Abengoa Solar Likely to Get New Neighbors in Ariz. Desert

apslogoCalifornia might get all the attention for its solar resources in the Mojave desert, but it’s not the only Western state with sun-soaked lands and a growing appetite for solar power. Arizona’s largest utility, Arizona Public Service, unveiled a plan today to invest $18 billion in clean energy and energy efficiency by 2025, and the project calls for more than 1,660 MW of new renewable generating capacity, primarily from solar. APS said in its announcement today that it hopes to construct more solar plants like the project (pictured) it has contracted Abengoa Solar (s ABG) to build near Gila Bend — giving the Spain-based firm either new competition, new projects or both.

Abengoa's Solana Generating Station

Arizona’s renewable portfolio standard requires utilities to generate 15 percent of their energy from clean sources by 2025. APS proposes to build 1,000 MW of solar power capacity, financed directly or through power-purchasing agreements with outside developers. First up: a 280-MW concentrating solar plant being built by Abengoa, which has stated a goal of building and operating large solar plants across the Southwest in partnership with utilities.

APS and Abengoa announced the solar deal in February of 2007, but the Spanish firm said all bets were off for the so-called Solana project unless Congress extended the investment tax credit.

Well, the credit passed and now APS and Abengoa say Solana remains on track to come online in 2012. Last month, however, Abengoa said it would have to wait for financial markets to improve before it could finance the project, estimated to cost more than $1 billion. That’s about how much the company has pledged to invest in solar thermal plants each year for the next five years. If APS’s plan gets the greenlight, it may try to lure some more of that investment out to the Arizona desert.