Nabors has acquired Vast Technologies in a deal for the Australian solar company that is valued at up to $586 million, but this is not your basic solar or takeover deal.
Vast is merging with a company on the New York Stock Exchange created by Nabors to raise money to buy an unspecified energy technology company. When this deal closes, that corporation will be called Vast.
The estimated value of the new company will range from $305–586 million, with Nabors owning 8% and Vast shareholders, 38%, said Guillermo Sierra, a Nabors vice president in charge of energy transition initiatives. The final value will depend on whether current investors choose to cash out or take shares, according to the announcement from Vast.
Vast needs the $351 million it is raising from the deal to do its first commercial-scale projects after more than a decade of developing and field testing its version of concentrated solar power (CSP) generation and storage.
Unlike photovoltaic (PV) panels that directly generate electricity, CSP uses arrays of mirrors to focus sunlight on a receiver in a tower that is commonly used to heat molten salt. The heat from the molten salt can be used to generate steam to drive turbines or provide heat to companies ranging from chemical makers to food processers.
This sort of solar has been around for decades, and Nabors is not the first oil industry company to invest in one.
Chevron Technology Ventures was an early backer of a competitor, Brightsource Energy, which is still in the business. Its history dates back to picking up the remains of the failed company that built the first such plant in the 1980s, according to a story in Scientific American.
While CSP companies have built more than 100 concentrated solar facilities around the world, it has been surpassed by PV arrays that are simpler and cheaper to build and operate.
The downside of CSP is there are so many moving parts. Each of the thousands parabolic-shaped mirrors, known as heliostats, must track the sun to ensure the beam of reflected light remains aimed at the receiver gathering energy from the array.
That tests the operator’s ability to automate the process to adapt to changing conditions and keep the machinery running in harsh climates where sand can damage moving parts and cloud reflective surfaces.
And in most cases, the operation depends on a single tower, said Vast’s CEO, Craig Wood, during a post-announcement briefing.
“The problem is that to achieve efficiencies of scale, the towers are typically over 700 ft tall, have thousands of pounds of serviceable equipment at the top, and they’re subject to significant thermal process shocks. By definition, they are a single point of failure risk for the entire plant,” Wood said.
To limit those risks, Vast’s system uses multiple towers. In addition to reducing the power lost if one tower goes down, Wood said the standard design enables the heliostats to operate more efficiently. Also, the design is expected to reduce project costs by allowing them to build in modular increments.
Another incremental improvement is that the molten sodium is heated in the tower, rather than salt, which is widely used in the industry. Wood said sodium allows “superior thermal process control and it avoids having to empty out and restart the solar receivers on a daily basis.”
The heat of the molten sodium will be used to heat salt, which is stored in a tank for later use.
Going Commercial
The deal comes as Vast is looking ahead to scaling up its biggest operation, which is currently a 1.1-MW demonstration plant. Its next project is a 30-MW plant in Port Augusta in South Australia. It expects to have raised the money for that project within 12 months, with more than $120 million expected from the Australian government.
Nabors talked up its ability to help Vast grow. “We are confident that our expertise utilized in our core business—in automation, robotics, AI, and material science—can be applied to develop markets in adjacent verticals,” said Anthony Petrello, chairman and CEO of Nabors.
Wood described the future of CSP as an alternative energy source that includes storage for round-the-clock power, as part of hybrid systems made up of multiple energy sources such as solar panels plus concentrated solar—PV+CSP—to maximize power during the day and continue to provide power overnight.
He offered an extreme example of a hybrid system in Australia, which is “a 50-MW integrated hybrid PV+CSP+gas+battery plant that showcases the ability to combine multiple forms of generation to produce cost-effective baseload dispatchable power.”
In December 2022, Vast agreed to partner with two other Nabors-backed startups in the energy storage business: Natron Energy, which makes sodium-ion batteries, and Sage Geosystems, which uses geothermal to generate and store energy, according to its presentation.
It all sounds promising, but Vast’s future will depend on the success of its next two contracts leading to more work, according to its presentation, which ended with four pages of risk factors described in very fine print.
