Green Wombat

Solar Systems is the Australian company that last month scored funding to build the world’s largest solar power plant. (More on that in an upcoming post.)  The Melbourne outfit already operates several small-scale power stations in Aboriginal communities in the Northern Territory. On Monday, I visited Hermannsburg, an outback community of some 600
people about 60 miles west of Alice Springs that uses what may be the planet’s most efficient and powerful solar technology to provide up to half of the town’s electricity.

What’s unique about Solar Systems’ approach is that it has created concentrator photovoltaic technology for large-scale power generation.  Most photovoltaic uses these days are found in residential and commercial rooftop solar panels. The dominant technology for solar power plants is something called solar thermal, where solar radiation heats liquids or other substances to create steam that drives turbines to generate electricity. At Hermannsburg, each of the eight massive solar dishes focuses solar energy on an attached receiver made up of concentator cells that generate electricity that goes straight to the grid after being run through an inverter. That means no moving parts (other than the dishes as they track the sun). The plant runs on auto-pilot, with just one person needed to monitor the operation and perform minor maintenance.

As I drive up to Hermannsburg with John Lasich, Solar Systems’ founder
and technical director, the solar dish array can be seen on the edge of the town, a collection of pastel colored cement-block and tin-roofed homes scattered across the red desert. Beyond a building with a sign reading "If You Drink and Drive You’re a Bloody Idiot," is the community’s diesel generator and the year-old 192-kilowatt solar power station.

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Two weeks ago Green Wombat first reported that Silicon Valley venture capital firm VantagePoint Venture Partners was set to invest in a large-scale solar power plant. Matt Marshall at VentureBeat followed up and has details of the deal here.

Matt reports that VantagePoint is investing in Luz II, a company that signed an agreement in August with Northern California utility PG&E to produce 500  megawatts of electricity from large-scale solar power plants. The company is a successor to Luz, which built nine solar power stations in California’s Mojave desert in in the wake of the oil shocks of the late 1970s.

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Be sure to check out "Here Comes the Sun" in the November issue of Business 2.0 now hitting the newsstands. The feature written by my colleagues Michael Copeland and Tom McNichol (and edited by the wombat) takes an in-depth look at the solar gold rush now on in Silicon Valley. I love being a magazine editor, but one of the frustrations of working at a monthly in the Internet age is finishing an edit of a good and exceedingly timely  story and then waiting weeks before it gets into readers’ hands.

Click on the link above for the full story. Here’s an excerpt:

The rapidly expanding alternative-energy economy promises to shake up the way power is produced and consumed as profoundly as Silicon Valley’s computer and Internet companies upended global communications and commerce in the late 20th century.

The signs of world-changing transformation are everywhere: Venture capitalists are pouring hundreds of millions of dollars into Valley solar startups pursuing technological breakthroughs to make sun power as cheap as fossil fuel. Three of the largest tech IPOs of 2005 were for solar companies, including San Jose-based SunPower, a spinoff of chipmaker Cypress Semiconductor (CY).

Other old-line Valley tech companies are also jumping into the market. Among the most significant is Applied Materials (AMAT). The world’s largest chip-equipment maker will begin producing machines to manufacture solar wafers, laying the groundwork for an industrial infrastructure that should lower the cost of producing solar cells. For the first time in many years, high-tech manufacturing plants – yes, factories – are being built in Silicon Valley.

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The Australian government’s decision to award Solar Systems a $A75 million (about $US57 million) to build the world’s largest solar power station in the Australian state of Victoria is a big setback for rival EnviroMission. The Melbourne company is seeking to build a 50-megawatt, 1,600-foot-high solar tower power plant in the state of New South Wales, just over the border from Victoria. EnviroMission had competed for the grant, which it was counting on to jump-start construction of the solar tower next year and attract additional investors. The grant, part of the Australian government’s Low Emissions Technology Demonstration Fund, is intended to give renewable energy companies enough cash to get their projects off the ground and demonstrate their technology’s feasibility on a large scale.

I chronicled EnviroMission’s six-year quest to build a solar tower on the edge of the Australian Outback in "Tower of Power," which appeared the August issue of Business 2.0.  EnviroMission on Wednesday requested the Australian Stock Exchange suspend trading in its shares pending an announcement on Friday. Originally proposed as a 1-kilometer-high, 100-megawatt plant, the solar tower was redesigned with an eye to winning the government grant. EnviroMission CEO Roger Davey told me in late June that if the company lost the grant it would re-evaluate the tower’s design to ensure its commercial viability and would arrange alternative financing.  Meanwhile, EnviroMission’s joint venture with Chinese investors to build a solar tower near Shanghai is proceeding.

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Just a quick post before I get on a plane: Australian company Solar Systems announced it will build a 154 megawatt solar power station in the state of Victoria. The company on Wednesday received a $AUS 75 million grant from the Australian federal government to fund construction. The Victorian state government is kicking in an additional $AUS 50 million.

Solar Systems’ plant, to be completed by 2013, will use Heliostat Concentrator Photovoltaic technology, developed in part with a subsidiary of Boeing. More on this when I land.

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California Governor Arnold Schwarzenegger just made a surprise appearance at
the Solar Power 2006 conference in San Jose. No surprise, actually. If you’re running for re-election on your environmental record, showing your green cred to 6,000 solar energy advocates is a no-brainer. The audience gave the governor the rock-star treatment, leaping to
their feet and holding their digital cameras aloft as he entered the
conference hall. No surprise there either. Schwarzenegger, more than
any other politician, has boosted the fortunes of the solar industry
with his million solar homes initiative and the landmark global warming
legislation he signed into law last month.

