Brightsource CEO: Corporate Investors Key to Financing Clean Energy

John Woolard was a young venture partner at VantagePoint Capital Partners when he convinced the others to let him run Brightsource Energy, then a start-up.

But he may not have known how steep a climb it would be, riddled with multiple hard-to-surmount obstacles, to make the company’s vision of large-scale solar thermal projects a reality, said Stephen Dolezalek with VantagePoint. Dolezalek was an initial investor in Brightsource who introduced Woolard and credited him with tackling the challenges of raising big money for project financing, dealing with regulators and lawmakers and propelling Brightsource to where it is today.

“The guys who take the early risks and work hardest reap the most benefits,” Woolard said.

The Oakland, California-based company develops large-scale solar thermal projects for utilities and big industrials. It currently has 1.8 gigawatts under contracts with PG&E and Southern California Edison.

At the Cleantech Forum, Woolard was asked to speak about his experience raising money and bringing on line the $2.2 billion, 392 megawatt Ivanpah solar thermal project in California’s Mojave desert, which can power 140,000 homes during peak hours.

Currently, it’s the largest solar project in the world and Brightsource, along with NRG Energy and Google, is an equity investor in the project being constructed by Bechtel.

Energy economics

Describing the macroeconomics surrounding the energy industry, Woolard pointed out that:

–  declining costs for wind, photovoltaics and concentrated solar power (CSP) is a key trend that is positive for utilities and rate payer;

– asset financing continues to be robust, at almost ten times the funding from venture capital;

– large projects have very different risk profiles, which is important for people to understand, since it’s all about balancing the portfolio and only a small percentage of large projects pass muster with investors and regulators; and

– “If you talk to utility CEOs, they’ve been burned a few times, when they went with coal and had 50 percent of their assets in coals, then in the 90s, it was natural gas..… so there are a lot of utility operators who are shy about investing (in new projects). They’re taking down coal plants, raising up natural gas plants as costs come down, so just when you think you got it figured out, it changes dramatically.”

The problem: generating reliable, cheap renewable power

Woolard then described the problem he and everyone is trying to solve with projects like Ivanpah, which is how to decarbonize the power supply while maintaining reliability, at the lowest cost possible.

He talked about shifting the global energy mix from 80 percent fossil-based generation to 80 percent zero carbon power, in order to reach the 450 parts-per-million carbon milestone. He said the next 4four to five years will tell us if that’s possible or not.

“In order to (do that) we have to build a gigawatt per day. Every single day we got to put in a gigawatt of some zero-carbon power on the grid somewhere.”

Even if we put solar on every rooftop in the country, that would solve only 10 percent of the problem, he emphasized. “That’s the scale we’re talking about. To build a gigawatt a day, we need to build an Ivanpah every morning and afternoon.  (At Ivanpah) we’re building one heliostat a minute and putting a home on the grid every minute.”

By 2017 or 2018, analysis shows peak hours will shift from afternoon to evening, so he stressed the need to figure out how to make power fungible and find real physical solutions to handle and store all the energy being generated.

Why Ivanpah is a model

Brightsource’s technology uses thousands of heliostats – stationary mirrors that track the sun – to concentrate sunlight onto boilers placed on top of towers. The concentrated sunlight converts water into steam inside the boilers and the steam is either used in traditional turbines to produce electricity or in energy-intensive industrial processes such as mining, chemical processing and desalination.

Woolard said the Ivanpah project employs technology that is cost competitive and reliable – it taps the traditional power plant method of using high-temperature, high-pressure steam to turn a turbine, but it is hybrid and enables combining solar thermal with natural gas, so the typical problem of intermittent power is not an issue.

“The ability to integrate is a big driver in value and economics,” he said, pointing out that the hybrid technology is easier to integrate with the grid than solar or wind and utilities won’t have to back it up.

And with solar thermal, “when you have thermal storage, you bring not just (yourself) but others to the party. Just four to six hours of storage can allow others to integrate with the grid.”

“It’s a testament to what it takes to build a utility-scale plant. It took us two years to do. Bringing the corporate investors in is really key; they are heavily involved (in the whole process),” Woolard said.

To those looking for the next big thing, Woolard suggested they look at energy storage and reliability, since these will become critical in the next few years.

Woolard wrapped up saying that it will take a combination of solar thermal, photovoltaics, and wind, as well as significant contribution from nuclear power, to make decarbonizing our power supply possible.

 

Tags: Solar

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