The solar power company BrightSource Energy withdrew its initial public offering late on Wednesday, citing tough market conditions.
BrightSource Energy had been expected to raise raise up to $182.5 million in its initial public offering. The Oakland-based solar firm had planned to issue 7.9 million shares, at a price of $21 to $23 per share, according to an updated SEC filing.
For the year ended December 2011, BrightSource generated $159.10 million in revenues, and lost $110 million. Competitors in the CSP with storage market include SolarReserve and Abengoa.
BrightSource Energy is in the massive-scale concentrating solar power (CSP) business, a technology which addresses a common refrain about the limitations of photovoltaic solar power -- that the technology only works when the sun is shining. CSP boasts the ability to store thermal energy long after the sun goes down. This ability improves CSP's capacity factor and dispatchability, and has the potential to improve CSP's levelized cost of energy (LCOE).
BrightSource Energy's power tower solar thermal system uses a field of software-controlled mirrors called heliostats to reflect the sun’s energy onto a boiler atop a tower to produce high-temperature and high-pressure steam. The steam is used to turn a conventional steam turbine to produce electricity. When paired with storage, the steam is directed to a heat exchanger, where molten salts are further heated to achieve a higher temperature, storing the heat energy for future use.
BrightSource Energy's Ivanpah Project CSP array farm in the Mojave Desert (Click Image To Enlarge)
BrightSource Energy has won more than $500 million in VC funding from VantagePoint Venture Partners, DBL Ventures, DFJ, Alstom, et al. BrightSource has also received project funding from NRG and Google, as well as $1.6 billion in DOE loan guarantees for the Ivanpah project to help reduce the financing costs of its solar power projects. BrightSource has a number of contracts to sell electricity to large utilities, including Pacific Gas and Electric, according to a company statement.
When completed in 2013, the Mojave Desert-based Ivanpah Solar Electric Generating System will send approximately 2,600 megawatts of power to the grid, doubling the amount of solar thermal power produced in the U.S and generating enough electricity to power 140,000 California homes when operating at full capacity.
CSP needs every advantage it can muster, given the plunging cost of PV and the exploding scale of the global photovoltaic market. In fact, a number of planned CSP plants have switched to PV because of the challenging economics of CSP, as well as financiers' familiarity with PV.
GTM Research has looked at the LCOE economics of CSP in a recent report, Concentrating Solar Power 2011: Technology, Costs and Markets. GTM calculates that CSP towers with storage can earn higher revenue and profits per kilowatt-hour than PV. The high-level finding is that power tower technology is cost-competitive with PV on a levelized cost basis, and that power tower with storage could represent the lowest cost per kWh solar option in 2016 and beyond.
BrightSource Energy has signed 13 power purchase agreements (PPAs) to deliver approximately 2.4 gigawatts of installed capacity to two of the largest electric utilities in the U.S.: PG&E and Southern California Edison.
According to the S-1, BSE has a development site portfolio of approximately 90,000 acres under its control in California and the U.S. Southwest, with the potential to accommodate approximately 9 gigawatts of installed capacity. Two California sites are currently in advanced development: Rio Mesa Solar (6,600 acres) and Hidden Hills Ranch (10,000 acres).
The news of the BrightSource's IPO cancellation comes at a tough time for renewable energy companies.
The United States and European countries have pulled back on financial support for wind, solar and other alternative energy sources as they look to reduce government debt.
Global clean energy investment fell to $27 billion in the first three months of 2012, a 22 percent decline from the period a year earlier, according to statistics from the market analysis firm Bloomberg New Energy Finance.
So-called green energy companies raised a mere $601 million from the public markets worldwide in the first quarter, an 87 percent drop from the period a year earlier.
BrightSource’s chief executive, John M. Woolard, said in a statement.
“While we received significant interest from potential investors, the continued market and economic volatility are not optimal conditions for an I.P.O. As a company, we’ve consistently made decisions in the best interest of our shareholders, employees and customers, and we will continue to do so.”
The company, based in Oakland, Calif., has received backing from a number of prominent investors, including Google.
BrightSource won a $1.6 billion loan guarantee last year from the United States Energy Department to help reduce the financing costs of its solar power projects. BrightSource has a number of contracts to sell electricity to large utilities, including Pacific Gas and Electric, according to a company statement.
COMMENTARY: I have been covering BrightSource Energy ever since they started getting big headlines on May 20, 2010, June 24, 2010 and on April 12, 2011 when they announced a $168 million investment from Google.
I have always found the BrightSource Energy's CSP technology very interesting, but they have yet to generate a profit from the huge Ivanpah since they announced that $1.6 billion loan guarantee in early 2011.
I was about to announce their plans for an IPO in the spring 2011, only to learn that they had cancelled that IPO only three days later due to volatility in the stock market. Boy, things happen fast. Sort of reminds one of what Zynga did when they announced their IPO in July 2011, only to cancel that IPO, then reannounce it for December 2011.
Courtesy of an article dated April 12, 2012 appearing in New York Times DealBook and an article dated April 9, 2012 appearing in GreenTechMedia
Building Management,
BrightSource Energy is using a very unique solar technology which is able to store energy for future use when the sun does not shine. Scalability is not an issue with BrightSource's CSP technology. The company is building a CSP solar farm capable of generating 1 GW of electricity, enough to supply the needs of 250,000 homes, 100% free of carbon emissions. I think that's quite impressive
Posted by: Tommy | 04/24/2012 at 07:50 AM
Summoning up imaginary energy sources will not alter the equation. Until they are demonstrated to work and can be scaled up to the required capacity in a relevant timescale, they are imaginary and of little interest to tomorrow's poor, or wealthy for that matter.
Posted by: Building management system | 04/24/2012 at 04:02 AM