LOS ANGELES (Reuters) - The U.S. Department of Energy is offering $2.1 billion in conditional loan guarantees to support what will be the world’s biggest solar power plant, the government’s largest commitment to date for to solar energy.
The aid will support construction of the first two units of Solar Trust of America LLC’s 1,000 megawatt solar thermal Blythe Solar Power Project, the DOE said on Monday. Solar Trust of America is a joint venture between German companies Solar Millennium AG and Ferrostaal AG.
“For the first time in mankind’s history, a solar power facility will be built at a scale and output capacity equal to the very largest coal-fired and nuclear power plants operating in the world today,” Solar Trust of America Chief Executive Uwe Schmidt said on a conference call with reporters.
The first two units of the project near Blythe, California are capable of producing 484 MW of electricity using solar thermal trough technology. The project will create over 1,000 construction jobs, 80 operations jobs, and will avoid greenhouse gas emissions equivalent to those generated by about 123,000 vehicles.
Solar Millennium’s technology makes electricity by using trough-shaped mirrors to heat a fluid that generates steam that turns a turbine. The Blythe project’s total pricetag is estimated at north of $6 billion, with the first phase costing about $2.8 billion.
The announcement came a week after the federal program to support clean energy technologies escaped the axe in the final U.S. budget agreement for the current fiscal year.
Since then, the Energy Department has announced commitments to help fund two other large solar projects in California. The government finalized a $1.6 billion loan guarantee for BrightSource Energy Inc’s Ivanpah solar thermal project on April 11, and a day later announced a conditional commitment for a $1.187 billion loan guarantee for a SunPower Corp 250 MW photovoltaic power plant.
California Gov. Jerry Brown last week signed a law that sets the state’s renewable energy target at one third of total electricity generation by 2020.
The DOE loan guarantee program for renewable energy has provided funding for projects whose new technologies have had difficulty securing financing from traditional lending sources. Since the financial crisis, lenders have been less willing to take on the risk of pouring money into unproven technologies.
“Today we are in a global race to develop and deploy clean energy technologies,” Energy Secretary Steven Chu said on a conference call with reporters to announce the loan commitment. “When we rev up the great American innovation machine, we can outcompete any other nation.”
Reporting by Nichola Groom; Editing by Tim Dobbyn