The United States Department of Energy pitched what could be its largest ever loan guarantee for solar energy for the first phase of a 1,000-megawatt project in the city of Blythe in California. The conditional loan guarantee the D.O.E. is offering is worth $2.1 billion, to be used in assembling the first half of Blythe solar thermal project in California’s Riverside County.
Solar Trust, a joint venture between German companies Solar Millennium and Ferrostaal, designed the project to house four 250-MW power plants with a net output of 242 MW each. The loan will help set the first two solar power plants at the site which, combined, will generate 484 MW of electricity connecting to an 8-mile transmission line.
The total cost of installing the two power plants will be roughly $2.8 billion, according to Solar Trust.
In offering a loan guarantee, the government proposes to secure Solar Trust’s loans to its creditors if the latter will default.
The loan guarantee is only the second largest of its kind that the Energy Department offered, but is the biggest for solar following a string of awards for several other solar power companies this April.
This month, SunPower and BrightSource were offered and granted $1.2 billion and $1.6 billion in loan guarantees, respectively.
A nuclear power plant in Georgia got $8.33 billion in conditional commitment.
‘An important role’
«Loan guarantees play an important role in facilitating the development and deployment of innovative technologies at massive scope and scale,» said Energy secretary Steven Chu.
«Continued investments like this project make solar power more efficient and cost competitive while creating thousands of jobs and strengthening the economy.»
BrightSource’s 392-MW Ivanpah project and Abengoa’s 250-MW Solana are solar thermal or concentrating solar power projects which use newer technologies like heliostat mirrors and power towers that can convert heat more efficiently to power, according to its advocates.
Solar Trust, however, said the parabolic trough plants it will use have been producing electricity for a decade. According to Concentrated Solar Power Today, as cited by the World Bank, 94 percent of solar thermal power plants operating today rely on troughs.
Generating a total of 1 GW, the Blythe solar project is said to become the world’s largest solar power plant and will double the world’s existing capacity of solar thermal power.
The Blythe project will use curved mirrors to capture heat from the sun that will heat up a fluid to produce steam.
Solar Trust has started construction last year. The first two power-generating units would be connected to the grid in 2013 and 2014. All of its output will be purchased by Southern California Edison under a 20 year contract.
Sunny California
California has long been the largest market in the United States for solar energy, thanks largely to its tough policies combined with generous subsidies that encourage both small-scale installation at homes and megawatt-scale facilities by solar developers.
The state’s three largest utilities had been required to procure 20 percent of their power from renewable sources by 2010. The state-passed bill expands that mandate to 33 percent by 2020 and extends the coverage to all utilities in the state, which Governor Jerry Brown signed last week.
The California Energy Commission approved nine solar power projects in just four months last year, decisions that drove even environmental groups to argue that the commission did not make sure that the projects will not have a significant impact on wildlife.
The state Supreme Court, however, dismissed two such lawsuits, filed separately by Sierra Club and California Unions for Reliable Energy, concerning the inadequate environmental review of the Calico Solar project last week.
