eSolar, the solar energy startup founded by Idealab’s Bill Gross and backed by Google, has signed a 20-year contract to supply utility Southern California Edison with 245 megawatts of green electricity.
The solar power plant will be built in 35-megawatt modules, with the first phase set to go online in 2011. As Green Wombat reported in April, eSolar scored $130 million in funding from Google.org, Google’s (GOOG) philanthropic arm, and other investors to develop solar thermal technology that Gross claims will produce electricity as cheaply as coal-fired power plants.
Like Ausra and BrightSource Energy – which have deals with PG&E (PCG) – eSolar will use fields of mirrors to heat water to create steam that drives electricity-generating turbines. Gross says that eSolar’s software allows the company to individually control smaller sun-tracking mirrors – called heliostats – which can be cheaply manufactured and which are more efficient and take up less land than conventional mirrors. According to Gross, that means eSolar can build modular power plants near urban areas and transmission lines rather than out in the desert, lowering costs.
eSolar’s cost claims got Southern California Edison’s (EIX) attention. “It was a competitively priced proposal,” Stuart Hemphill, the utility’s VP for renewable and alternative power, told Fortune. “We found the eSolar team very competent, motivated and willing to do a deal.”
“When it comes down to different solar technologies, competitive pricing is going to be an important part of the equation,” he adds. “They do offer a unique solution.”
eSolar is keeping mum about the exact location of the power plant, only saying it will be in the Antelope Valley region of Southern California.
One potential hitch: Getting eSolar’s electricity to Southern California Edison will depend on the construction of a major new transmission line. That line, the Tehachapi Renewable Transmission Project, has been partially approved to date.
With the eSolar deal, the utility is hedging its bets. Back in 2005, Southern California Edison signed a highly publicized deal with Phoenix’s Stirling Energy Systems to buy up to 850 megawatts of solar electricity from massive solar power plants to be built in the Mojave Desert. (Around the same time, San Diego Gas & Electric (SRE) signed a power purchase agreement with Stirling for up to 900 megawatts. ) Stirling is still perfecting its technology and has yet to file a license application for its first plant. But the company received a $100 million investment earlier this year and Hemphill says Stirling is moving forward.
“We expect that Stirling will meet its contractural obligations,” he says. “Solar thermal is definitely an emerging industry. It’s too early to tell which technologies will be the winners over the long run. It’s a time to be having a portfolio of different technologies so we can figure that out.”
Green Wombat 
Damn man! If all them there mirrors come to be built they just might be enough of them for you Californians to stare at yourselves in a less obvious way 24/7!
VCs are so dumb to back such big projects that can never make them 10X return on their investment within 5-10 years. Solar thermal energy is not new nor patentable.
Well I wish them all the luck but we will have to see if they can really produce. They seem to have some good ideas but I doubt they can make it with their smaller is better approach. As I understand it they are going to have a turbine for each 35 MW’s, which basically means they going to build a bunch of small power plants, even if they do link them together. Most of the other players in the game are going with a bigger is better approach to try and drive down costs. I am pretty sure I saw one of their test facilities just east of Palmdale the other day on Avenue T. It had a group of mirrors , a small tower and is in the Antelope Valley.
That they signed a contract with Edison does not mean much to me. The utilities will sign a contract with anyone that has even a remote chance of building a solar project right now. The problem is there are so many ways out of the contract to make them almost meaningless. In the mean time the project organizer gets to go to investors with the contract, to try and raise money, and the utility gets all the good publicity for the solar they have under contract. Most of the new players far underestimate the real cost of their projects and don’t have much hope of producing power for what they say they can.
Tranh, there’s a lot of publicity and goodwill to be effected by backing solar/renewables, however difficult the $ return for it may be to quantify. Thus, so what if the vc’s dont’t realize the 10X return in < 5 yrs. They’ll probably, ultimately make money, and benefit all the way around with the (hopefully) good publicity generated.
You can see the Antelope Valley eSolar site in Littlerock at East Avenue T and 106th St East, zip 93543. Here is a google link: http://maps.google.com/maps?f=q&hl=en&geocode=&q=East+Avenue+T+and+106th+St+East,+Littlerock+CA+93543&sll=37.0625,-95.677068&sspn=67.295907,108.28125&ie=UTF8&ll=34.540093,-117.945013&spn=0.008749,0.013218&t=h&z=16&iwloc=addr