Solar :

BrightSource's Desmond says Ivanpah facility a model for future projects

How does the expansion of distributed generation in the United States impact large-scale solar project investments? During today's OnPoint, Joseph Desmond, senior vice president of marketing and government affairs at BrightSource Energy, discusses opportunities for future investments in solar technology on the heels of last month's Ivanpah solar facility opening. BrightSource is an equity investor in Ivanpah. Desmond also talks about the importance of Department of Energy loan guarantees for Ivanpah -- and future projects his company is considering.


Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Joseph Desmond, senior vice president of marketing and government affairs at BrightSource Energy. Joe, thanks for coming on the show.

Joseph Desmond: Thank you for having me.

Monica Trauzzi: Joe, BrightSource is an equity investor in the highly publicized Ivanpah Solar Facility, which opened to big headlines earlier this month.

Joseph Desmond: Sure.

Monica Trauzzi: DOE assisted the project with a $1.6 billion loan guarantee. How much pressure was there to not have a Solyndra-like outcome on this project?

Joseph Desmond: Well, I'd certainly say there's always pressure to deliver on what the expectations are. But in the case of Ivanpah, BrightSource was the original developer and is the provider of the technology and the solar field and the solar field control. We have other equity partners like NRG and Google. But with respect to the loan guarantee, unlike Solyndra we rely on something called project finance, which means that those projects did not move forward until they had power purchase agreements between 20 and 25 years with creditworthy off-takers. In this case PG&E has two of the towers and Southern California Edison has the other tower. So in that sense it's very different, a different risk profile. It's really one of performance, and so the project as you know is now operational.

Monica Trauzzi: In terms of the technology, is Ivanpah a model for what can be done elsewhere? Or at this point has the technology already evolved so rapidly that a project of this nature is no longer relevant or would no longer to be relevant to be built new starting today?

Joseph Desmond: No, I actually think it's quite the opposite. So the tower technology itself is an evolution of previous trough technology, and the reason we went to the tower was to achieve higher temperature and higher pressures, which allow us to use more efficient turbines. But when you look at the technology, what we're really talking about is being able to create solar steam, and that steam can be used for certainly renewable energy, but also enhanced oil recovery, desalinization and industrial market processes. So as we think about the technology itself going forward, there are still opportunities to improve both in its performance, in the ability -- how it's controlled, in the optimization. So there's still room for improvement.

Monica Trauzzi: So would you look to replicate this project?

Joseph Desmond: In fact we have several projects in the pipeline that are based on the tower technology, one in Southern California going through the permitting process. But we're also working internationally, and as BrightSource we're now very much a technology company. So we provide the solar field engineering services, layout and design, and the core software that controls that, and we look to partner with other companies.

Monica Trauzzi: How important are those DOE loan guarantees, though, in the future as you look towards those projects?

Joseph Desmond: Well, I would separate them out. I mean, the DOE loan guarantee's purpose was to help commercialize innovative technologies at scale that otherwise could not secure commercial financing at reasonable terms. So it was instrumental in us being able to actually build Ivanpah. The question going forward was if we're introducing a new or innovative aspect or element into a project, it may actually be appropriate for a loan guarantee. But as we look elsewhere around the world, the critical part is we've demonstrated the technology, that it's working and it's working at scale.

There's a couple other areas. The innovative aspect, though, is that you could take what we've done and look at, for instance, maybe the advanced fossil fuel solicitation, because you can take that solar steam and you can improve the performance of either natural gas or coal plants. And that may very well be a good way to help reduce the carbon intensity.

Monica Trauzzi: So are you looking actively right now at other ways to secure loans?

Joseph Desmond: Absolutely, sure. Not only that, there's also been a lot of work that's been done in this area by the DOE, by some of the labs, examining what it would take, what the performance criteria are, what are the applications for either boosting the performance during hot temperatures or reducing the overall carbon intensity by displacing some of the traditional fossil fuel.

Monica Trauzzi: So what has BrightSource identified as the greatest opportunities for future investments?

Joseph Desmond: Well, certainly continued investment in renewable energy, but internationally. So anywhere we look around the globe where you have high sun and really pressure to decarbonize the environment, so China, Latin America in some cases for mining, the Middle East region. South Africa is a tremendous market opportunity where many of the concentrating solar power providers are focusing their attention.

Monica Trauzzi: How does distributed generation and the active expansion of DG sort of affect your business plans and your outlook on where to invest?

Joseph Desmond: So that's actually one of the interesting aspects of what does utility-scale concentrating solar do. I think most of your readers know we don't make PV panels; we use mirrors to focus that sunlight. But we're talking about using synchronous generators, and they provide real value to the grid in terms of voltage support, frequency control, but more importantly when you're able to marry that technology with thermal energy storage, you can actually store the sun's energy and continue to produce at night. More importantly, though, that's the type of flexibility and dispatchability that the grid values more as you see more distributed generation resources actually appear on the grid.

So although we are a different type of solar and it has different attributes, they very much are used to balance out the requirements of the grid to maintain reliability. So we actually see the need that they work well together.

Monica Trauzzi: How would you describe the attitude in Congress towards renewables and solar more specifically, and do you see that potentially posing a hurdle down the line as you look to expand and build new projects?

Joseph Desmond: Yeah, well, I think certainly I'd like to think that the perspective in Congress is improving as the technology continues to come down in cost, as you see success stories like Ivanpah out there, and that the work that's being done by the DOE actually yields real results. I mean, it was a $2.2 billion project, a $1.6 billion loan guarantee, but that's a loan that's being paid back with interest. And so in that sense it's certainly an investment, but more importantly the opportunity to apply the technology, not only here in the U.S. where there are market applications but internationally, really is something that's good for the American taxpayers.

Monica Trauzzi: All right, Joe, we'll end it there. Thank you for coming on the show.

Joseph Desmond: Great, thank you. Appreciate it.

Monica Trauzzi: Nice to see you. And thanks for watching. We'll see you back here tomorrow.

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