Interior Department Approves Solar Millennium’s Blythe Project

DFN: The Federal Government just gave the ‘green light’ for a 1,000MW solar thermal plant to be constructed near Blythe California. This is the latest in the government’s short list of projects which have been approved.

Huge Solar-Plant Project Approved

A proposal to build the world’s biggest solar-thermal power plant in the Southern California desert got the go-ahead Monday from the Obama administration, which used the announcement to bolster its message that renewable energy creates jobs.

The $6 billion project is being developed by Solar Trust of America, a joint venture between Germany’s Solar Millennium AG and privately held Ferrostaal AG on 7,025 acres of federally owned land near Blythe, Calif. The approval clears the way for the developers to seek federal grants and loan guarantees.

The Obama administration has been criticized over the past year for hurting job creation by holding up coal-mining permits and suspending deep-water drilling in the Gulf of Mexico after the worst offshore oil spill in U.S. history.

The Obama administration said the Blythe solar-power project will create 1,066 jobs at the peak of construction and almost 300 permanent jobs to operate the facility.

The project is the sixth solar-energy installation approved for public lands. The Interior Department said in total the projects could generate as much as 2,800 megawatts of electricity, enough to power two million homes. California regulators have approved or plan to approve a total of nine solar-thermal power plants for the state.

Siobhan Hughes discusses plans to build the world’s largest solar plant, approved by the U.S. on Monday. Alternative energy companies are racing to start solar projects before federal incentives expire at year’s end.
.State and federal regulators pledged last year to work together to fast-track approval for a raft of large solar-power projects to enable developers to meet a Dec. 31 deadline required to take advantage of federal financial incentives.

The Interior Department’s action on the Blythe project coincides with the final days of a hard-fought battle in California over a ballot proposal that would suspend a 2006 state law that required action to cut the state’s greenhouse-gas emissions.

The federal approval allows Solar Trust to start construction on the plant this year and take advantage of government incentives that would reduce the cost of the project. In order to receive cash grants in exchange for unused tax credits, a popular but expiring program, companies must break ground on projects or spend 5% of construction costs by year end.

The estimated cost of the first two units of the Blythe plant is $3 billion.

The company could be eligible for a $900 million cash grant for the first two units from the U.S. Energy Department and the U.S. Treasury Department in lieu of a tax credit.

Unlike familiar photovoltaic solar panels, solar-thermal plants utilize curved mirrors that direct the sun’s heat to a central tube in which steam is generated to drive turbines.

Driving demand for solar energy is a California state mandate that requires utilities to get one-third of their power from renewable sources by 2020. The mandate is part of the state’s climate law. Advocates of solar power say the planned projects could create thousands of jobs in the economically hard-hit state.

Solar Trust is awaiting approval from the Energy Department for a federal loan guarantee for the first two of four total units. Deutsche Bank AG and Citigroup Inc. are working with Solar Trust to obtain project-equity and tax-equity investment, said Bill Keegan, a spokesman for Solar Trust of America.



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