Abengoa Solar signs large PPA with PG&E

In another monumental deal for the solar industry, one of the larger Power Purchase Agreements (”PPAs”) was signed between Spanish based Abengoa Solar and California Utility PG&E for a 250MW concentrated solar power plant 100 miles NorthEast of Los Angeles in the Mojave desert.


Previous deals in a nearby area of California have failed due to resistance from locals as well as state politicians. This new location will be on previously disturbed farming land and will use significantly less water than competing land use agriculture activities. The project will provide enough energy to power 90,000 homes, and more importantly further establish concentrated solar as an economic solution for larger scale utility needs. Assuming all permitting is approved, the project will begin operations in 2013.

Concentrated Solar

Concentrated Solar


1) http://www.reuters.com/article/pressRelease/idUS185482+26-Oct-2009+BW20091026

2) http://greeninc.blogs.nytimes.com/2009/10/27/water-use-by-solar-projects-intensifies/


Sharper PV cells hit 35.8% Conversion Rate

Sharp Corporation just announced a confirmed conversion rate of 35.8% for solar rays into electricity for their compound solar cell. Unlike silicon based PV, compound solar cells use photo-absorption layers made from compounds such as gallium and indium. No word was given in the release regarding the price or date to obtain the higher efficiency cells.

Sharp Image

Achieved with Triple-Junction Compound Solar Cell

The solar industry has several competing technologies that produce electricity- however these technologies seem to fall into two categories. There are producers who can produce a high percentage of their solar rays into electricity (concentrated, compound) and there are those who can produce a PV cell at a low cost (thin film.) Thin film cells can have conversion rates of approximately 10-15% but can cost less than half of competing technologies. Currently there is an inverse relationship between cost to manufacture and ability to convert electricity, both issues of course affecting the economics of solar significantly.


Source:  http://www.sharp-world.com/corporate/news/091022.html

Clean Energy Patent filings expanding despite capital markets

With less capital flowing from investors to inventors, clean energy patents are still flourishing. According to a recent report from Heslin Rothenberg Farley and Mesiti, the index of Clean Energy Patent Growth (CEPGI) had its best quarter since its inception in Q2 2009 with 274 patents granted, up from 217 year over year. Fuel cells, solar and hybrid/electric were the most active categories of patents filed. Company wise, Honda led with 14 fuel cell patents and 3 hybrid/electric patents. GM was second place with a total of 15 patents granted. Geographically, Japan led with 75 patents, and California was second with 29. This CEPGI is a good indicator of innovation and development providing future opportunities for investors and funds.


Source: http://cepgi.typepad.com/heslin_rothenberg_farley_/


Brightsource announces new Partnership with Bechtel

Source: Company

Source: Company

Brightsource announced that they selected Bechtel as their Engineering firm of choice for their 2010 Ivanpah Solar Electricity Generating System. The press release claims that the economic value of the Contract (and presumably the Plant itself) is some US$3bn. Only in December 2008, Brightsource announced that they contracted with Siemens (Siemens builds the largest Power Steam Turbine). The 123MW turbine is first large scale project of its kind.

Brightsource continues to impress with their execution. It appears that the Management Team is determined to prove its execution capabilities. Its Investor must be proud that this flagship project is continuuing to demonstrate momentum.


UMC establishes new firm for solar investments

Just 2 weeks ago, I wrote that TSMC is allocating $50 million for solar investments. Now, Reuters reported on 24 Aug 2009 that UMC, the world’s no. 2 contract chip maker is following sector leader and rival TSMC to diversify into solar-related markets.

UMC’s board approved a plan to establish a wholly owned investment company, UMC New Business Investment Corp, which would be capitalized at T$1.5 billion ($46 million) and invest in solar and LED markets. UMC will also set up a new business development center and Chen Wen-yang, a senior UMC vice president will be in charge of its operation.

The firm says that Chen will leverage his experience in the semiconductor industry to conduct evaluations on various investments. He will also be responsible for the integration, management and utilization of human resources, technology and capital. The new center aims to focus on industry sectors with high growth and profit potential. UMC New Business Investment Corp will then target timely strategic investment on the basis of the center’s evaluations.

Comment: TSMC and UMC which has combined 60% market share (TSMC – 45%, UMC – 15%) in the semiconductor chip industry is entering the solar industry which is currently in the state of massive oversupply. Is it too late to enter the industry where China is leading the solar production? Possibly they will use the same model of making chips mostly for those who do not own factories (we call them fabless companies) to the solar industry where the companies currently have their own factories/fabs. Only some companies like BP Solar and SunPower have recently outsource their solar panel production to contract manufacturers. Taiwanese companies which are well-known for contract manufacturing for items such as chips, computers, mobile phones and other electrical items will definitely eye for a piece of pie in the solar industry. Motech and Gintech Energy are currently the only Taiwanese companies in the top 10 PV companies in the world.

UMC to set up new firm for solar investments
UMC, Another Chip Company With a Solar Fund
UMC establishes subsidiary targeting LED and solar investments


BrightSource strikes deal with Chevron to build solar plant – to extract oil

This is an interesting news. On 21 Aug 2009, Chevron Corp announced plans to build a solar plant in Coalinga, CA, to create the steam that boosts production at an aging California oilfield, in a pioneering project the company aims to replicate elsewhere if it works, Reuters reported.

BrightSource Energy has been tapped by Chevron to build the 29-MW thermal plant. It is BrightSource’s first project to use its solar thermal technology for steam generation. BrightSource is better known as the startup that has inked 2.6 GW worth of deals with California utilities to sell them electricity by building solar thermal power plants.

