Stealth solar power plant startup Ausra has taken off the wraps, confirming that it has scored more than $40 million in funding from leading green tech investor Vinod Khosla’s Khosla Ventures and marquee VC firm Kleiner, Perkins, Caufield & Byers. Green Wombat sat down with Ausra CEO Peter Le Ličvre and executive vice president John O’Donnell recently at the company’s Palo Alto offices to talk about their plans to jump into the increasingly competitive market for Big Solar.
Ausra, which relocated to Silicon Valley from Sydney last year, is beginning construction of a 6.5-megawatt demonstration power plant in Portugal and says its close to revealing agreements for massive-megawatt solar power stations with major U.S. utilities. "You’ll see announcements of those in the coming weeks," says Ausra executive vice president John O’Donnell, an American who helped hook the Australians up with Khosla and Kleiner Perkins’s Ray Lane. (In an upcoming story that will appear in the October issue of Business 2.0, Khosla, who sits on Austra’s board, told the magazine that Ausra has been negotiating with California utility PG&E (PCG).)
As solar power companies flock to California and the Southwest to win contracts with the big utilities, the name of the game is developing greenhouse gas-free technology that can deliver electricity at prices competitive with natural gas and other fossil fuels. Some companies, like San Francisco’s GreenVolts and Melbourne’s Solar Systems, are taking a high-tech approach, creating cutting edge technology such as concentrator photovoltaics that rely on sophisticated solar cells. Others, like Ausra, are putting twists on a tried-and-true technology like solar troughs to drive down costs.
"It’s this least cost mentality applied throughout," says Le Ličvre as Ausra co-founder and chairman David Mills meets with visitors from China down the hall. "All the materials
are really commodities. We’re not waiting for our industry to scale
before the cost comes down."
Mills, a noted solar scientist, conceived of Ausra’s compact linear fresnel reflector technology, or CLFR, at the University of Sydney in the 1990s. In traditional parabolic solar trough systems, curved rotating mirrors sit high off the ground and focus the run’s rays on tubes of synthetic oil suspended over the solar arrays. The hot oil creates steam which drives an electricty-generating turbine. Austra’s innovation is that it uses commodity flat mirrors that sit low to the ground. The refectors concentrate sunlight on water-filled pipes that hang over the mirrors. As the water is heated up to 545 degrees fahrenheit (285 celsius) the resulting steam drives a standard turbine. According to Ausra, CLFR dramatically lowers the cost of solar power production as the mirrors arrays use standard glass and require signficantly less steel than parabolic troughs, allowing them to be be pre-assembled in robotic factories at half the cost. The arrays also take up less ground space and because they sit near the ground are more resistance to wind damage and are easier to clean.
"The mindset that says cheap comes first, cost comes first and look to mass production technologies as a way of reducing cost has informed a lot of the fundamental development direction here," says O’Donnell. Though the efficiency of solar trough technology is relatively low compared to photovoltaics, he argues that all that matters is how cheaply a solar power plant can produce green electricity per kilowatt hour. Ausra also is working on technology to store solar energy to extend the operating times of its plants.
Adds Le Ličvre: "Parabolic trough power plants are well established globally and they’re great; they’re just too expensive. What we’ve done is just apply a different concentrator technology to basically doing the same thing. Unlike some of our competitors that are embarking on fairly advanced
technology designs that they have yet to prove will work, saturated
steam is pretty basic stuff."
While a newcomer to Silicon Valley, Ausra is well known in its native Australia, where the company operates as Solar Heat and Power. Co-founded in 2002 by Le Ličvre and Mills, Solar Heat and Power has built a prototype power plant in New South Wales that will begin generating electricity by year’s end, according to the company. But the Australian government’s tepid support for renewable energy in a coal-dominated country and a somewhat risk-adverse local venture capital community made scaling up a challenge. After a $A75 million government grant went to competitor Solar Systems last year, the company decamped for Silicon Valley. (Another Australian solar power company, EnviroMission, also has turned to the U.S. market.)
In an April interview with Australian television program Four Corners, Khosla predicted Ausra would be building a gigawatt’s worth of solar power plants within the year. Le Ličvre downplayed that expectation but said it was not unreasonable to think the company might have close to a gigawatt of signed contracts in the hopper in the near future.
Ausra faces competition from Israel solar trough company Solel, which has won a contract from PG&E to produce 553 megawatts of electricity, as well as from BrightSource Energy, founded by American-Israeli solar pioneer Arnold Goldman. BrightSource, which has developed a distributed power tower technology, is negotiating a 500-megawatt contract with PG&E. Stirling Energy Systems, meanwhile, has deals with Southern California Edison (EIX) and San Diego Gas & Electric (SRE) to produce up to 1.75 gigawatts of solar electricity.
Those plants are expected to be built in California’s Mojave Desert, where a looming obstacle is the lack of sufficient transmission lines to move all that green electricity to distant cities. "Because we have a substantialy lower-cost collector technology, we can place plants where you might not expect them as a way of addressing tranmsission problems," says O’Donnell. "We don’t have to be in the optium solar location to be in the money. We can place things where the transmission is available."
Like most of its competitors, Ausra still must prove that its technology and Henry Ford approach to large-scale solar will deliver green elecricity that can displace fossil fuels in the fight against global warming. But it’s clear that we’re reaching a tipping point where the technology, financial resources and demand for renewable energy will transform Big Solar from a decades-old desert mirage into a reality.