Just days after Southern California Edison canceled its power purchase agreement with the Calico project in California, owner Tessera Solar has walked away from its own project, reaching an agreement to sell the facility to San Diego developer K Road Power Holdings.
Terms of the deal weren’t disclosed, but talk about a fire sale…
K Road plans to fundamentally transform the project so that it generates some 750 megawatts of electricity from solar photovoltaic panels rather than solar thermal technology. Under the new plan, only some 100 megawatts will come from concentrating solar thermal technology. The project is expected to cost about $3 billion to fully develop and given the switch to PV panels will require new permits, . K Road’s K Road Sun subsidiary expects to secure financing and launch construction in 2011.
In a prepared statement K Road’s Managing Partner, Gerrit Nicholas said: We are excited to move the Calico Solar Project into a financeable position, and we look forward to developing, constructing, and operating one of the world’s largest solar projects.
K Road hired Credit Suisse as financial adviser and Dewey LeBoeuf as legal adviser.
The press release, announcing the Calico acquisition, says K Road is staffed by energy industry veterans from Sithe Energies and Goldman Sachs. K Road Solar has over 1,500 MW of photovoltaic projects in various stages of development, the same release points out.
Calico was initially developed by Tessera subsidiary Stirling Energy Systems, (both companies are owned by Irish group NTR), and was set to become a massive showcase of SES’s a solar dish technology known as SunCatcher. The dish-like devise and its curved glass mirrors act as solar concentrator, collecting solar energy that then power a four-cylinder reciprocating solar Stirling engine, to generates electricity. However, concern over the long-term technology viability of the SunCatcher devise, growing opposition from environmental groups, a tight project finance market and finally SCE walking away from Calico formed a perfect storm that paved the way to the K Road acquisition.