BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant

BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant

By
Donald Kennedy, Debra Schifrin
2013|Case No.P84| Length 24 pgs.

The case presents the challenges confronting BrightSource, a company building a commercial-scale concentrated solar power plant in California in 2013: 1) environmentalists wanted to protect a threatened species at the site of the new plant, 2) competing solar power technology had become much cheaper in recent years, and 3) the company had been unable to get investors for its new thermal storage technology, which could be a game changer for the industry.
When BrightSource was in the planning stages of Ivanpah, a 400-megawatt solar power plant in the Mojave Desert, the company encountered opposition from environmentalists because the federal land specifically set aside for the facility was also the habitat of the desert tortoise, a threatened species under the Endangered Species Act. While solar energy was a positive step toward increasing renewable energy resources, and Ivanpah would power 140,000 homes during peak hours, local environmentalists were equally concerned about the survival of the desert tortoise. The case describes the steps BrightSource took to respond to the concerns raised by the environmentalists and build the plant, addressing both climate change and protecting local habitats.
Company management also faced challenges from the changing economics of generating solar power due to developments in competing systems and technologies. Students are asked to consider whether the technology that BrightSource is using, Concentrated Solar Power (CSP), is the right choice for the future of the industry, given that the cost of competitors’ technology, Photovoltaics (PV), had dropped dramatically in the previous few years. BrightSource also had a new thermal storage technology that would allow it to provide electricity on cloudy days, thereby significantly increasing output and the profitability of future power plants, but investors so far had not come on board, citing the risk and expense of the building out the technology.

Learning Objective

The dual objectives of the case are: 1) teach students about the expected and unexpected financial, environmental, and technological challenges that can arise for a renewable energy company building a commercial-scale facility, and 2) teach students about the evolving economics and technologies of the solar energy sector. The goal is for students to be able to design a multi-year strategic plan for BrightSource as it moves into 2014, and make informed predictions about what the solar energy sector will look like in 5, 10 and 20 years.

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