Court approves BrightSource purchase of 500 MW Palen Concentrated Solar Power project

On Wednesday, June 27, a Delaware court approved BrightSource’s request to purchase the 500-megawatt Palen Solar Power Project, a major step forward in fully acquiring the site. Last week, BrightSource won the bid for the project, which is being sold as part of Solar Trust of America’s bankruptcy auction. BrightSource and Solar Trust of America will now work together to satisfy the conditions of the sale before the acquisition can be completed. We anticipate that the sale will be finalized in July.

The Palen project is an excellent fit for BrightSource’s portfolio of future development sites because it is partially permitted, has access to transmission lines and is located in an area with very strong solar resources. The project spans 4,230 acres of public and private land, approximately 10 miles east of Desert Center in Riverside County, Calif. It can accommodate two of BrightSource’s 250 MW solar power tower plants. The project can interconnect to the California grid at the nearby Red Bluff substation, which is under construction and on schedule to be completed in December 2013.

Palen is currently partially permitted as a solar thermal parabolic trough plant. We intend to convert the project to the company’s proprietary solar thermal power tower technology, which we believe is the most cost-effective resource to provide our utility customers with reliable and dispatchable clean power.

BrightSource and Solar Trust will need to satisfy a number of conditions before closing the sale of the Palen project, including the transfer of the California Energy Commission (CEC) permit from Solar Trust of America to BrightSource. This petition is currently pending and will be heard by the CEC on July 11, 2012.

If the sale closes, we will amend the project’s Application for Certification to address the change of technology. The Bureau of Land Management (BLM) will also update its environmental impact statement to ensure compliance with the National Environmental Protection Act.

We are pleased to have the opportunity to build a solar thermal power tower plant at the Palen solar site, and to deliver cost-effective and dispatchable clean power to our utility customers.

A Brief History of the Palen Concentrated Solar Power Project

The Palen project was originally developed by Solar Millennium and designed as a solar thermal parabolic trough plant. In 2009, Solar Millennium created Solar Trust of America as a joint venture with German industrial giant Ferrostaal to build solar thermal power project in the American Southwest. The project received its permit from the California Energy Commission in December 2010 and was in the final stages of permitting with the Bureau of Land Management.

In mid-2011, other parties expressed interest and attempted to purchase projects from Solar Millennium, with the intent of converting them from the CSP solar trough technology to solar photovoltaic (PV) technology. Those attempts were never finalized and no amendments were ever made to the permit or other key project agreements.

Solar Millennium declared bankruptcy in December 2011 and discontinued funding of Solar Trust of America. Solar Trust of America declared bankruptcy in April 2012. The Palen project was made available as part of the auction of Solar Trust of America’s assets in June 2012. BrightSource was named the stalking horse bidder for the project on June 11, 2012 and secured the highest bid on June 21, 2012. On June 27, the court approved the sale. BrightSource and Solar Trust will now work together to satisfy the conditions of the sale before the acquisition can be completed. BrightSource intends to develop the project using its own proprietary CSP power tower technology.