Turning sun's rays into gold

DAVID MILLS - He's determined to get countries such as the United States and China off their nasty habit of burning coal. He's got the financial backing of two of the world's highest-profile venture capitalists, and the attention of former U.S. president Bill Clinton.

If David Mills gets his way, America's sun-bathed states and the deserts of Asia and Africa will become hubs of clean-power generation for their respective continents.

It's an ambitious mission for a mild-mannered Canadian – a former CBC camera technician from south Etobicoke and physics graduate from McMaster University.

But Mills, who left Canada in the early 1970s and spent the next 30 years of his career in Australia, moved back to North America in March to turn his lifelong dream – generating gigawatts of affordable, emission-free electricity from the heat of the sun – into a commercial reality.

"This is the most exciting time in my career," Mills, who turns 61 in November, told the Star during a telephone interview from his new office in Silicon Valley. "Better late than never."

Mills is founder, chairman and chief scientific officer of Ausra Inc., a Palo Alto, Calif.-based developer of solar-thermal power plants that, in his view, are poised in certain geographies to challenge the supremacy of fossil-fuel electricity generation.

Solar thermal power systems capture heat from the sun and create steam for generating electricity. The approach has existed for decades and, while cheaper than using solar panels to produce electricity directly, widespread deployment has been held back by high costs compared to conventional electricity sources and a number of technical hurdles.

Mills, inspired in the late 1970s by a scientific study out of the University of Chicago, has spent 30 years trying to refine the technology to the point where it can be scaled up to the size of a major power plant and compete on price with coal-fired generation.

This meant inventing a novel alternative to expensive parabolic mirrors and designing a simple system that uses commodity materials and has a way to store heat and supply electricity 24 hours a day. It's been a long haul, but Ausra says it has overcome the technical and economic problems and is ready to make history.

"We're considering many projects in many states at the moment, and all of them are feasible," explains Mills, estimating that California and Texas alone have the potential to supply 96 per cent of all electricity in the United States. "The amount of area we require to generate all of the United States' electricity is 145 kilometres by 145 kilometres."

It sounds large, but put into perspective, it's less area than the amount of U.S. land that's mined for coal. "It's also very small compared to the area of desert that's available," he says.

On a worldwide basis, the potential is huge. Greenpeace and the European Solar Thermal Industry Association concluded in a 2005 report that "there are no technical, economic or resource barriers to supplying 5 per cent of the world's electricity needs from solar thermal power by 2040" – equivalent to about 600 nuclear reactors or 1,200 medium-sized coal plants.

The numbers are probably higher today, given the advancements made over the past two years.

At the moment it's big talk, but some major players in the U.S. electricity sector are taking serious notice. Florida Power & Light, a subsidiary of FPL Group Inc., plans to use Ausra's technology to construct a 300-megawatt solar thermal power plant – starting with a smaller 10-megawatt project and expanding from there.

Former U.S. president Bill Clinton announced FPL's commitment last Wednesday at the 2007 Clinton Global Initiative in New York City. Ausra has other projects in the works, including a 175-megawatt plant in California that could end up feeding power to utility Pacific Gas & Electric Co.

A job notice on Ausra's website says the company wants to scale up its solar thermal deployment to 2,000 megawatts over the next three years, a fraction of the time it would take to get a similarly sized nuclear plant built.

"The whole picture is changing very, very rapidly," says Mills, adding that his technology is fast-approaching the cost thresholds for coal and natural gas, which in the United States are a cent or two below 10 cents per kilowatt-hour – and that excludes the strong possibility of future carbon taxes or caps.

"You'll be seeing 10 cents per kilowatt-hour bandied around Ausra, but that will drop very rapidly over the next few years."

The company is confident it can eventually push costs below 7 cents per kilowatt-hour at a time when fossil-fuel generation is getting more expensive, politically risky, and is encountering resistance in Kyoto-friendly communities.

"In the last six months interest has started to explode, and this coincides exactly with the cancellation of coal plants in the United States," adds Mills.

The competition will be intense, and there are many regulatory battles to win. Utilities are also a notoriously conservative, risk-averse bunch, and the strong lobby of the coal and nuclear industry is a force that can't be ignored. There's also the question of whether the transmission exists, or can be affordably built, to carry electricity from remote desert-like locations to major power-consuming centres.

Still, a supportive political climate, public anxiety over climate change, and the expectation that carbon emissions will eventually face some kind of cap or tax all work in Ausra's favour.

It was at the University of New South Wales in Sydney that he conceived of the "compact linear fresnel reflector," or CLFR. It's a design for a solar thermal plant that uses nearly flat rotating mirrors that focus the sun's light on a fixed overhead pipe filled with water. The sun boils the water, producing steam that spins a turbine to generate power.

Mills formed a company called Solar Heat and Power Pty. Ltd. to commercialize the technology, and while he did manage to build a small demonstration facility in a parking lot in Sydney, the business never gained traction Down Under and last summer the transplanted Canadian – at this point more Aussie than Canuck – began losing steam.

"I was very serious about retiring," recalls Mills.

Then came that call, that opportunity, which usually signals a turning point in Hollywood movies. Venture capitalists Vinod Khosla and Ray Lane, both partners with venture capital titan Kleiner Perkins Caufield & Byers (the firm that made early and successful bets on Google, Amazon.com and AOL), were alerted to what Mills was doing and wanted to learn more. They asked him to visit California for a meeting.

"In October we went over," says Mills. "We clicked really well."

Shortly after Khosla, through his own company Khosla Ventures, and Lane, representing Kleiner Perkins, agreed to invest $40 million (U.S.) for a 50-per-cent stake in Mills' company, which changed its name to Ausra. Both men also became directors on Ausra's board.

The money started to flow in February, Ausra relocated its headquarters to California in March, and since then Mills has expanded his workforce from six to 70.

"It's odd. You walk in each day and there's somebody new. But it's exciting, too. The quality of people is such that it's a great pleasure to solve problems."

Alan Mills is proud of what his brother has accomplished, not just as an entrepreneur, but also as an individual who has developed a practical approach to reducing greenhouse gas emissions and slowing down climate change. "He spent his career bringing the idea to fruition and now the technology is ready at a time when it is needed more obviously than ever," he says.

David's other younger brother, Brian, keeps an eye out for news on Ausra from the sidelines in Etobicoke. The whole Mills family is eagerly watching the Ausra story unfold, knowing full well that how America generates power over the coming decades will have a direct impact on the air quality and lives of Canadians.

"This could be a great Canadian success story," says Brian Mills. "A Canadian-born entrepreneur, scientist and innovator with a major solution for climate change."

He describes his ex-pat sibling as an "interesting" character. "Even," he adds, "if he is my older brother."