China is hungry for power – of the solar variety.

Shenhua Group Corp. of Beijing has signed a memorandum of understanding with Santa Monica’s SolarReserve to build solar thermal plants in China that generate up to 1,000 megawatts of electricity.

Upon completion, the plants could power more than 1 million homes, said SolarReserve Chief Executive Kevin Smith, adding that construction costs for the Chinese plants could potentially top $4.5 billion.

The deal is SolarReserve’s largest to date. Its first concentrated solar power project, a 110-megawatt plant outside Tonopah, Nev., powers 75,000 homes in that state as part of a 25-year deal to sell energy to utility NV Energy.

“It could potentially be eight to 10 towers like we have in Nevada,” said Smith, noting the plants would likely be built in western China, where sun intensity is greater, to feed energy consumption in the country’s eastern cities.

The Chinese government is aiming to construct enough concentrated solar power plants over the next five years to generate 10,000 megawatts. The plan is part of a series of initiatives to increase electricity generation while reducing reliance on coal-fired plants, said Smith.

Shenhua, a state-owned coal mining and power plant company, would build, operate, and fund the solar thermal plants. SolarReserve would supply the technology. SolarReserve’s plants use an array of mirrors to focus light from the sun into a central tower filled with heat-conducting molten salt. That heated molten salt is stored in tanks and used to steam-generate electricity when the power grid demands it.

“The key component from SolarReserve is the receiver component, a heat exchanger that sits on top of the tower,” said Smith. “The receiver is largely a U.S.-manufactured component and the intent is to keep that as a U.S.-manufactured component.”

Foreign-owned firms are often required by the Chinese government to form joint companies or give away some technology to local corporations in order to do business in the country. However, SolarReserve won’t be required to do either, said Smith.

SolarReserve’s Nevada facility – known as Crescent Dunes – cost $900 million to build, and it was financed partly by a Department of Energy loan. The company is also developing a 100-megawatt plant in South Africa and a 260-megawatt plant in Chile.

Revenue Discovery

Looking for another way generate revenue from its more than 100 million daily users, Snapchat has begun testing e-commerce ads.

The 10-second video advertisements link to an in-app internet browser that allows users to shop sponsors’ e-commerce sites. L’Oréal cosmetic brand Lancome and Target Corp. started running ads late last month.

Snapchat has been experimenting with various ad products over the last 18 months. The Venice company is working to capitalize on its tens of millions of millennial users, each of whom spend of 25 to 30 minutes on the app each day, according to reports.

There are generally two approaches when it comes to purchasing ads on new internet platforms, said Farbod Shoraka, chief executive of online flower seller BloomNation of Santa Monica.

“One is you become an early adopter because that might be your opportunity to capture an audience on the cheap when the pricing hasn’t been calibrated correctly yet,” said Shoraka, noting that’s how many approached Facebook early on. “Or, there are other companies that will want to see more data and performance before they jump in.”

Larger retailers, which have already saturated other advertising channels and are looking for better performance at the margins, could be best positioned as early adopters of Snapchat, said Shoraka.

“My prediction is you will see a lot of big brands on there because they have the marketing budget and they have exhausted the other channels,” he added.

In particular, brands seeing diminishing returns on paid-search campaigns might benefit from being discovered on Snapchat, said Daniel Bornstein, senior vice president of media monetization and operations at Demand Media, a Santa Monica internet portfolio company that owns print seller Society 6 and fine art marketplace Saatchi Art.

“This is not only about being where the millennials are but it is also about active versus passive discovery,” he said, adding that active channels, such as paid search, can only take a brand so far. “There are only so many searches to buy and social is the new darling of discovery and audience acquisition.”

But Snapchat’s new ads might not be for everyone, said Shoraka.

“I would caution the smaller companies that don’t necessary have that massive budget. … Wait and see isn’t necessarily a bad thing.”

Rebooting

Westwood’s eHarmony Inc. has promoted Dan Erickson to vice president of Elevated Careers. Erickson led the development of the hiring platform as the division’s general manager.

Staff Reporter Garrett Reim can be reached at greim@labusinessjournal.com or (323) 549-5225, ext. 232.

For reprint and licensing requests for this article, CLICK HERE.