Here’s another lucky winner of a federal loan guarantee program: The U.S. Department of Energy is offering a conditional loan guarantee of $737 million to SolarReserve to build a 110 MW solar power plant in Nevada, the DOE said Thursday.
Santa Monica-based SolarReserve hopes to finalize the loan guarantee in time to start construction on land managed by the federal Bureau of Land Management in 2011. The company plans to complete the solar power plant and start sending electricity to NV Energy in late 2013. The federal government signed off on the construction permit last December.
The loan guarantee is one of seven solar power generation projects selected by the DOE since the DOE launched the loan guarantee program in 2009. A government-backed loan guarantee is supposed to make it easier for the recipient to raise money from banks or other private sources; if the company can’t repay the loan, then the government will have to do it. But this DOE loan guarantee program is designed so that the recipients will get the loans from the Treasury’s Federal Financing Bank.
The loan guarantee program supports a variety of cleantech projects, from renewable energy generation to equipment manufacturing. It also is coming to the end of its currently budgeted funding. The loan program chief Jonathan Silver announced through a blog post last week that his staff was notifying companies that won’t be considered for the financial aid mainly because they won’t be enough time for these companies to go through the lengthy vetting process before the program ends on September 30 this year.
Since that blog post, First Solar announced that it’s still in the running for loan guarantees for three of its projects, in addition to the one called Agua Caliente that is getting $967 million. Tenaska Solar Ventures revealed that it wasn’t on the short list for two projects.
SolarReserve will use a technology that relies on flat mirrors called heliostats to concentrate and direct the sunlight to a receiver tank atop of a tower. The tank contains molten salt, which gets heated to generate steam for running an electricity generator. The design is similar to another power plant developer, BrightSource Energy, which is building a 392 MW project in California. BrightSource closed a $1.6 billion loan guarantee with the DOE earlier this year.
But unlike BrightSource, which uses water for steam generation, SolarReserve uses salt. Molten salt can hold heat for hours, so heated molten salt can be reserved for electricity production at night.
The DOE has been a big supporter of technologies that use of mirrors to concentrate the sunlight and use the thermal energy to produce electricity. Aside from SolarReserve and BrightSource, the DOE also has offered loan guarantees to two other solar thermal power plant developers: Solar Trust of America ($2.1 billion) and Abengoa Solar ($1.45 billion).
Solar thermal power plant projects require large swaths of land, so many of them are proposed for remote, public land in western U.S. This land requirement has pitted developers against environmental and local residents over the impact of their power plants on wildlife and recreational activities. BrightSource stopped part of its project earlier this year after finding more tortoises on its project site than previously expected. That discovery triggered a need to get a new environmental impact report, which is being prepared by the U.S. Fish and Wildlife Service.
SolarReserve is mostly owned by US Renewables Group, but its investors also include Good Energies, Citigroup, Credit Suisse, Nimes Capital, Pacific Corporate Group, CALPERS Clean Energy and Technology Fund and Argonaut Private Equity.
Image courtesy of SolarReserve