UCILLA WANG, The Greentech Innovations Report, June 9, 2009
When Pacific Gas and Electric Co. announced a deal to buy solar power from a proposed 230-megawatt project last Friday, it shone a spotlight on a two-year-old company with a different business model than many startups who have inked similar deals with the utility.
The deal also raised the question: Who is NextLight?
NextLight Renewable Power, based in San Francisco, wants to be purely a power plant developer and owner. The deal with PG&E is the first power purchase agreement for the startup, which is funded by private equity firm Energy Capital Partners, said Jim Woodruff, vice president of regulatory and government affairs, in an interview Monday.
“We think the tech agnostic approach is a winning business model,” Woodruff said. “All the core skills that are necessary to develop power projects are the same” for solar or other types of power plants.
The company boasts managers who have experience developing power plants and transmission projects as well as negotiating renewable power purchases.
NextLight’s CEO, Frank De Rosa, worked for PG&E for 23 years and held various roles at the utility, including the director of renewable energy supply, before founding NextLight in 2007. Woodruff worked for Southern California Edison for more than 10 years, first as an in-house counsel and later as the manager of regulatory and legislative issues for the utility’s alternative power business.
NextLight has been developing other solar power projects on public and private land in western states, including a plan to install up to 150 megawatts of generation capacity in Boulder City, Nevada.
The Boulder City Council is slated to vote on whether to lease 1,100 acres of city land to NextLight tonight. The company would sell 3,000-megawatt hours of energy per year to the city if the project is built, Woodruff said.
PG&E signed the deal with NextLight after it had inked many power purchase agreements in recent years to buy solar power from startup companies with the ambition to both develop their own technologies as well as owning and operating solar farms.
Some of the projects seem to be moving along. A few have hit snags. The deal to buy power from Finavera, an ocean power developer in Canada, fell apart last year when the California Public Utilities Commission decided that the contract would be too costly to ratepayers (see California Rejects PG&E Contract for Wave Energy).
OptiSolar, which was supposed to build a 550-megawatt solar farm to sell power to PG&E, couldn’t raise enough money to operate its solar panel factory and develop solar farms.
First Solar, another solar panel maker based in Tempe, Ariz., bought OptiSolar’s project development business for $400 million in April this year. First Solar would use its own, cadmium-telluride solar panels, instead of the amorphous silicon solar panels OptiSolar was developing. PG&E has said that the power contract would remain in place.
NextLight, on the other hand, would pick different solar technologies instead of developing its own. The approach isn’t new – SunEdison was doing this before others joined the party.
But there is no guarantee that this approach would enable NextLight to deliver energy more cheaply, and neither NextLight nor PG&E would discuss the financial terms of their contract.
“Our priority is about diversification of the resources we use and the companies we work with,” said PG&E spokeswoman Jennifer Zerwer. “Contracting for renewable via [power purchase agreements] is beneficial because it helps grow that ecosystem of renewable development, and there is no risk to our customers.”
Rumors have been circulating about whether NextLight would use SunPower’s equipment for the 230-megawatt project, which is called AV Solar Ranch 1, particularly since the project’s website features a photo of SunPower panels.
Woodruff said NextLight hasn’t selected a panel supplier. The company and PG&E have agreed to use solar panels, but the utility wouldn’t have a final say on the supplier, Woodruff added.
Gordon Johnson, head of alternative energy research at Hapoalim Securities, also cast doubt on the SunPower rumor. “Based on our checks, we do not believe [SunPower] won the PPA with NextLight,” Johnson wrote in a research note.
NextLight plans to start construction of the AV Solar Ranch project in the third quarter of 2010 and complete it by 2013. The company said it would start delivering power in 2011.
The project would be located on 2,100 acres in Antelope Valley in Los Angeles County, Woodruff said. The company bought the property last year for an undisclosed sum.
The company would need approval from the Los Angeles County to construct the solar farm. The California Public Utilities Commission would need to approve the power purchase contract between PG&E and NextLight.
NextLight also is developing a power project with up to 425 megawatts in generation capacity in southern Arizona. The company is negotiating to a farmland for the Agua Caliente Solar Project, Woodruff said. The 3,800 acres are located east of the city of Yuma.
The company is negotiating with a utility to buy power from Agua Caliente, said Woodruff, who declined to name the utility.
NextLight hasn’t decided whether to install solar panels or build a solar thermal power plant for the Agua Caliente project. Solar thermal power plants use mirrors to concentrate the sunlight for heating water or mineral oils to generate steam. The steam is then piped to run electricity-generating turbines.
But solar panels appear to be a more attractive option than solar thermal for now, Woodruff said.
“We’ve concluded that, in the near term, PV is more cost effective,” he said.