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May 24, 2010
CalSTRS Invests in Solar Thermal Power Plants
    by Robert Kropp

The investment by the $139 billion pension fund will help BrightSource build 14 solar power plants in the US southwest by 2016

The California State Teachers Retirement System (CalSTRS), the second largest pension fund in the US with $138.5 billion in assets under management, has contributed to a total of $150 million in recent equity financing raised by BrightSource Energy, a developer of utility-scale solar thermal plants in the southwestern US.

The recently completed round of financing brought BrightSource’s total equity financing to more than $300 million. BrightSource, which has a contract to deliver 2,610 megawatts (MW) of power to Pacific Gas and Electric Company (PG&E) and Southern California Edison, plans to build 14 solar power plants in the US southwest by 2016. In February, the company received a $1.37 billion loan guarantee from the US Department of Energy for construction of the 392-megawatt Ivanpah Solar Electric Generating System in the Mojave Desert.

CalSTRS has publicly committed to examining the risks and opportunities of climate change since 2003, when it participated in the original UN Investor Summit on Climate Risk. By 2010, when the fourth summit was held, more than 520 investor, financial, and corporate leaders from around the world representing over $22 trillion in combined assets participated, according to the
Investor Network on Climate Risk (INCR).

In 2007, CalSTRS formed a Green Initiative Task Force to coordinate the fund’s investments in renewable energy projects. In addition to developing an equity program focused on investment in clean technologies, the Task Force called for environmental accountability and disclosure by corporations.

CalSTRS was joined in the round of equity financing for BrightSource by Alstom Power, a developer of power plants and services. Alstom’s $55 million investment in BrightSource was the company’s first in solar energy.

According to CalSTRS, Arnold Goldman, the founder of BrightSource, was involved with Luz International, the company that is credited with proving that solar power can be produced in large quantities at affordable prices. Between 1984 and 1990, Luz built nine Solar Electricity Generating Stations in the Mojave Desert, which are still operational.

BrightSource’s ambitious plan for the Ivanpah system in the Mojave Desert is not without its detractors. According to the
New York Times, the Sierra Club, Defenders of Wildlife, and the Center for Biological Diversity object to construction because of the potential for harm to rare plants and animals.

Other environmentalists object to the visual impact of the project’s 459-foot-tall towers, according to the Times. Nevertheless, staff members of the California Energy Commission recommended in March that the project be approved.


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