Anil Srivastava, senior vice president of AREVA's renewable energies business group, tells Recharge the company sees a large market potential in concentrating solar power (CSP), the opportunity to leverage its expertise in steam-driven generation and an industry in need of large-company credibility.

“We know a lot about steam generation and how to build power plants using steam turbines better,” Srivastava says.

Financial details of the transaction, expected to close in the next few months, were not disclosed. Srivastava says the terms were "in line" with similar deals in the industry.

Ausra had received $130m in funding from some of the biggest names in clean energy venture capital investing, including Khosla Ventures, Kleiner Perkins Caufield & Byers, KERN Partners, Generation Investment Management and Starfish Ventures. Srivastava says Ausra's investors “know how to negotiate, I can guarantee you that”.

AREVA and Ausra had been in discussions, including a detailed technology review, for almost two years, says Ausra chairman and chief executive Robert Fishman. As Recharge reported in November, three large international power generation companies were in acquisition talks with Ausra.

The acquisition will add CSP technology to AREVA’s current renewable energy portfolio, which includes off-shore wind in Europe, bioenergy globally, and emerging hydrogen and storage plays, Srivastava says.

AREVA selected Ausra’s technology because of its competitive levelised cost of electricity. “The cost of electricity is critical,” he says. “.. . We’ve got to drive this industry toward grid parity.”

Srivastava says AREVA will bring to the CSP market “the most comprehensive offer in the industry” comprised of Ausra’s technology, which the companies claim is the most land- and water-efficient CSP solution available; AREVA’s expertise in global power plant engineering, procurement and construction, and operations and maintenance; and AREVA-backed project performance guarantees, required to make projects bankable.

Founded in 2006, Ausra was reaching the limits of what it could achieve as a young company with a limited balance sheet and operations history, Fishman says. A little more than a year ago, the company had to lay off employees as it changed focus from project development to manufacturing equipment for generating solar steam to be used in industrial and energy-generating applications. Ausra continued that transition in 2009, divesting of its planned projects.

Fishman says customers responded well to the technology, but balked at signing huge contracts with a small company. "The customers say, ‘We really like your technology, but before we’re going to give you a contract for $100m or $200m, we need to know that you have the financial wherewithal and project execution capability to make this a reality,'" Fishman says.

AREVA gives customers the 'commercial comfort' to go forward, he says.

That's important to building the credibilty of the broader CSP industry, which Fishman says has seen plenty of power purchase agreements announced, but too few projects breaking ground.

"Getting projects financed is the hard part," he says. "Unfortunately, all these announcements without any projects starting does a disservice to the industry. We’re going to do projects."

The combination of AREVA and Ausra will be able to “execute in a way that will restore some credibility to the industry, as opposed to just people announcing projects that don’t happen," says Fishman, who will lead AREVA's global solar business.

AREVA intends to invest aggressively in the CSP business. It will market its offering to utilities, independent power producers and industrial companies globally, but will initially focus on the Southwest US, Mediterranean Europe, the Middle East, India, South Africa and Australia – where Ausra got its start.

Srivastava says AREVA will retain Ausra’s 70 employees and look to add 40%-50% more workers right away in Ausra’s Mountain View, California, headquarters; AREVA’s research operations in France, where the company has an existing solar research and development project; and in sales and project execution in the initial target markets.