Areva Abandons Solar and Shutters Its Ausra Concentrated Solar Effort

Going long on nuclear and CSP technology has not worked out for Areva.

Eric Wesoff August 04, 2014

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

French nuclear engineering firm Areva, suffering through a Fukushima-inspired sales slowdown in reactors, has exited its concentrated solar power business, according to Reuters.

Areva's solar unit consisted of what remained of the acquired startup Ausra and its compact linear Fresnel reflector (CLFR) solar steam generator technology.

We first wrote about Ausra in 2007, when the Palo Alto, Calif.-based CSP startup came out of stealth with more than $40 million in VC funding from Khosla Ventures and KPCB. The firm survived the greentech VC bubble and was acquired by French nuclear firm Areva in 2010, part of that company's bid to diversify its energy offerings. Ray Lane, a partner at Kleiner at the time, told me that KP was going to let Ausra "get caught" in what amounted to a modest bidding contest for the concentrated solar power (CSP) firm. According to then-CEO Peter Le Lièvre, Ausra was sold for $275 million.

As GTM reported, Ausra was founded in Australia as Solar Heat and Power, with technology based on research by David Mills, the developer of the evacuated tube technology used in much of the world's solar hot-water systems. In an early interview, Ausra VP John O'Donnell said the company had the potential to produce power at 6.7 cents per kilowatt-hour at scale with its mirrors, lenses, and thermal fluids.

As recently as last year, Areva was insisting that its CSP business remained viable. Areva cited the 5-megawatt Tucson Electric Power solar augmentation project, a 125-megawatt project in India, a 44-megawatt solar augmentation project in Australia and a potential CLFR/molten salt storage system.

The Reuters report claimed that the former Areva Solar generated about $134 million in 2013 revenue but was losing "tens of millions."

Solar thermal trough technology is difficult to make work economically. In 2009, German industrial giant Siemens bought solar thermal trough firm Solel for $418 million from founder Avi Brenmiller and other investors. In 2013, Siemens closed its CSP business, the remains of the acquired Solel, a firm that had lost more than $1 billion since 2011.

However, Abengoa, the Spanish-owned CSP developer, claimed that declining capital costs and improved efficiency levels will make CSP competitive with combined-cycle gas turbines on cost, efficiency and utility by 2020, according to the website RenewEconomy. Power tower architecture might fare better than troughs.

At the end of 2013, there were more than 12,000 megawatts of photovoltaics and 918 megawatts of CSP in the U.S., according to GTM Research. The U.S. installed 410 megawatts of CSP in 2013 and 517 megawatts in Q1 2014. Recently completed projects include:

Abengoa’s 280-megawatt Solana parabolic trough project in Arizona with six hours of storage, along with a power-purchase agreement from APS
250 megawatts from NextEra’s Genesis solar project
BrightSource Energy 370-megawatt (cumulative) Ivanpah Units One, Two, and Three pressurized steam solar power tower in California’s Mojave Desert with a PPA from PG&E and SCE

GTM Research says "the next notable project slated for completion is SolarReserve’s 110-megawatt Crescent Dunes plant, which entered the commissioning phase in February 2014," as noted in GTM's most recent U.S. SMI report. Crescent Dunes is a solar power tower outside Tonopah, Nevada, with ten hours of molten salt storage and a PPA from NV Energy.

Defunct CSP startups include Sopogy with its trough technology and Infinia with its Stirling engine. BrightSource has been rocked by challenges in finance, permitting, personnel, and regulatory domains. Other CSP firms include eSolar, which has moved to enhanced oil recovery (EOR) as a last hope, along with BrightSource. GlassPoint also focuses on EOR.

A combination of plunging PV prices, historically low natural-gas prices and a slowdown in big projects continue to create strong headwinds for growth in CSP. As GTM Research writes, "Declines in PV module costs have undercut trough technology and put it at a significant cost disadvantage. Since the beginning of 2013, 1 gigawatt worth of CSP projects have been suspended, and an additional 305 megawatts have been delayed."

FIGURE: Select Concentrating Solar Development Highlights (from the most recent U.S. Solar Market Insight, more report details here)