LOS ANGELES, March 15 (Reuters) - U.S. solar companyBrightSource Energy Inc said Spain's Abengoa SA wouldbecome a partner in its 500 megawatt Palen project in theCalifornia desert.
The two companies will work jointly to permit and financethe solar thermal project, which will be built, operated andmaintained by Abengoa. The plant will use BrightSource'stechnology and design.
Construction on the $2.6 billion plant is expected to beginat the end of 2013, the companies said in a statement on Friday.It is expected to go into service in 2016. BrightSource wouldnot say which utility will buy the power produced by the plant.
BrightSource acquired the Palen project last year frominsolvent German company Solar Millennium AG. The project hasalready been permitted by the California Energy Commission, butBrightSource is now seeking approval to use a solar thermaltechnology that is different from Solar Millennium's.
The Palen project will consist of two 250 MW solar plantsthat produce steam from the sun's heat to generate electricity.At each plant, elevated mirrors called heliostats will focus thesun's rays on a solar receiver located atop a 750-foot "powertower" near the center of a field of mirrors.
In general, solar thermal technology has faced competitionfrom increasingly cheap photovoltaic solar panels. Several bigsolar projects underway in California switched plans to using PVtechnology from solar thermal because of the lower cost.
Solar thermal power plants use the sun's heat to producepower, while PV panels use sunlight.
The Palen project will be located on federal lands inRiverside County, California. It is expected to produce enoughelectricity to power 200,000 homes.
BrightSource, a small venture-backed company based inOakland, California, has raised more than $615 million in equityfinancing to date. It withdrew a planned initial public offeringlast year due to weak market conditions.
BrightSource is more than 20 percent owned by French powerequipment maker Alstom SA. Other investors includeVantagePoint Capital Partners, DBL Investors, Goldman Sachs Inc, Chevron Technology Ventures and BP Ventures.
The company's first major project, the $2.2 billion Ivanpahplant in California, is nearly complete. The 377 MW plant isbacked by a $1.6 billion government loan guarantee.
BP (BP.)
