London Tessera Solar has unexpectedly sold its showpiece Calico project in the Mojave Desert to K Road Power. The sale underscores the financial difficulties of Tessera's Dublin-based parent company, NTR. The deal is a surprising twist for the 663.5MW project, which received final approval from the California Energy Commission only two months ago. It was intended to launch Tessera as a heavy-hitting concentrating solar power (CSP) developer.
However, Calico became shrouded in uncertainty last month, when Southern California Edison told Tessera it had cancelled its power-purchase agreement (PPA) for the $3bn project. The sale to K Road, an independent power producer, is a huge blow for Tessera's sister company Stirling Energy Systems (SES).. It is also a setback for Stirling engine-based CSP technology generally, which, despite SES' pilot 1.5MW array commissioned in Arizona last year, is not yet seen as commercially viable. Tessera had planned to equip the entire Calico project with SES' parabolic-dish units, known as SunCatchers. But K Road now says it will reserve just 100MW for SunCatchers, with the rest of the capacity coming from PV.
Calico has languished for years under SES' ownership, having initially won a PPA with Southern California Edison in 2005.
The project received a shot in the arm in 2008 when NTR sank $100m into SES and created Tessera Solar to develop projects using SunCatchers.
But NTR revealed huge losses in its full-year 2010 financial results, and it acknowledges that bringing the SunCatcher technology to market will take longer than expected, due to continued tightness in capital markets and the rapidly increasing competitiveness of PV.
NTR's core business lies in recycling in the US and Ireland, but it has expanded rapidly into wind, solar and ethanol in recent years. The firm lost €285.5m ($382m) in its 2010 fiscal year, compared with a €45.6m loss the previous year.