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Government can, and must, play an important role in deploying emerging energy technologies

By John M. Woolard, President and CEO of Brightsource Energy

I consider large-scale solar thermal power to be a keystone of our nation's future energy supply. Solar thermal technology is different from photovoltaic (PV) energy—the kind you typically find on rooftops. We generate power similar to traditional power plants, by creating high temperature steam to turn a turbine.

However, instead of using fossil fuels or nuclear power to create that steam, BrightSource Energy uses the sun's energy.

Since our founding in 2006, we have executed 13 long-term power purchase agreements (PPAs) with two of the largest electric utilities in the United States, Pacific Gas and Electric Company (PG&E) and Southern California Edison (SCE), to deliver approximately 2.4 GW of installed capacity by 2017. We believe that these PPAs are the largest solar contracts in the world and represent one of the largest utility-scale solar pipelines in the United States.

In 2007, we commenced the permitting and financing of our Ivanpah Solar Electric Generating System, located in California's Mojave Desert. The purpose of the Ivanpah project is to generate power to sell to PG&E and SCE under three of the power purchase agreements that we signed with those two utilities. In total, the Ivanpah project will cost about $2.2 billion to build and, at 392 megawatts, will produce enough power for 140,000 homes.

The Ivanpah project is already providing substantial economic benefits not just to California and the region, but to the nation, as our plants depend on the traditional supplies needed for conventional power plants as well as commercial mirrors and equipment needed to provide its solar "fuel". In fact, we procure from a supply chain that stretches across 17 states. The majority of the materials are procured domestically, and we estimate that approximately 70 percent of the project's value will be captured in the United States.

The Ivanpah project is one of the largest infrastructure projects in the nation and the largest solar thermal plant under construction in the world. When completed, it will increase the amount of solar thermal energy produced in the U.S. by 70 percent. The project is being built over a three year period and is creating 1,400 construction jobs at peak.

In April 2011, the Federal Financing Bank extended the Ivanpah project companies a $1.6 billion loan, which was guaranteed by the DOE. BrightSource first applied for a loan guarantee in 2006 and achieved financial close of the loan in April 2011.

In total, the DOE review process lasted more than four years. In our experience, the DOE's review process was extremely thorough and marked by thoughtful analysis.

The 2005 Energy Policy Act created the DOE loan guarantee program as a way to help commercialize innovative energy technologies. The Ivanpah project serves as a successful example of the important and effective role that the government can, and must, play in deploying emerging energy technologies.

Due to their similarity to conventional power plants, concentrating solar plants deliver highly reliable power that is easy for the grid to integrate. These power plants can operate as hybrids by adding fossil fuel, like natural gas, as a heat source, or can add thermal storage—which is cost-effective under today's energy prices—to provide power and grid support services whenever they are needed. The Ivanpah project demonstrates that innovative technology, when supported with thoughtful policy, can help position the U.S. as a leader in a globally-vital industry, create thousands of jobs, and strengthen our nation's energy security.

Without the loan guarantee, this project may not have happened, and none of the positive developments I have described earlier would be occurring onsite and across the nation. Going forward, we expect to finance our future projects commercially. As such, the loan guarantee program served an important role in the market, allowing our project to achieve meaningful scale, drive down costs, and validate our technology.

For the Record is an excerpt of the testimony of John M. Woolard, President and CEO of Brightsource Energy, before the U.S. House Committee on Oversight and Government Reform in May 2012.

September/October 2012