Edison gives ESolar its first major power deal

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An array of mirrors, called heliostats, focus sunlight as part of a steam-power process at an ESolar test facility in the Antelope Valley. ESolar, based in Pasadena, plans to build solar thermal plants in the valley that could supply enough electricity to power 160,000 homes. Southern California Edison has agreed to buy 245 megawatts of power from the plants.

The Southland electric utility plans to buy 245 megawatts from solar plants that will be built in the Antelope Valley.

By Tiffany Hsu, Los Angeles Times Staff Writer
June 4, 2008

Southern California Edison said Tuesday that it agreed to buy 245 megawatts of power from solar plants to be built in the Antelope Valley by ESolar Inc., a unit of Pasadena-based business incubator Idealab.

The plants, which are expected to begin operating in 2011, will provide enough electricity for about 160,000 homes, said Stuart Hemphill, the Rosemead utility's vice president of renewable and alternative power.

"We're excited about the promise of solar," Hemphill said. "It's the great untapped resource of California."

The plants will employ a solar-thermal process involving thousands of mirrors, or heliostats, spread across seven 160-acre plots in Lancaster. The mirrors concentrate the sun's rays onto water-filled receivers atop towers. The water boils, creating steam that operates turbines to create electricity.

The installation will be more cost-effective than most tower plants because the towers and mirrors are smaller, said ESolar Chief Executive Asif Ansari, giving the private company an edge over dozens of more-experienced solar suppliers now scrambling for space in Southern California deserts. The towers and small mirrors, which can be assembled without heavy machinery, make for a more efficient permit and setup process, Ansari said.

Under the 20-year contract with Edison, 105 megawatts will be available by 2012, with the full 245 megawatts ready by 2013. Financial details, including the price ratepayers will bear, weren't disclosed.

Edison International, Southern California Edison's parent company, saw its stock slip 57 cents Tuesday to $51.79.

The arrangement is the first major contract for ESolar, which Ansari founded in 2007. In April, ESolar said it raised $130 million for utility-scale solar projects from Google Inc.'s nonprofit arm, Google.org, and Oak Investment Partners.

But it is far from the first solar dealing for Edison. The utility, which serves 13 million people in Central and Southern California, says it buys more than 90% of the solar power produced in the U.S. In March, Edison said it would install $875 million worth of photovoltaic cells across 65 million square feet of rooftops on commercial buildings in Southern California.

In 2007, aiming to match a goal to have 20% of the state's electricity derived from renewable sources by 2010, Edison bought 12.5 billion kilowatt-hours of renewable energy, or 16% of the company's portfolio.

FPL Energy, the largest U.S. solar power operator, unveiled plans in March to build a 250-megawatt solar-thermal plant using parabolic mirrors set in troughs in the Mojave Desert.

Improvements in technology are pushing down the price of solar production, said George Douglas, spokesman for the National Renewable Energy Laboratory.

"Solar is a rapidly growing trend, but keeping in mind that it's growing from very little," Douglas said. "But we've got to start somewhere."

The Edison deal is good news for Idealab, ESolar's 12-year-old parent company, which launched some of the Internet's most successful businesses, including GoTo.com, as well as flops such as Eve.com.

Idealab went through a rough patch earlier in the decade and had to close several satellite offices and trim to about 75 employees from 250. Its portfolio now features 15 companies, down from about 50, across areas including robotics and online retailing.