SolarReserve Plans Multiple Bids for Saudi’s First Solar Tender
SolarReserve LLC, a U.S. maker of technology that uses sunlight for power, plans multiple bids for Saudi Arabia’s first renewable-energy tender as the country plans to generate a third of its electricity from solar by 2032.
SolarReserve has formed a joint venture in Saudi Arabia and is working on preliminary proposals for the tender, Chief Executive Officer Kevin Smith said by phone. Its technology uses thousands of mirrors to concentrate sunlight onto a central point to generate heat, which is then used to produce power. The energy can be stored in molten salt until electricity is needed.
“We have put together proposals and project structures for the government and we expect to participate actively in the tenders,” Smith said. “We will submit between one and three bids in different project structures and in different parts of the country.”
Saudi Arabia plans to start its first tender targeting 2,000 megawatts of solar energy in early 2013. It plans a second tender in 2014 aiming for 2,500 megawatts. The country in May said it’s looking for investors to build a $109 billion solar industry by 2032. Companies including Canadian Solar Inc., and Centrotherm Photovoltaics AG have also expressed an interest in the region.
The size of the projects the technology maker would enter depends on the structure of the tender, Smith said. “There has been talk of a multi-thousand megawatt tender and we potentially would look at larger projects in the 250-megawatt to 500- megawatt size range,” he said.
The economics in Saudi Arabia are “pretty straightforward,” said Smith, as solar thermal power is more cost-effective than burning oil, assuming the alternate price the country can make for oil is $100 a barrel.
SolarReserve is building its first 110-megawatt commercial project in Nevada that will cost $990 million. The facility, that will provide enough power for 75,000 homes, is being funded through a loan guarantee from the U.S. Department of Energy and equity from the company, Banco Santander SA (SAN) and the Cobra unit of Spain’s ACS-Actividades de Construccion & Servicios SA. It should start working by the end of 2013 and NV Energy Inc. (NVE) will purchase the power under a 25-year contract.
The company is also developing a project in California and one in Spain and is active in South Africa, Chile, China and Australia, said the CEO. It has a joint venture in South Africa with local companies and is in the “later stages” of finding a partner in China with a decision expected later this year, he said.
“Our joint venture partners could be financial, engineering or construction related,” Smith said. “When we go into various countries we’re typically looking at somebody that has an understanding of the infrastructure in the country and so typically that’s financial, engineering or construction or utility-related entities.”
The solar company is in discussions with potential investors and banks for its projects in California and those in South Africa, Saudi Arabia and Spain, Smith said.
To contact the reporter responsible for this story: Louise Downing in London at Ldowning4@bloomberg.net
To contact the editor responsible for this story: Reed Landberg in London at email@example.com