Areva Enters Global Solar Market with Acquisition of Ausra

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Researched by Industrial Info Resources (Sugar Land, Texas)--French power company Areva SA (EPA:CEI) (Paris, France) has confirmed the company's strategic objective to become a world leader in concentrated solar power with the 100% acquisition of Ausra (Mountain View, California), a leading provider of large-scale solar electricity and steam solutions.

The acquisition is expected to be formalized within the next few months, subject to the normal regulatory approvals. Areva will combine its financial and commercial strengths with Ausra's technology and management team to place the company in a strong position to capitalize on the growing market for concentrated solar plants.

Ausra has a proven track record within the sustainable renewable energy market. The company constructed the first solar thermal power plant to provide electricity in California for 20 years and, through its Australian operations, developed the world's first solar thermal power collector system for coal-fired power augmentation in New South Wales.

Areva will operate its solar power arm from Ausra's existing California location and is expected to expand the current base of 70 employees to a total of 120 worldwide. Areva will construct concentrated solar power facilities for independent power producers (IPPs), utility companies and industrial operations, aiming at both stand-alone power plants and adding solar-powered facilities to existing conventional power plants in the U.S., the Middle East, South Africa and Europe.

Some analysts have suggested that Areva's acquisition of Ausra could be connected to the massive Desertec project in Europe, a plan to construct an electricity transmission network between the north of Africa and Europe, sourcing approximately 15% of Europe's electricity requirements from solar plants in Africa.

Better known for its activity in the nuclear power industry, Areva was originally indifferent toward the plan, fearing that the project could disrupt the company's plans to construct nuclear power plants in Morocco, a country that will be heavily involved in the Desertec project. For additional information, see November 5, 2009, article - Morocco Launches $9 Billion Solar Power Generation Initiative as Desertec Plans Solar Project in Sahara.

However, last October, Areva's competitor Siemens AG (NYSE:SI) (Munich, Germany) announced that it had agreed to buy Solel Solar Systems Limited (Beit Shemesh, Israel), at the time owned by Ecofin Water and Power Opportunities Limited (LSE:ECWO) (Brentwood, England), for about 307 million euros ($418 million).

As one of the members of the consortium developing Desertec, Siemens is heavily involved in the project and saw the acquisition of Solel as a means of targeting the solar thermal energy market, stating at the time that the company "aims to be the global market leader in the solar thermal sector."

Areva and Siemens are not alone in their objectives and face competition from several other similar acquisitions and collaborations between large industrial companies and solar thermal companies with a view to gain ascendancy in the growing renewable energy market. A further example is the 50:50 joint venture between Ferrostaal AG (Essen, Germany) and Solar Millennium AG (Erlangen, Germany) to form MAN Solar Millennium GmbH (Essen) with the stated aim of becoming "the leading provider of solar thermal power plants worldwide."

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