BrightSource Ashelim renewable energy bid cut by 30%

The $1.5-2 billion renewable energy tender is for building three solar power stations.

The state is cutting US BrightSource Energy, Inc. and French Alstom Power's Ashelim bid by 30%. This is the country's flagship tender in the renewable energy sector, through which three solar power stations will be built at an overall cost of $1.5-2 billion. The BrightSource and Alstom consortium, Megalim Solar Power Ltd., was the only party to bid for Area B, upon which a thermosolar station will be built with 120 megawatt capacity based on solar tower technology. The estimated cost to build the Megalim station is $600 million.

Israel announced in September that it is postponing the Megalim bid after examining the bid details. Sources inform ''Globes'' that the Megalim bid is based on a price of NIS 0.115 that the franchisee will receive from the state for every kilowatt of electricity the station produces for twenty-five years.

Sources also inform ''Globes'' that, a few days ago, the state offered Megalim a counter-bid. The parties have all signed a confidentiality agreement, but "Globes" has learned that the bid is based on a price of NIS 0.80 per kilowatt of energy, which is a reduction of 30%.

The Megalim group said that they are prohibited from discussing details of the bid while negotiations are still underway. Germany's Siemens Concentrated Solar Power Ltd.'s (formerly Solel Solar Systems) Negev Group and Shikun u'Binui Holdings Ltd. (TASE: SKBN) are still waiting for a response from the state on a bid they submitted in February 2011. Megalim's bid is higher than the price that the Public Utilities Authority (Electricity) agreed to give large solar PV technology systems, which is currently NIS 0.98 per kilowatt. "Globes" had previously reported that the Negev Group's bid is higher than the rate offered in its arrangement.

Ashelim, one of the largest and most complex current projects in the world in the solar energy sector, includes building two thermal-solar stations with a 125 megawatt capacity, and a PV station with a 30 megawatt capacity. The stations will be required to build electricity storage capacity, and will operate natural gas turbines as backup for the station operations. At the same time, there are also significant concessions in the tender, such as lengthening the license to 25 years, lack of land and administrative costs, and a waiver of the requirement to hold equity and state guarantees in case the Israel Electric Corporation (IEC) (TASE: ELEC.B22) collapses.

Solar energy station in Ramat Hovav

Shikun u'Binui and Solar Hybrid are expected to bid for the tender to build a 35 megawatt capacity solar power station in Ramat Hovav. Sources inform ''Globes'' that other companies, such as Enlight Renewable Energy Solutions Ltd. (TASE:ENLT), Summit, Supergas, and Arava Power decided at the last moment not to bid for the tender. The NIS 400 million tender for the project closed yesterday. Ramat Hovav Industrial Council head Andrei Uzan said that the tender is expected to receive bids of up to NIS 60-70 million for the leasing of the grounds.

The project is located on 485 dunam (1940 acres) of land that was used in the past for evaporation ponds that were restored. The minimum price is NIS 3,500 per dunam per year, and the tenant is required to deposit half of the yearly rental fee as a guarantee upon winning the tender. The Council will receive 10% of income over NIS 50 million. The major advantage of the project is that it already has an approved master plan for a solar power station, as well as a building permit.

Published by Globes [online], Israel business news - - on January 25, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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