Solar Millennium and MAN Ferrostaal are jointly selling 74 percent of their 50-megawatt Andasol 3 project in Spain to Stadtwerke Munchen and a holding company created by RWE Innogy and RheinEnergie.
Before the sale, Solar Millennium and MAN Ferrostaal jointly owned 100 percent of Marquesado Solar, the company set up to develop Andasol 3. They owned Marquesado through a joint venture called Solanda.
After the sale, Stadtwerke would own 48.9 percent of Marquesado. The holding company for REW and RheinEnergie would own 25.1 percent. Solanda would keep the remaining 26 percent.
The solar thermal power plant is currently under construction in southern Spain.
Solar Millennium, based in Germany, also has built Andasol 1 and 2, at 50-megawatts each. Andasol 1 has been up and running while Andasol 2, which is completed, is in the testing phase, the company said.
Solar Millennium's CFO, Thomas Mayer, made an interesting comment in a statement about how the company has taken a different approach to financing Andasol 3:
"In contrast to Andasol 1 and 2, which were 80 % debt-financed, we have been increasingly pursuing two alternative financing models for new power plant projects: 100 % equity financing via major investors and fund models. We are pleased that we have been able to win such renowned utilities as investors. Our financing options are the guarantee of our success, even in times of difficult financial market conditions."
Solar thermal power comes from using heat to spur electricity generation. All three power plants use curved mirrors called parabolic troughs to reflect and concentrate the sunlight to heat up liquid inside tubes for harvesting steam. The steam is then used to run turbines for producing electricity.
Each Andasol project costs about €300 million for engineering, procurement and construction, said Rainer Aringhoff, president of Solar Millennium's U.S. operation, during a recent conference.
Aringhoff said a 50-megawatt project is small for a solar thermal power plant. Larger projects would drive down the costs and produce cheaper solar electricity. Spanish utilities are required to buy solar electricity at premium rates.
Spain offers attractive incentives to solar thermal power project developers, but those incentives are only good for projects that are 50 megawatts or smaller.
Solar Millennium is one of many developers eyeing the U.S. market. The United States doesn't have the same type of incentives as Spain, but it offers tax credits and loan guarantees.
U.S. utilities have been shown to prefer projects at a much larger scale. Solar Millennium announced only last month that it would build two power plants totaling 726 megawatts and sell the electricity to Southern California Edison.
Solar Millennium also has a 250-megawatt deal with NV Energy in Nevada. The utility hasn't disclosed whether it would invest directly in the project or simply buy the electricity through a long-term agreement, which has become a common practice.
Other companies that have announced projects include Abengoa Solar in Spain, BrightSource Energy in Oakland, Calif., Lockheed Martin in Bethesda, Md., Stirling Energy Systems in Scottsdale, Ariz., and eSolar in Pasadena, Calif.