BrightSource Energy IPO coming soon

BrightSource Energy IPO signals momentum as CSP heliostats, enhanced oil recovery steam, and the Ivanpah project progress; Chevron Coalinga deployment, DOE loan guarantee, and partners Bechtel and NRG Energy bolster large scale commercialization.

BrightSource Energy Inc is likely moving toward an initial public offering in 2011, a person close to the company said, after the U.S. solar concern proves its technology at a California oilfield.

The company, long the subject of speculation about when it might go public, has been waiting for milestones such as breaking ground on its 370-megawatt Ivanpah solar plant in the California desert, where a SoCal utility agreed to buy power from the project ahead of construction.

It broke ground on the plant, which will generate enough power for more than 100,000 homes, in October.

But more important is deployment of an enhanced-oil recovery system at a Chevron Corp oilfield in Coalinga, California, that uses BrightSource's solar technology in a 29-megawatt steam-generating plant.

"Investors are really looking at this steam plant as being the most significant" to launch pre-IPO, the source said, especially after a $1.6 billion guarantee underscored federal backing, because BrightSource's technology has not yet been proven on a large scale. The source asked not to be named because the plans have not been made public.

BrightSource spokesman Keely Wachs declined to discuss the date of a potential IPO for the company. "We don't ever comment on speculation or rumor," Wachs said.

The base technology at Chevron's Coalinga oilfield is essentially the same as at BrightSource's Ivanpah plant, which is slated to start generating electricity in 2012.

The technology works through using thousands of heliostats, or mirrors, to direct sunlight toward a water boiler. The steam generated by the boiler gets injected into oil wells to heat up heavier oil and make it easier to extract. At Coalinga, the system will replace some steam production now powered by natural gas.

The IPO market for solar companies was red-hot a couple of years ago, but cooled with the financial crisis even as government funding continued supporting green energy, and as a glut of low-cost Chinese equipment flooded into the market, sending prices for solar panels plummeting. Analysts expect the broad market for IPOs to pick up next year.

Some alternative-energy related IPOs did well this year, such as electric-car maker Tesla Motors Inc. Its shares debuted at $17 and are now trading in the $30s.

But the environment has not been friendly to all green companies. Solar-panel manufacturer Solyndra Inc, which is facing tough competition from low-cost manufacturers, had to pull a planned $300 million IPO in June, citing market conditions.

BrightSource has a $1.37 billion conditional loan guarantee from the U.S. Department of Energy to help fund its Ivanpah plant, which it is partnering on with engineering company Bechtel and NRG Energy as a partner.

Overall, BrightSource has raised about $330 million from backers including DBL Investors, Draper Fisher Jurvetson, Google, and VantagePoint Venture Partners, and it later secured $1.37 billion in loan guarantees to support Ivanpah as well.

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