DAVOS, Switzerland (Reuters) - A major solar thermal power plant planned for California could be delayed if the U.S. government’s economic stimulus package does not provide incentives to unlock financing for renewable energy projects.
BrightSource Energy Inc, which last year signed contracts with California utility PG&E Corp to provide up to 900 megawatts of solar thermal power, still needs to secure financing for the project, which is scheduled to begin delivering power at the end of 2011.
“We should be able to turn dirt over and start construction in the fourth quarter of this year, but big financings don’t come in months,” Chief Executive John Woolard said in an interview at the annual meeting of the World Economic Forum in Davos, Switzerland. “Depending on what happens out of the stimulus bill, it could get pushed back.”
Solar thermal power plants use the sun’s heat to create steam that powers a turbine. They are typically much larger than plants made up of photovoltaic solar panels, which use sunlight to create electricity.
The last two years saw a boom in funding for renewable energy projects like wind farms and solar power plants but this ended late last year because of the global credit crunch. A fall in the price of oil further dampened investor enthusiasm for alternative energy projects.
U.S. President Barack Obama’s proposed $825 billion economic stimulus plan, which offers incentives for renewable projects, will be critical to jumpstarting investment again, Woolard said.
“If you were to wait for private markets to come back completely, you’d be waiting a long time. But if you look at what you can do with the right amount of government support, you could see things happen this year,” he said, calling the stimulus package “one of the most important pieces of legislation in renewables, period.”
Privately-held BrightSource’s contracts with PG&E could ultimately power up to 630,000 homes in California, a state which has introduced a law requiring utility companies to derive at least 20 percent of their electricity supplies from renewable sources by 2010.
The Oakland, California company raised $115 million in May last year from a syndicate of investors, including Google Inc, BP Alternative Energy, Statoil Hydro and Black River Asset Management, a unit of Cargill Inc.
BrightSource’s initial investor was venture capital firm VantagePoint Venture Partners.
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