Business Achievement: Growth


Gold MedalBrightSource Energy (Oakland, Calif.) for becoming the clear leader in the U.S. concentrating solar power (CSP) segment. At a time when most CSP projects proposed over the last four years in the United States have been delayed, canceled or reconfigured as solar PV projects, BrightSource has pushed ahead with its 377 MW Ivanpah Solar Energy Generating System (86% owned by NRG Energy and Google) in the southwest California desert. The Ivanpah CSP project, which was more than 75% complete at the end of 2012, uses BrightSource's proprietary power tower technology.

Thirty years ago, the principal members of BrightSource's technical team pioneered the now-mature parabolic trough CSP technology as Luz International and built the world's first commercially viable CSP projects in California's Mojave Desert. After determining about 15 years ago that trough technology would not survive as the leading edge in the United States due to water requirements in the desert environment, the BrightSource principals developed the air-cooled power tower technology which they estimate requires only 5% of the water of competing wet-cooled CSP plants. It also boasts better thermal efficiency and is expected to be more scalable.

With some of the world's largest long-term (20 to 25 years) power purchase agreements (PPAs) with Southern California Edison and Pacific Gas & Electric, BrightSource has several larger projects in development which are designed to produce twice the electrical output as Ivanpah with only 50 percent more mirrors and towers almost twice as tall as Ivanpah's three 459-foot towers.

BrightSource also operates one of the first CSP projects supplying steam for enhanced oil recovery, a 29 MW thermal project at Chevron's Coalinga oilfield in California. In SEC reports filed before BrightSource decided to cancel its 2011 IPO, the firm reported revenues-derived from sales of steam to Chevron project and from sales of equipment and services to its equity partners at Ivanpah, based on the percentage-of-completion method of accounting-of $159.1 million for 2011, an increase of more than 1,000% from 2010.

According to Jim Ivany, president, renewable power, for Bechtel, BrightSource's EPC contractor, future projects will achieve significant economies of scale over Ivanpah-and thereby lower levelized costs of electricity-since larger steam turbines, feedwater heaters and other key equipment will deliver twice the output at less than twice the cost. Additionally, procuring for multiple projects will provide price leverage with suppliers. As noted in prior editions of CCBJ, pairing thermal energy storage with CSP generation facilities would allow the solar plants to follow load and deliver more value to utilities. According to Ivany, BrightSource's next project is probably not going to have storage but some of its remaining contracted capacity will have storage.

Silver MedalRTR Rete Rinnovabile (Rome) for its acquisition and aggressive management of solar PV generating capacity in Italy. Since being acquired by private equity firm Terra Firma in March 2011, RTR grew its portfolio from 144 MW to 297.5 MW-at 117 power plants-by the end of 2012, turning over normalized annual revenues of around €160 million. RTR has become the market leader in PV electricity generation in Italy, as well as one of the largest, if not the largest, PV power generators in Europe.

But RTR isn't just rolling up existing assets and taking the income to the bank. Its business model is to become a "global solar utility" by: 1) "supporting and supervising" project developers during development and construction-an "over-supplied" segment of the value chain which only returns 3-4% on equity, according to a spokesperson; 2) stepping in to take over ownership and management at commercial operation; and 3) enhancing production and revenues through insourcing O&M and energy management, using new optimization technology and selling electricity through diverse methods including energy markets and bilateral contracts.

In 2012, RTR installed state-of-the-art monitoring systems on its entire portfolio to better track performance down to the component level. On 1.5 MW of capacity, it experimented with changing tilt angles, re-cabling and re-sorting. And for most of the year, it tested Tigo and Solaredge optimizers on a cross-section of its plants, the results of which showed an average 10% boost in production that RTR expects will continue as it deploys the technology across its entire portfolio starting in June 2013.

"We are also in the process of starting the official testing of an inverter optimizer which enables all components to work at the best of their capabilities, reduce risks of errors in the system governing the inverters, decrease component temperature and send alerts in advance in case of over-stress so that power can be cut off before damage occurs," wrote Amedeo Lori, business development analyst.