Bechtel, the global engineering and construction giant, has jumped into the solar power plant business in a deal with a developer to build a 440-megawatt energy complex in California.
The agreement, being announced Wednesday, calls for Bechtel’s development and finance arm, Bechtel Enterprises, to take an equity stake in the solar project known as the Ivanpah Solar Electricity Generating System. The collection of three solar power stations will deliver electricity to Pacific Gas & Electric and Southern California Edison.
Bechtel is teaming up with BrightSource Energy, a start-up company based in Oakland, Calif.
Ivanpah is the first large-scale solar power plant to undergo regulatory review in the United States in nearly two decades, and the selection of Bechtel as BrightSource’s engineering, procurement and construction contractor is considered a significant step in obtaining financing needed to build the project.
“It’s a landmark solar power transaction, the largest in the world when completed, and it expands the capability of solar power tower technology,” said Ian Copeland, Bechtel’s president of renewables and new technology. “This is a strategic investment for us in terms of looking at the market and getting involved with BrightSource. We think it’s part of a long-term relationship.”
BrightSource has signed contracts to supply more than 2,600 megawatts of solar electricity to the two utilities. Terms of the Bechtel investment and the construction agreement were not disclosed but Nathaniel Bullard, a solar analyst at the market research firm New Energy Finance, estimated that a solar thermal power plant of Ivanpah’s size would cost about $2 billion to build.
Construction of the solar power plants, which use a technology that has not been deployed on a commercial scale, is expected to begin in 2010.
BrightSource currently operates a six-megawatt demonstration plant in Israel that deploys fields of mirrors called heliostats to focus the sun on a water-filled boiler that sits atop a tower. The intense heat creates steam to drive an electricity-generating turbine.
“I would probably say this is the most important thing to happen in the solar thermal industry in a long time,” said John Woolard, BrightSource’s chief executive, referring to Bechtel’s entry into the solar power plant business.
