Green Wombat

In a sign that the nascent solar power plant industry is reaching
the point where the name of the game is less about developing new
technologies and more about managing large-scale construction projects, Silicon Valley solar company Ausra is tapping an energy industry veteran to lead the startup. Robert Fishman, 55, is leaving Calpine, a San Jose-based power company, to become
Ausra‘s CEO. As executive vice president of Calpine, Fishman managed natural gas and geothermal power plants that produce 24,500 megawatts of electricity. "This is exactly the type of experience Ausra needs as it scales rapidly into a large, utility-grade provider of cost-effective, reliable, zero carbon electricity for the world,” said venture capitalist Vinod Khosla, an Ausra investor and board member, in a statement. Ausra relocated to Palo Alto from Sydney, Australia, last year and has attracted big-name investors like Khosla and Kleiner, Perkins, Caufield & Byers, which have poured more than $40 million into the company. Founding CEO Peter Le Lièvre will manage the company’s international projects, including a demonstration power plant being constructed in Portugal. Ausra is negotiating with California’s PG&E (PCG) and other U.S. utilities to construct massive megawatt power plants and is expected to file an application with the California Energy Commission next week to build a 175-megawatt power plant.

Big Solar – those massive megawatt power plants to be built in California’s Mojave Desert – has been seen at best as an add-on to the power grid. Solar, the conventional wisdom goes, might provide "peaking power" when demand spikes during the day but can never replace the so-called baseload power supplied round-the-clock by coal or natural-gas fired power plants. But in a paper to be presented today at the International Solar Energy Society conference in Beijing, scientist David Mills argues that huge solar farms can replace carbon-spewing power plants and produce electricity at competitive prices for the entire nation.

How? By combining solar thermal power plants with energy storage systems to keep the lights on long after the sun has set, according to Mills, chairman and chief scientific officer of Silicon Valley solar company Ausra. Solar thermal plants like the ones being developed by Ausra use rows of mirrors to focus the sun’s rays on tubes of liquid – water in Ausra’s case – to create steam that drives an electricity-generating turbine. The solar farms would store energy in tanks of liquid that would release the heat for nighttime operation or when clouds pass over. Mills and co-author Robert Morgan calculated that a 92-mile by 92-mile
solar farm in the desert southwest could power the entire country. Analyzing electricity demand data from California and Texas, they figured that solar power plants with 16 hours of energy storage capacity could supply 92 percent of those states’ power at about 8 cents a kilowatt hour – roughly the current cost of fossil fuel-generated electricity. Mills and Morgan believe the same would hold true on a national scale. "Zero emissions technology is required to replace most of current generation by mid-century to meet stringent climate goals," they wrote. "What is now required as a climate safety, economic, and security imperative is a rethink of the function and form of electricity grid networks, and the inclusion of high capacity factor solar electricity technology in the design of continental electricity systems."

That would mean replacing the current AC grid with a DC grid to get solar electricity from sunny states to the rest of the country with minimal transmission losses – an undertaking on the scale and cost of the construction of the interstate highway system in the 1950s. And of course the fossil fuel industry isn’t about to march quietly off to the coal-bin of history. But Mills’s "thought experiment" is less a blueprint for a solar nation than an opening shot in a campaign to shift the power paradigm away from the constraints imposed by coal and nuclear technologies. "Baseload is what those older technologies provided, not what we need," Mills told Green Wombat recently. "We need something that follows the natural load."

In other words, the grid is currently constructed to accommodate capital-intensive fossil fuel plants that need to run 24/7 to be most efficient and economical. The natural load, on the other hand, is the demand for electricity created by people’s and the economy’s daily rhythm. That demand naturally peaks when people are up and about and falls at night when they’re asleep. Renewable energy sources, Mills argues, more closely mirror human behavior. Solar electricity production soars when demand does during the day. At night, stored solar energy and other renewable sources like wind, which tends to blow strongest in the evening, can more closely match lower demand as people and machines wind down.

For its part, Ausra is developing solar storage technology that will be commercially available in about 18 months, according to Mills. The company is expected to file a development application for a 175-megawatt solar power plant next week, a spokesperson for the California Energy Commission told Green Wombat. Ausra has been negotiating with PG&E (PCG) and other utilities. (Along with PG&E, California’s two other big utilities, Southern California Edison (EIX) and San Diego Gas & Electric (SRE) so far have signed deals to buy nearly 3 gigawatts of solar power.)

"We’re hoping to make announcements at the end of the month for multiple projects," Mills says.

California would become the Saudi Arabia of solar energy if a slew of large-scale solar power plants proposed for the sun-drenched Mojave Desert are built. The federal Bureau of Land Management has received right-of-way requests on 300,000 acres for 34 Big Solar power stations that would generate more than 24 gigawatts of green energy. That disclosure was made in a development application that BrightSource Energy has filed with the California Energy Commission to build a 400-megawatt solar power station complex in the Mojave just across from the Nevada. It’s unlikely, though, that anywhere close to that number of solar power plants will be built in the near future. Still, it’s an indication of the land rush that’s on as solar entrepreneurs start to lock up the best sites. So far, Southern California Edison (EIX) and San Diego Gas & Electric (SRE) have contracted for up to 1.75 gigawatts with Stirling Energy Systems of Phoenix. PG&E (PCG), meanwhile, is negotiating with BrightSource to provide 500 megawatts of solar electricity and has signed a contract for 553 megawatts more with Israeli solar power company Solel. All the projects would be built in or near the Mojave.

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 Lièvre 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 Lièvre 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 Lièvre: "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 Lièvre 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 Lièvre 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.