BrightSource Energy and Shanghai Electric Group Co. to develop two CSP tower plants in China

The companies announced they have signed an agreement to form a joint venture to develop two CSP plants in China. Under the agreement, both partners will provide engineering, procurement and construction (EPC) services for projects featuring BrightSource’s solar power tower technology.

The joint venture’s first proposal is for the construction of two 135 MW CSP plants, as part of the first phase of the Qinghai Delingha Solar Thermal Power Generation Project. The majority stakeholder of this project is Huanghe Hydropower Development Co., Ltd (Huanghe), a subsidiary of the China Power Investment Corporation (CPI).

The announcement was made on 9 November 2014, during a signing ceremony at the Asia-Pacific Economic Cooperation Summit (APEC), in Beijing.

The proposed Qinghai Delingha Solar Thermal Power Generation Project will be located in China’s Qinghai province to include six 135 MW CSP tower plants. The first phase will include two 135 MW solar thermal plants with 3.5 hours of thermal energy storage. Construction of the first two plants is expected to begin in 2015 and to be completed in 2017.

The feasibility study for the first phase of the Delingha project has been completed and is going to be reviewed by the Huanghe and the Qinghai Province Development and Reform Commission (DRC). Pending the Qinghai DRC’s approval, the National Development and Reform Commission will also approve and recommend a tariff for the project’s first phase.

BrightSource and SEC have submitted a proposal to Huanghe Hydropower Development Co., Ltd (Huanghe) for the construction of the first phase. As part of the proposal, BrightSource and SEC provided Huanghe with a term sheet regarding the proposed EPC services. The term sheet is subject to Chinese regulations and approval by Huanghe and the China Power Investment Corporation.

BrightSource had signed a Memorandum of Understanding (MOU) in July 2013 with the CPI and Huanghe, to be the technology supplier for project in China.

Reliance Areva CSP 1 connects to the grid

Reliance Power announced that its 125 MW CSP project in Rajasthan has commenced operations on 11 November 2014. The project has become the world’s largest operating Fresnel plant.

The CSP project was allocated to the company under the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010. Using Areva’s linear Fresnel technology, the project received an investment of approximately US $340 million. The funding was granted by a group of financing institutions, including the Asian Development Bank, the US Export-Import Bank and the Dutch development bank.

The off-taker is the NTPC Vidyut Vyapar Nigam Limited (NVVN) and it has a 25 years power purchase agreement to deliver 100 MW.

In a written statement, the company indicated that with this project it has increased its generation capacity to 5,285 MW, including 5,100 MW of thermal capacity and 185 MW of renewable energy based capacity.

MEIL’s 50 MW CSP plant starts commercial operation

Following the Reliance Power announcement, Megha Engineering and Infrastructure (MEIL) revealed it has successfully connected its 50 MW CSP trough project to the grid. The plant is located in the Andhra Pradesh State, in India.

The company was awarded the contract under the first phase of the JNNSM, in January 2010. The CAPEX of the project was approximately US $138 million and it was financed by a group of lending institutions led by the IDBI Bank.

The off-taker is the NTPC Vidyut Vyapar Nigam Limited. In a written statement, Uma Maheshwar Raddy, Associate Vice-President of MEIL, said the company expects to generate revenues of around US $17,8 million per year from the solar plant.

Abengoa’s bonds fell following concerns about its financing capacity

A Bloomberg report indicates the bonds plummeted due to confusion over the degree of security offered to investors by the company to refinance mature bonds.

“Bondholders understood that $630 million of high-yield notes in euros and dollars issued in September were so-called recourse debt, which allows creditors to seek claims directly from the company in case of default. The developer said the notes were accounted for as non-recourse, which allows claims only on collateral assets, when it reported earnings this week”, it said.

The article cited Daniel Vaun, analyst at JPMorgan Chase & Co., explaining that “the reclassification of this debt as non-recourse had unsettled investors. Abengoa’s ability to finance itself in the future may be in jeopardy.”

Abengoa has €300 million ($375 million) of bonds maturing in February and €500 million due March 2016, as indicated by Bloomberg.

The company’s €265 million of 5.5% bonds dropped 23 cents on the euro to 65 cents at 5:10 p.m. in Madrid, pushing the yield to 16%. Its $300 million of 6.5% notes declined 26 cents on the dollar to a record 72.2 cents.