The 2nd-largest US oil company said the solar thermal plant, which collects reflected sunlight from thousands of mirrors at a 323-foot (98-meter) tower where the water boils, will replace some steam production now powered by natural gas. Steam is injected into wells to heat up heavier oil and thus lower its viscosity to make it easier to extract.

The construction of the Coalinga plant would begin this year, with production slated to start by the end of 2010. The plant will not produce electricity. Chevron will continue to rely on natural gas to power steam production, however. The solar steam project is meant to demonstrate the technology. Chevron also has invested in BrightSource via its Chevron Technology Ventures.

Just 2 weeks ago, the first US solar power towers had produced electricity for residential and commercial use. Dubbed Sierra SunTower, the power plant can produce 5 MW, enough to power roughly 4,000 local homes at full capacity—and provide the modular blueprint for larger plants in California and New Mexico, according to eSolar, the Pasadena start-up behind the power plant.

Chevron building solar-steam plant
BrightSource Snags Chevron Deal in Stealthy Move Into Solar Steam
Chevron building solar plant — to pump oil
First U.S. solar towers produce home electricity
First U.S. “Power Tower” Lights Up California


Utilities enter solar sector

In the corporate world, if you can’t beat them, why don’t you “eat” them up? Lately a series of events of utilities acquiring solar firms or operating own solar projects have been happening. If your utility firm knows that it has to pay for energy derived from renewable energy, as governments start to enforce this “sell excess renewable energy to utilities” policy, your firm might as well acquire some companies or operate own solar projects to meet whatever target set such as 5% or 10% of energy produced must derive from renewable energy sources.

In PWC’s renewables deals 2008 report, it says that only 16% of all 2008 renewables purchases (all types including solar) were by alternative energy companies themselves. The largest category of buyers is power utility companies, who accounted for 32% of total deal value in 2008, followed by infrastructure and other financial investors (28% of deal value). See figure below (right click to view the picture if it’s too big):

PWC renewables deals 2008

You can read an article from Earth2Tech on “Intersolar: 5 Reasons Utilities Want to Build Their Own Solar Projects”. If you want to know the top utilities generating solar electricity, here’s an end of 2007 figures from Solar Electric Power Association (SEPA):


Some of the recent events and M&As:
1. On 20 Aug 2009, Wellington, NZ-based Meridian Energy has acquired San Francisco-based Cleantech America, which develops utility-scale photovoltaic solar farms. NZ’s largest electricity generator said the move is expected to allow the company to grow its US expertise and implement renewable energy projects in California, while adding solar for the first time to its portfolio. Financial details were undisclosed. The state-owned enterprise, which already develops large-scale wind and hydroelectric projects, said it eventually plans to bring solar to the New Zealand market. Meridian is also currently building the world’s southernmost wind farm in Antarctica, on Ross Island.

2. In Oct 2008, the US utilities became eligible to participate in federal renewable energy tax credits when the $18 billion tax credits package was passed. Previously, utilities were not eligible to receive the credits. Duke Energy is one of the utilities to be involved in owning and operating their own plants (see here) that sets it apart from other utilities that have opted to buy solar power. But more utilities could enter the solar power generation business themselves due to the legislation. See separately the news from Solar Energy Industries Association (SEIA) here regarding the federal solar tax credit.

3. In February 2009, PSE&G, a subsidiary of Public Service Enterprise Group (NYSE:PEG), announced plans to spend $773 million on 120 MW of solar photovoltaics, marking one of the first major projects by a U.S. utility to take advantage of federal solar incentives.

4. In July 2009, on the heels of news that New Jersey plans to double its solar power installations, New Jersey-based Atlantic City Electric and Jersey Central Power & Light said they are issuing a request for proposal to secure solar renewable energy certificates. The solar subsidiary of New Jersey’s largest utility Public Service Electric & Gas had a $515 million plan approved by state regulators to install 80 MW of solar power through 2013. The move would effectively double the state’s amount of solar power, making it America’s second most solar-powered state, only behind California.

5. On 10 Aug 2009, Italy’s largest electric utility Enel said its 6 MW photovoltaic plant, located in Montalto di Castro in the Viterbo province, has been completed. The plant marks the largest such facility in Italy and indicates the Rome-based company is continuing to grow its renewable energy business. The plant, covering nearly 10 hectares (24.7 acres), is expected to generate more than 7 million KW hours per year—enough for the power needs of 2,700 households. The facility’s solar energy is expected to prevent the emission of about 5,000 tons of carbon dioxide annually and its panels were supplied mainly from Sharp Solar. Enel also has a 3.3 MW plant in Salerno, Italy, which was the country’s first large-scale photovoltaic plant established in 1993 and is still operational.

It will be interesting to see how many more solar firms will be gobbled up by utility firm or how utility firms will operate their own solar plants; just as interesting to see how oil firms will diversify its income from renewable energy sources. On the other hand, solar firms are also fighting back by entering the utilities sector, earning themselves the name “solar utilities”, i.e. see First Solar’s aggressive move into utility projects. Doesn’t this remind you of the telecoms’ era of wireless versus landline competition/consolidation? We’ll see how then the utilities sector will evolve within the next decade.

Meridian Energy gets into solar, acquiring Cleantech America
Utilities to Hit Solar Scene
Duke Chops $100M Distributed Solar Project in Half
New Jersey utilities continue to pile on ambitious solar plans
Italy’s largest PV plant goes live