BrightSource Energy was offered a $1.37 billion loan guarantee from the Department of Energy on Monday, the largest such loan awarded by the DOE –see official press release here. The Oakland, Calif.-based company will use this crucial government backing to secure financing to support construction of its 440-megawatt Ivanpah Solar Power Complex, located in a six square miles (15.53 square kilometers) area on the Nevada side of the Mojave Desert, owned by the Bureau of Land Management (BLM).
Ivanpah is the first utility-scale solar power plant to undergo licensing in California in nearly two decades, reports Todd Woody in the New York Times, who first tweeted about the loan guarantee.
BrightSource is backed by a roster of blue-chip investor including, Google, Chevron, BP, Morgan Stanley as well as VantagePoint Venture Partners.
To generate electricity BrightSource will deploy 400,000 mirrors to reflect sunlight onto seven 459-foot metal towers.
The Ivanpah projects uses CSP power tower technology, which uses a field of heliostats that focus the sun’s rays on a receiver at the top of a tower. Each heliostat is a flat, high-efficiency mirror mounted on a frame that reflects solar energy toward the receiver. The receiver collects the energy as heat, which is used to turn water into steam that in turn powers electricity-generating turbines.
To actually get that loan guarantee BrightSource will have to pass state and federal environmental review.
And that brings us to the desert tortoises. Earlier this month BrightSource agreed to reduce the project’s footprint and megawattage to have less impact on about 25 threatened tortoises. The move, comical on paper, might have actually have been the crucial step that helped the company secure this massive loan.
Until now thin-film photovoltaic cell developer Solyndra’s $535 million DOE loan guarantee was the largest awarded, since the funding program began in 2005.
In this challenging funding environment, without the loan guarantee BrightSource would probably have had a very difficult time securing financing from project finance bank. As we’ve reported, while banks are underwriting loans again, their credit requirements — post global financial crisis – are much tighter.
Also, last year the DOE revamped the program’s rigid regulations to deploy the loans to support a wider range of projects. DOE officials say they expect to award 15 loan guarantees over the next six months.
BrightSource’s Ivanpah project is part of the company’s 2,600-megawatt project portfolio that is backed by long-term purchase agreements with Pacific Gas and Electric and Southern California Edison.