Swindon, UK-based Sunstroom Energy Investments said today it is planning to build a €300 million ($425.1 million) 50 megawatt concentrated solar thermal electricity plant in Spain's Extremadura province.
Sunstroom Development Manager Reinout Das told the Cleantech Group he’s confident the company will be able to raise the funds from existing and new investors, despite the challenging economic climate.
“The funding is required as the building goes forward,” Das said. “It’s not needed from day one.”
Its newest solar thermal park, located in Saucedilla, Cáceres, is expected to cover 271 hectares (669.7 acres), producing renewable electricity in one of the world’s sunniest spots. The park would take about two years to build, and once operational could generate €36 million in annual revenue, according to Sunstroom.
No funding has been raised yet because the road show just started, with 25 meetings with cleantech-related funds and capital companies in the past week alone, mostly in London, Das said.
Sunstroom said it’s open to possibilities such as funding from private equity firms, institutions and green funds. Das thinks the company should be able to raise the funds by November or December at the latest.
Since being established in 2006, Sunstroom has developed three solar photovoltaic projects in the Spanish provinces of Navarra, La Rioja and Castilla-La Mancha, generating a total of 5.4 MW. These projects have all been funded mainly by high net-worth individuals, Das said.
In 2008, the three parks in total generated €30 million in revenue through a power purchase agreement signed with Spanish power utility Iberdrola, and offered a return on investment for its backers of 10 percent. Das expects a similar ROI for its new Extremadura plant.
“[Investors] are looking for more secure investments, and 10 percent is still pretty good,” he said.
Sunstroom also has a pipeline of projects at various development stages including solar photovoltaic, solar thermal, wind, hydroelectric and biomass.
Sunstroom’s new park, to be called Thermostroom 1, would use concentrated solar power (CSP) technology, which harnesses parabolic mirrors to capture heat from the sun. The heat is then stored in the form of steam to drive a turbine to produce electricity.
Other companies developing similar solar plants include Spanish energy giant Acciona, which has two plants under construction, and ACS Group, a large Spanish construction company (see Acciona gets long-term solar financing).
Sunstroom, which bought the Extremadura site, has already secured outline planning, environmental and operational permits, with support from local municipalities.
The company said it has also signed agreements with undisclosed technology suppliers, engineering partners, and utility companies that have experience with similar power plants, both in Spain and the United States.
Spanish law guarantees that a tariff on the project’s renewable electricity output be paid by Sunstroom’s utility partners at €0.2784 cents per kilowatt during the first 25 years of the installation, and then at 75 percent of this level for the rest of the project’s life.
Das said his company applied for the connection before the Spanish government implemented restrictions limiting the development of new projects, so the Extremadura project won’t be affected.
Spain led the global market for solar in 2008, with 2.51 gigawatts installed that year alone, according to a report from the European Photovoltaic Industry Association (see Spain leads 2008 solar market).
But last year, Spain scaled back its feed-in tariff and set a 500 MW cap on its solar incentives, which could limit demand there (see Extra solar panels in Spain driving down prices).
The Cleantech Group’s 2008 Concentrated Solar Thermal report predicted trough-based CST systems will be most prevalent until 2012 or 2013 but then could be displaced by power towers, compact linear Fresnel reflectors (CLFR) and dish-engine developers if the technology advances more quickly (see Cleantech Group picks winners and losers in concentrated solar thermal).
Earlier this month, Pasadena, Calif.-based eSolar commissioned a 5-MW facility in the California desert, marking the first solar thermal plant to use power-tower technology in the United States (see eSolar completes 5-MW power-tower solar plant as NRG waits in wings).
In 2008, Palo Alto, Calif.-based Ausra opened its first 5-MW CLFR power plant in North America, expected to power 3,500 homes (see Ausra opens U.S. solar-thermal plant).
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