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Remember eSolar? The Startup Wants To Raise $30M

eSolar was a high-profile startup five years ago when concentrating solar power (CSP) or concentrating solar thermal power, drew huge interest from U.S. utilities and the company touted a design that aimed to build power plants efficiently. Then it became fairly quiet in the past two years.

The company hasn't gone away, though, and is working on raising a $30 million round. eSolar has lined up nearly $13 million so far, according to its filing with the U.S. Securities and Exchange Commission on Wednesday. The company is raising money at a time when the type of technology it uses isn't in vogue in the country, though international demand remains in place.

eSolar, founded in 2007, has announced major licensing and project development deals but hasn't seen its technology being widely deployed. Some of the deals either never panned out or have faced significant delays. NRG Solar was set to develop power plants using eSolar's technology, but the decided to scratch two projects in favor of two new ones that would use solar PV instead. An agreement with Penglai Electric to build 2 GW of solar power plants in China became mired in the permitting process.

The startup initially focused on developing its own power plants. Then it changed course to license its technology and sell the equipment for producing solar electricity.

The solar startup found an investor in GE, which committed to investing up to $40 million. In April 2008, eSolar said it had raised $130 million in venture capital from investors including Idealab, Google.org, Oak Investment Partners and NRG. An eSolar spokeswoman said the company will discuss its latest funding "in the next week or so."

eSolar opened a 5-MW demonstration plant in Southern California in 2009. The project showcased eSolar's technology, which uses flat mirrors to direct sunlight onto the top of a tower to heat water and produce steam. The steam then is used to run a turbine generator to produce electricity. eSolar said it would build power plants in blocks of 46-MW each.

The technology is similar to what BrightSource Energy has developed, except that BrightSource uses larger mirrors and taller towers, a set up that BrightSource says will reduce the amount of land needed for a same-size power plant.

CSP technology has fallen out of favor in recent years as the prices of solar PV dived by over two-thirds. The difficulties of securing permits and financing for CSP projects, which are typically sized in hundreds of megawatts in order to lower costs, have also been a stumbling block for the technology. Some of the projects that have received regulatory approval also ended up using solar PV instead.

Though CSP plants can't quite compete in project costs, they do offer advantages that solar panels don't provide. These plants can produce electricity more consistently, for one thing. Combined with energy storage, they also can send power to the grid after the sun goes down. Energy storage remains too expensive for a wide deployment with utility-scale power plants that use PV. Still, the vast majority of solar power projects that California utilities have considered in the last few years will use solar PV instead of CSP.

NRG invested in BrightSource's 392-MW Ivanpah project, which is scheduled to start coming online this summer. But NRG Solar's CEO, Tom Doyle, said last month that his company isn't as keen on putting more money in concentrating solar power plants. Big utilities are no longer interested in giant solar farms anymore and want instead smaller projects that they could disperse throughout their territories to better supply power to different parts of the electric grid.

"The projects we have placed in the solar thermal space have yet to go commercial," Doyle said. "I want those projects to go commercial and have a year of operating data before we go back into the solar thermal space."

                                                                                                     

 

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