BrightSource Energy, a leading U.S. concentrating solar power (CSP) company and Shanghai Electric Group SEC have signed an agreement to form a JV to build utility-scale CSP plants in China.
Under the agreement, the joint venture will leverage both partners' contributions to provide engineering, procurement and construction services for projects featuring BrightSource's solar tower technology in China.
The JV's first proposal is for the construction of two 135 megawatt MW CSP plants as part of the first phase of the Qinghai Delingha Solar Thermal Power Generation Project, of which the majority owner is Huanghe Hydropower Development, a subsidiary of the China Power Investment Corporation (CPI).
The announcement was made on Monday in a signing ceremony attended by deputy secretary of commerce Bruce H. Andrews during the Asia-Pacific Economic Co-operation Summit (APEC) in Beijing.
"Concentrated solar thermal power, with integrated thermal energy storage, is a cost-effective way to bring reliable, dispatchable renewable energy to the grid today," said David Ramm, CEO of BrightSource Energy.
"By partnering with Shanghai Electric we will deploy our best-in-class solar thermal technology to help China meet its growing energy needs and emissions-reduction goals."
The proposed Qinghai Delingha project will be located in China's Qinghai province and is planned to include six 135 MW CSP tower plants.
The first phase will comprise two 135 MW solar thermal plants with thermal energy storage. Construction is expected to begin next year and be completed in 2017.
"SEC and BrightSource will fully co-operate by establishing the JV and forming a consortium to undertake an EPC general wrap to ensure success of the project," said Bi Chengye, general manager of SEC's CSP division.
"This will also benefit development of the future CSP market in China. As China's economy develops and its environment improves, developing renewable energy will be the number one choice.
"As the cleanest and most environmentally-friendly power generation method so far, CSP faces two challenges in its commercial take-off: one is reliability of technology and the other is its current, relatively high, construction cost.
"BrightSource's CSP technology has been successfully applied in its Ivanpah project and has shown good stability in commercial operation. SEC, as the contractor and major equipment supplier to the project can help solve the difficult management issues during construction in China so as to control the total cost.
"We strongly believe the efficient operation of the SEC and BrightSource JV will provide quality service for owner Huanghe, and ensure the success of the project."
A feasibility study for the first phase of the Delingha project has been completed and will be reviewed by the expert panel appointed by Huanghe and the Qinghai Province development and reform commission (DRC).
Pending the Qinghai DRC's approval, based on recommendations from the expert panel, the National Development and Reform Commission will also approve and recommend a tariff for the project's first phase.
BrightSource and SEC have submitted a proposal to Huanghe Hydropower Development for construction of the first phase.
As part of the proposal, BrightSource and SEC provided a term sheet with Huanghe regarding the proposed EPC services, which is subject to Chinese regulations and approval by Huanghe and its higher authority, the China Power Investment Corporation.
Executives from BrightSource, SEC and Huanghe signed the JV agreement and EPC term sheet in front of senior representatives of the U.S. government.
APEC was selected as the venue because it focuses on addressing both the region's economic and environmental challenges by speeding the transition toward a global low-carbon economy in a way that enhances energy security and creates new sources of economic growth and employment.
Yesterday's agreements build on BrightSource's memoranda of understanding with CPI and its subsidiary, Huanghe, for BrightSource to be the technology supplier for the first commercial-scale CSP project in China as part of the U.S.-China framework for the 10-year co-operation on energy and environment.
BrightSource was selected based on its experience with the development of the Ivanpah Solar Electric Generating System, in California.
In addition to working with Huanghe of CPI and SEC, BrightSource is co-operating with the China Renewable Energy Engineering Institute on issues regarding the efficient utilization and development of solar power in China.
BrightSource is leveraging its experience with Ivanpah to jointly promote technology advancement and project development for China's burgeoning CSP industry.
"This joint venture is an important milestone for BrightSource as we progress to become a global technology provider that also offers development support and engineering and operational services," added Ramm.
"BrightSource is the world's premiere concentrating solar power technology provider. BrightSource's solar field and solar receiver technology is featured at the world's largest operating solar thermal power plant, the 392 MW Ivanpah Electric Generating Station.
"Built in partnership with NRG Energy and Google, Ivanpah began commercial operation in 2013 and provides clean, reliable energy to more than 140,000 California homes. Additionally, a 29 MW thermal facility, using BrightSource technology, is in its third year of operation for Chevron Corp's enhanced oil recovery efforts in Coalinga, California.