The governor spoke for less than 10 minutes, pumping up California’s
$2.8 billion incentive program to subsidize home solar systems. "This
will provide 3,000 megawatts of clean energy, of solar energy," said
Schwarzenegger. "We need a lot of energy here in California. It’s clean
energy, that means we’re going to reduce our output of greenhouse gases
by three million tons. We can be pro environment and be pro business.”

The only news he committed was to announce a new website for Californians wanting to get with the million solar homes program.

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Speaking of solar, Jeff Davis, my fellow assistant managing editor at Business 2.0, has an interesting post on Waterlog about a Sydney company, Solar Sailor, that has won a contract to build solar-powered ferries that will start criss-crossing  San Francisco Bay in 2008. As Jeff writes:

The ferries will run on as much on sun and wind power as they do diesel fuel—and will emit half the pollutants of a similar sized conventional ferry.  The triple-hulled vessel will have a 45-foot high retractable wing covered in solar panels that can generate 20 kilowatts of electricity to help take the load off the two diesel engines.  The wing also generates some 170 hp on its own as a sail. When conditions get hairy and the wind hits 30+ knots (that’s when many sailboats start to de-mast), the wings fold up, all beetle-like.

Way cool. The parallels between the semiconductor industry and the burgeoning solar industry are many, and this strikes me as emblematic of another similarity: just as microprocessors eventually became powerful and cheap enough to put into a host of everyday objects – cars, cell phones, teddy bears – solar cells are too beginning to appear in products beyond suburban rooftops.

But for now let’s just leave it at Aussie! Aussie! Aussie! Oi! Oi! Oi!

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In another sign of Silicon Valley’s growing stake in solar energy,  VantagePoint Venture Partners will soon announce an investment in a 100 megawatt solar power plant. VantagePoint’s John Woolard disclosed the investment today at the Solar Power 2006 conference in San Jose.

The investment is notable on a couple counts. So far Silicon Valley
has preferred to invest in companies producing photovoltaic panels and
other solar technology for homes and offices. Valley VCs have stayed
away from solar thermal power plants, large facilities which use solar
radiation to heat liquids or other substances to create steam that
drives turbines to generate electricity. It’s the solar equivalent of
investing in a computer chip factory as thermal solar plants typically
cost hundreds of millions of dollars to build. Solar thermal plants
plug into the power grid and sell their electricity to regional
utilities.

"We look at things that are highly disruptive and can exist in a
world of declining subsidiaries," Woolard told a standing room audience
of several hundred people at a session on investing in solar energy.

Woolard didn’t identify the solar power plant company, the
facility’s location or the size of the investment and left before we
could corner him for more details. When asked if such an investment put
his firm in the position of becoming a big project financier, he said
VantagePoint’s strategy was to invest in the technology and engineering
team, leaving the financing of plant construction to other investors.

After the oil shock of the late 1970s, a slew of experimental solar
power plants were built, including several in the California desert.
But when oil prices subsequently fell to record lows in the 1980s, the
projects were largely abandoned. The return of sky-high oil prices,
global warming fears and laws to cap greenhouse gas emissions have
reignited interest in solar thermal plants and several are under
construction in Europe and the United States.

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If the blow-out trade show is an unmistakeable sign that an industry is ready for prime time, then this is solar energy’s year. More than 6,000 people are packing Solar Power 2006 at the San Jose convention center, and more than 160 companies have set up booths. It’s all a bit deja vu of the optimism and giddiness that pervaded the giant Consumer Electronics Show during the dot-com boom – minus the Vegas setting and the booth babes, of course.

The opening session this morning focused on the future of solar technology. SunPower founder Richard Swanson predicted the falling cost and growing efficiency of solar cells would accelerate in the next few years, outstripping previous projections. He said SunPower, the Silicon Valley subsidiary of chipmaker Cypress Semiconductor, would announce a solar cell this fall with an efficiency of 23 percent, which appears to be a record for a commerial product. And he predicted that by 2013, the cost of a solar module will drop to $1.44 a watt, making photovoltaics close to competitive with conventional power sources.

The silicon shortage has slowed the dramatic fall in solar power prices of recent years. But Australian solar power pioneer Martin Green told conference-goers the shortage has opened the door to develop next-generation technologies such as thin-film solar. That technology deposits solar cells on a  film that is 100th the thickness of traditional silicon wafers. His team at the University of New South Wales in Sydney is pursuing research into thin film technologies that could boost the efficiency of solar power to as high as 60 percent.

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Google, as everyone knows by now, plans to install the nation’s largest corporate solar array at its Mountain View headquarters. The rooftop system will produce an estimated 1.6 megawatts of power.

After covering the Googleplex with solar panels, the sun will provide about 30 percent of the campus’ power. As my colleague Michael Copeland points out in his Dawn Patrol blog, Google’s motives are not entirely altruistic. The search giant’s data centers, and those of its competitors at Microsoft and Yahoo, consume an enormous amount of expensive energy. Solar isn’t close to packing the punch needed to power a data center, but the day may not be far off given the money being poured into Silicon Valley solar startups pursuing technological breakthroughs. Look for more on this and Silicon Valley’s solar boom in an upcoming Business 2.0 feature story written by Michael and Tom McNichol for the magazine’s November issue.

Google’s move is good news for the solar biz and Silicon Valley. The question is, are Steve Jobs and Larry Ellison going to sit back and let the Google boys boast about having the biggest array in the Valley? Come on all you tech titans, forget about whose Woodside mansion is more massive or yacht is longer. Show us your panels.

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