BrightSource Wins Bid for Solar Trust's 500-Megawatt Project

Andrew Herndon, Bloomberg
June 22, 2012 | 2 Comments

BrightSource Energy Inc., the U.S. solar-thermal developer, was the top bidder at an auction today in Delaware to buy an unbuilt California power plant proposed by the bankrupt Solar Trust of America LLC.

“BrightSource has been confirmed as the winning bidder for the Palen Solar Power Project,” the Oakland, California-based company said today in an e-mailed statement. “Once the court approves the sale and the conditions are satisfied, the acquisition will be complete.”

The winner of the auction couldn’t immediately be confirmed in court papers.

Palen, located in Desert Center, California, is expected to have a 500-megawatt generating capacity and is one of three unfinished projects Solar Trust plans to sell.

The others are the 1,000-megawatt Blythe project in Riverside County, California, which is fully permitted and has grid interconnection rights, and another 500-megawatt project still in the planning stage in Amargosa Valley, Nevada.

Solar Trust planned to use arrays of trough-shaped mirrors at Palen to focus sunlight on a fluid-filled pipe to power a steam turbine and generate electricity.

BrightSource, which is building its $2.2 billion Ivanpah plant in California’s Mojave desert, uses a different solar- thermal design. Its power-tower system uses mirrors to focus sunlight on a boiler atop a central tower, generating steam to produce electricity.

Bankruptcy Filing

Solar Trust and other units filed Chapter 11 on April 2 when rent was coming due on the 7,000-acre Blythe project. The company, based in Oakland, is a joint venture of the insolvent German company Solar Millennium AG and steelmaker Ferrostaal AG.

The court on June 15 approved BrightSource as a stalking- horse bidder for Palen, enabling it to submit a minimum bid that other buyers would have to surpass. The price could be as much as about $30 million, if all contingent payments are made, according to court documents.

A hearing to approve the sale will take place June 27. Bids for the remaining projects haven’t been published by the court.

The case is In re Solar Trust of America LLC, 12-11136, U.S. Bankruptcy Court, District of Delaware (Wilmington).

2 Comments

ANONYMOUS
June 26, 2012

I agree with you that the CSP industry is alive and well, but BrightSource also needs scale to make the numbers work for its "solar tower" technology. Adding 500MW will certainly help. BrightSource has convinced its investors that solar tower technology is the solution for CSP because its business model, which is based on replication, and multiplication, promises to be the lowest cost solution, especially when standardized manufactured compenents start rolling out of the factory. The problem they and others have been having so far (they are not the only ones invested in solar tower technology) is actually having enough scale to prove it. All commercial examples of CSP plants using solar tower technolgies, which have been built to date, have cost more than double that of parabolic trough systems. In theory, solar tower technology should cost less, but in practice it costs more. I do admire their conviction though, they know they need GW size orders to make the numbers work and they are determined to get there. So long as investors and government sponsors are willing to subsidize the cost, they should be able to stay afloat long enough to prove the theory works. Solyndra and Solar Millenium had similar business models, so the road ahead may not be as easy at it looks. No doubt the pressure is on and time will tell how successful the plan will turn out.

Dr. Jeffery Johnson
June 26, 2012

Despite all the hype about a failing industry, this article shows that renewable energy projects are a true commodity that will be bought, sold, traded and unfortunately at times auctioned off. At the end of the day, there will be 500MW in Palen Ca. There will be 1GW in Riverside. The industry is healthy and will become healthier as the market shakes out the chaff