Ken Salazar’s Quick Pen Signs Off Sixth Solar Farm in 25 Days

Solar Millennium

Interior Secretary Ken Salazar has become a favorite in the solar business lately. He’s scheduled to appear tomorrow in a remote corner of California to take part in the groundbreaking ceremony of BrightSource Energy’s first solar power plant project in the country. Just yesterday, Salazar announced he had signed off on the 392-megawatt Blythe Solar Power Project, which, at 1,000 megawatts, is the world’s largest solar farm under development.

In all, Salazar greenlighted six massive solar power plant projects so far this month, four of them in California: Imperial Valley Solar Project, Chevron Lucerne Valley Solar Project, Calico Solar Project and Ivanpah Solar Electric Generating System (by BrightSource). The sixth project, Silver State North Solar Project, is set for Nevada.

Both Silver State (by First Solar) and Lucerne Valley (by Chevron Energy Solutions) will use solar panels, while the others will use mirrors to make use of the sun’s heat to produce electricity.

If it seems like Salazar is racing against the clock to approve these projects, well, he is. The Bureau of Land Management, part of the Interior Department, has put 14 solar farm projects on the fast track to gain approval before the end of this year, when a federal grant program for renewable energy projects is set to sunset. Most of the projects are proposed for locations in California, and the California Energy Commission also has been racing to bless nine projects this year and has given its nod to six so far. The commission’s approval isn’t required for projects that use solar panels.

The grant program, courtesy of the American Recovery and Reinvestment Act, is highly coveted by project developers because they could get incentives sooner than they would with an alternative incentive program that provides a 30 percent investment tax credit. The grant program is open to projects that are put into service in 2009 and 2010, and also those that begin construction before the end of 2010. Solar project developers have until Jan. 1, 2017 to complete their work.

Approving all these projects also looks good for an administration that is facing a tough mid-term election, where Republicans are expect to take seats away from Democrats and might even gain control of the House of Representatives.

Although Blythe project’s developer, Solar Millennium, has secured the all-important federal permit, it has yet to clinch the funding it needs to build the 1,000-megawatt solar farm. The company has applied for a $1.9 billion loan guarantee from the Department of Energy, an amount that would cover more than two-thirds of the first half of the project. The loan guarantee program can provide up to 80 percent of the cost of the project. This program, too, has been funded by the Recovery Act and produced hefty loan guarantees for solar project developers. BrightSource received a loan guarantee of $1.37 billion, which is translating into a loan from the U.S. Treasury’s Federal Financing Bank.

The federal loan guarantee program for renewable energy project (commonly called 1703/1705 because of the sections of the legislation that created it) is meant to bolster a company’s case as it seeks to borrow money from private banks. The government promises to pay back the loan if the company fails to do so. However, private banks haven’t been willing to lend money, so the government has been loaning the money instead, said Ebony Meeks, a DOE spokesperson. Abengoa Solar is finalizing its $1.45 billion loan guarantee for a project in Arizona, and it, too, will borrow from the Federal Financing Bank, Meeks said.

The Blythe project includes four power plants of 250 megawatts each. The four power plants will take up a total of 7,025 acres, but the entire project site is 7,541 acres in Riverside County, Calif., the company said. Solar Millennium hopes to start construction of two of the plants by the end of the year, of course, and expects to start delivering electricity in the second quarter of 2013. The federal approval comes with a requirement that Solar Millennium spends money to lessen the project’s impact on 8,000 acres of desert tortoise, western burrowing owl, bighorn sheep and Mojave fringe-toed lizard.

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Photo courtesy of Solar Millennium

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