AREVA Sets Ambitious Global Goals for Concentrated Solar Power Business

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Walking among the estimated 1,200 exhibitors at the recent POWER-GEN International trade show in Orlando, Florida, something appeared out of place: Anchoring the renewable energy pavilion was the familiar red-on-yellow logo of AREVA SA (EPA:CEI) (Paris, France), the French nuclear giant. Didn't AREVA belong across the exhibit floor, in the nuclear power pavilion? Maybe there was a registration snafu? Or perhaps AREVA was late with its registration, and the only place to accommodate its 400-square-foot booth was in the middle of the renewable energy pavilion?

None of the above. AREVA Solar (Mountain View, California) had a number of employees at its booth eager to discuss the company's recent venture into non-nuclear, carbon-free electric generation options. Jayesh Goyal, vice president of North American sales at AREVA Solar, discussed the strategic moves that AREVA has made in recent years to broaden its carbon-free electric generation portfolio.

"AREVA has four business lines in its renewable energy unit," Goyal told Industrial Info. "We entered the biomass business in 2006 when we acquired Koblitz, a Brazilian engineering, procurement & construction (EPC) firm that had built over 2,500 megawatts of biopower generation." Today, that business is named Adage, and it is a joint venture of AREVA and Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina).

AREVA entered the offshore wind business in 2008 by acquiring offshore wind turbine maker Multibrid Technology (Bremerhaven, Germany). That business unit, renamed AREVA Wind, manufactures a five-megawatt (MW) offshore wind turbine. Today, six of these 5-MW turbines are deployed in a 30-MW offshore windfarm located about 27 miles off the coast of Borkum, Germany.

The third renewable energy business in AREVA's portfolio is a fuel cell and energy-storage business that is still in the research and development stage. AREVA entered this market by acquiring Helion in 2008, Goyal said.

AREVA entered the solar energy business in February 2010, when it acquired Ausra, a small venture, capital-backed concentrated solar power (CSP) company. That acquisition was part of AREVA's strategic objective to be the world leader in concentrated solar power (CSP), the company said in announcing the acquisition. AREVA expects the global CSP market to grow 20% annually for the next decade, and installed CSP generating capacity to exceed 20,000 MW by 2020. The company said the acquisition of Ausra puts it in a position to capture the leading position in the promising worldwide CSP market.

Acquiring Ausra allowed AREVA to rapidly enter the CSP market and fill out its renewable energy portfolio, Goyal said: "Prior to the acquisition, solar was the missing piece in our renewable portfolio." The acquisition included two operating CFLR projects: a 5-MW project in Bakersfield, California, and a 3-MW plant in New South Wales, Australia.

AREVA Solar's CSP technology, called Compact Linear Fresnel Reflector (CLFR), uses water, not oils, to generate super-heated steam to turn a turbine. CLFR's mirrors are flatter than the mirrors used in parabolic CSP systems, which reduces the amount of glass used in AREVA's systems by 20-30% and shrinks the footprint of AREVA's projects. Goyal said that AREVA Solar needs only about 2 acres per MW of generating capacity, compared to 6-9 acres per MW of generating capacity for other solar technologies. AREVA's technology also uses 90% less water compared to wet-cooled CSP plants, the company said.

The CFLR technology "allows us to leverage AREVA's expertise in steam management. If there's one thing AREVA knows, it's how to make and manage steam," Goyal said with a smile.

Goyal said that AREVA is negotiating potential projects with several large renewable energy developers, though he declined to name names. "The typical project size for us in the U.S. would be about 140 MW," he said, adding that overseas, the company is assessing opportunities ranging from 50 MW to 250 MW.

A 50-MW CLFR project would cost between $3.3 million and $3.5 million per installed MW, while a 125- to 150-MW project could be built for $2.8 million to $3 million per MW, he told Industrial Info. Costs fall to about $2.5 million per MW for projects about 250 MW. Goyal said that AREVA's technology was competitive with photovoltaic (PV) generation.

Interviewed days before the U.S. granted a one-year extension to its Section 1603 cash-grant program for renewable energy, Goyal said AREVA Solar's business model "does not depend on the continuation of the Section 1603 program. AREVA can monetize the investment tax credits through other means. For us, it is a matter of convenience, not a fundamental basis for the business. We, and our prospective partners, have an appetite for tax-advantaged programs."

Goyal said that AREVA Solar is scouting projects globally, including in the U.S., Australia, India, Middle East, North Africa and South Africa. In the U.S., he said the markets with the best solar resource are in Arizona and Southern California, followed by Nevada, New Mexico, Texas and Colorado.

"Within three years, we expect to have over 1,000 MW of projects under construction around the world," Goyal said.

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