BrightSource vs. the desert tortoise. Is BSE too big to fail?
Shortly after Google announced its largest investment to date in BrightSource Energy’s gargantuan solar thermal project, the Californian company filed its first $250 million public offering on Earth Day. Forbes calls this an initial test of the market’s appetite for utility-scale solar energy. A handful of blue-chip investors have invested millions of dollars in BSE’s promise, and the company is in the red by nearly $2 billion. But BSE disclosed in its IPO that its success hinges on the 370MW Ivanpah Solar Energy Generating Station, the implementation of which is imperiled by the desert tortoise.
Despite formidable obstacles, BrightSource Energy’s Arnold Goldman has pursued his solar vision since the 1970s. So close to being able to deliver enough energy to power 15 million homes at peak output on 110,000 acres of land in California, the company is nonetheless scourged with political constraints.
Despite a $1.6 billion federal loan guarantee from the U.S. government, $168 million from Google, and investors such as Alstom, Morgan Stanley, Vantage point Venture Partners banking on the company’s success, it is not yet guaranteed.
BSE has to spend $12.9 million just to maintain its leases on federal property, while its debt and contractual obligations, according to Forbes, amounts to $1.8 billion.
“Our future success depends on our ability to construct Ivanpah, our first utility-scale solar thermal power project, in a cost-effective and timely manner,” the company stated in the filing. “Our ability to complete Ivanpah and the planning, development and construction of all three phases are subject to significant risk and uncertainty.”
Once Ivanpah is online and utility companies such as PG&E and Southern California Edison begin to purchase up to 2600MW in electricity, those investments might begin to pay off. In the meantime, BSE (and other solar companies) are haunted by lawsuits.
The U.S. Bureau of Land Management told BrightSource that the discovery of more desert tortoises than were thought to exist (which are supposed to be relocated elsewhere in order to mitigate risk to their perilous survival) has forced the agency to delay the next phases of Ivanpah’s development.
“Any delay … in delivering required approvals or opinions could have a material adverse effect on the schedule for Ivanpah’s second and third phases and our business,” the company stated in its S-1 filing.
BSE is dangling on the precipice of enormous success, which could have far-reaching impacts on America’s renewable energy industry, and bitter failure.
:: Forbes
More on BrightSource Energy:
“So close to being able to deliver enough energy to power 15 million homes at peak output on 110,000 acres of land in California, the company is nonetheless scourged with political constraints.”
So close except for some of those pesky details! This company may or may not get through the Ivanpah project, which will deliver power for only 140,000 homes only during peak hours of not only the day, but the peak time of year too.
Solar is a great technology which is delivering results now, and will only improve in the future. But the real promise of it lies in distributed rooftop generation, not concentrated in environmentally sensitive landscapes such as Brightsource’s. I’m shocked that a company such as Google that skillfully weaved its way around expensive supercomputers at its beginning would want to invest in this. Or maybe $168 million is a small price to pay to be friendly with the Obama administration.