E.ON targets Spanish solar sector with new joint venture

German utility E.ON yesterday announced the formation of a new 50:50 joint venture with Spanish firm Abengoa Solar that will see the firms own and operate two 50MW concentrating solar power (CSP) plants.

Abengoa has already begun work on the plants, which are under construction to the east of Seville in southern Spain and are expected to produce enough power to supply 52,000 homes and avoid carbon emissions equivalent to 63,000 tonnes.

The move, which is subject to approval from ERU competition authorities, marks E.ON's first entry into the thermal solar power market and Frank Mastiaux, chief executive of E.ON Climate and Renewables, said if the partnership proves successful, the firm will look to pursue more projects with Abengoa in Spain and the US.

"Solar power will be the next strong pillar in E.ON's renewables portfolio," he said. "Our entry into CSP complements our recent moves into the photovoltaic business and we will now stand on two feet in solar in the future."

Under the terms of the partnership, the companies will invest €550m (£500m) in the two plants, which are due to start operation in 2011 and 2012.

The plants will use parabolic trough technology, a solution developed in the 1980s and tested extensively by Abengoa Solar at other locations in Spain. The systems use large motorised mirrors which follow the movement of the sun throughout the day and reflect light onto a central point, heating a synthetic oil. The superheated oil is pumped from the solar farm to a nearby power plant, where the oil's heat is converted to high-pressure steam in a series of heat exchangers. This steam drives a conventional steam turbine.

Santiago Seage, chief executive of Abengoa Solar, said the projects would benefit from E.ON's expertise at managing large-scale grid connections. "Having E.ON as a partner in these projects will allow us to continue growing at the speed we want and to improve our capabilities in areas where E.ON has extensive experience," he said.

Both companies are also founding members of the Desertec Industrial Initiative, which plans to install huge solar plants in the deserts of North Africa and transmit much of the resulting energy into Europe.