Solar Thermal Technology Adds Another Big Boy In GE

General Electric Co. is the latest industrial behemoth to get into the solar thermal power space, with an up to $40 million investment in eSolar Inc., via its GE Energy business unit, along with a licensing agreement.

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With GE in, the game now includes Alstom, which is a backer of Brightsource Energy Inc.; Areva SA, which has started bidding and winning business with solar thermal technology it bought from Ausra Inc. last year; and Siemens, which is in the market using technology from Solel, which it purchased in 2009.

All of these technologies use solar rays to heat up a liquid, turn it into steam, and power a steam turbine. Each has different configurations, efficiencies, and optimal size of their power plants, as well as costs.

“It’s clear that the world’s leading power companies see solar thermal as a critical resource for meeting the world’s growing needs for cost-effective and reliable energy,” wrote Keely Wachs, spokesman for Brightsource Energy, in an email to VentureWire.

With so many big players converging, competition for each utility contract clearly figures to heat up. Wachs says he has no problem with that — the important thing is that when big industrials line up behind solar thermal, the entire industry gets validated in the market’s eyes, which helps companies like Brightsource compete with photovoltaic and other renewable energy technologies.

“For a long time we were the only guys in solar thermal making noise,” said Wachs.

For the majors, links with solar thermal technology developers are not just about competing in the power business. Alstom, for example, has an agreement to sell steam turbines to Brightsource projects. GE also has a major turbine business that could benefit from a growing solar thermal market.

The big players have spent differing amounts of capital to buy into the solar thermal technologies.

Siemens paid $418 million for all of Solel in 2009, while Alstom paid about $150 million for an 18% stake in Brightsource, which is in registration to go public.

Terms of the deals for eSolar and Ausra weren’t disclosed, but both technology companies ran into some problems before linking up with the big companies. Ausra changed its strategy to licensing technology, because it saw power plant construction as too expensive for a venture-backed smaller company. And eSolar had an investor, NRG Energy, switch to using photovoltaics in at least one of its projects in California that was originally intended to use eSolar’s technology.

One investor in Brightsource Energy has said previously that sometimes corporate investors make the mistake of going after a worse technology simply because it’s cheaper. Brightsource says its technology is the most cost-effective and competitive. But it’s too early to say which technology would win on the market.

Brightsource’s first large power plant, the Ivanpah project in California, will cost $2.2 billion and have a power capacity of 400 megawatts, translating into $5.50 per watt. Areva, meanwhile, won a contract in April to add solar thermal power production capacity on a much smaller scale in Australia for just $2.43 per watt, though in that case solar would integrate with an existing coal power plant.