANGELES (Reuters) - Southern California Edison said on Wednesday it signed a series of contracts with BrightSource Energy for the supply of 1,300 megawatts of clean solar thermal power.

The California utility, a unit of Edison International, continues its practice of buying power from renewable power developers like BrightSource rather than owning the generation assets itself, said Stuart Hemphill, head of SCE’s renewable power efforts.

Privately-held BrightSource has agreed to build and place in commercial operation seven projects. Once completed, the projects will be able to serve about 845,000 households during peak-demand afternoon hours in Southern California.

Solar thermal power plants use the sun’s heat to create steam that powers a turbine. They are typically much larger than plants made up of photovoltaic solar panels, which use sunlight to create electricity.

SCE said it buys more renewable power than any other utility, and renewables now account for 16 percent of its delivered power. Wednesday’s announcement is part of the company’s effort to comply with a state mandate that requires utilities to produce 20 percent of their power from renewables such as wind and solar by 2010.

“We see solar as the large untapped resource, particularly in Southern California,” Hemphill said. “We are eager to see it expand in our portfolio” of power generation.

The first tranche of solar power in the pact with BrightSource will be 100 megawatts from a project to come on-line in 2013 in Ivanpah, California. PG&E Inc’s Pacific Gas & Electric Co utility has already contracted with BrightSource to take 300 MW of Ivanpah’s output.

Ivanpah is in the Mojave Desert near the Nevada border, about 75 miles south of Las Vegas. The land is owned by the U.S. Bureau of Land Management.

If BLM and California permits are in hand as the companies expect, ground can be broken at Ivanpah in the fourth quarter of 2009, said BrightSource vice president Tom Doyle.

BrightSource CEO John Woolard said the 400-MW Ivanpah project will create about 1,700 full-time jobs in construction and another 3,500 jobs to last the 40-year life of the plants.

Six 200-MW projects will also be located in the Mojave area but specific sites have yet to be chosen.

In 2014, 200 MW are to come on-line, followed by 400 MW in 2015 and 600 MW in 2016, said Doyle. Sites will be chosen four years before each tranche becomes operational.

Total cost of the solar towers -- which have been demonstrated in Israel, where BrightSource was founded -- was not disclosed.

The agreement, which the companies claim is the world’s largest solar deal, requires approval from the California Public Utilities Commission.

BrightSource’s backers include VantagePoint Venture Partners, and arms of Google oil giants BP and Chevron, Statoil, Draper Fisher Jurvetson, DBL Investors and Black River. (Reporting by Bernie Woodall, Euan Rocha and Nichola Groom, editing by Dave Zimmerman, Bernard Orr)