US president Obama and DOE secretary Steven Chu have approved huge loan guarantees to solar projects in the USA as part of the federal stimulus programme (the DOE’s Title XVII Loan Guarantee Program).
The largest beneficiary project among those announced is Abengoa's 250 MW Solana concentrating solar power (CSP) project in Gila Bend, near Phoenix, Arizona, which is backed by a $1.45 billion conditional loan guarantee. Solana, estimated to cost almost $1 billion to build, is among the largest CSP plants in the world and is Abengoa Solar’s tenth such plant. The loan slightly surpasses the recent $1.37 billion guarantee to Brightsource Energy for its Ivanpah tower technology CSP project.
Loan proceeds will be used for the construction of the Solana project, which will proceed in two phases. Phase one, permitting, has taken about two and a half years ("too long" says Abengoa’s CEO). Phase two, the actual construction of the project, will take another two and a half to three years. Construction is expected to start this year. In operation Solana will avoid the emission of 475 000 tons of CO2 per year compared to a natural gas burning power plant.
The Solana project is a trough-based system and incorporates six hours of molten-salt storage that also improves the dispatchability of the power. Abengoa says that the cost of electricity is not very different whether or not storage is used, but the value to the utility is improved, as Solana will be able to generate electricity well into the evening. The two-tank molten salt storage scheme is relatively new; Abengoa built a demonstration facility in southern Spain in 2008 and it has only been used in a few other solar projects, although molten salt technology has been used at different temperatures for storage in various applications in other industries.
It will have helped Abengoa’s case that it has emphasised its commitment to utilising US-made components wherever possible for the Solana plant. More than 75% of the equipment and supplies required to build Solana will be manufactured in the USA. These include steam generators, heat exchangers, power equipment, glass, steel, concrete and other construction materials. As a direct consequence of the construction of Solana, a mirror manufacturing factory will be built in Surprise, Arizona.
Abengoa Solar has signed a power purchase agreement with APS, the state’s largest electric utility, to sell the energy produced by Solana for a period of 30 years. In late 2009 it signed a power purchase agreement in California to supply electricity generated by a 250 MW CSP trough plant located in the Mojave Desert, 100 miles northeast of Los Angeles. The company is the only one worldwide building and operating both trough and power tower CSP plants.
•In February the US DoE announced $1.37bn in loan guarantees for solar energy firm BrightSource Energy to back the construction of three utility-scale concentrated solar power plants as part of its high profile Ivanpah solar complex in the Mojave Desert in south eastern California. The DoE said the project would deliver the world’s largest operational concentrated solar power complex and boast a combined capacity of 400 MW.
Boost for solar manufacturing
The US DOE has also offered Abound Solar a conditional commitment for a $400 million, seven-year loan guarantee to expand its manufacturing capabilities. The company will use $100 million of the new funds to increase production to 200 MW per year at its cadmium telluride thin-film photovoltaic solar modules at its Longmont facility, and to establish a second manufacturing plant in Tipton, Indiana. When both plants are fully functional, Abound Solar will be able to produce more than 840 MW of solar modules annually.
The deal is expected to reduce the cost of solar power for the company’s US and international customers.
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