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 to solar energy.
The aid will support construction of the first two units of Solar Trust of America's 1,000 megawatt solar thermalthe DOE said yesterday. Solar Trust of America is a joint venture between German companies Solar Millennium and Ferrostaal.
"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, Calif., will be capable of producing 484 MW of electricity using solar thermal trough technology. The project will create over 1,000 construction jobs and 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 price tag 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 ax 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 on April 11 a $1.6 billion loan guarantee for BrightSource Energy's Ivanpah solar thermal project, and a day later announced a conditional commitment for a $1.19 billion loan guarantee for a SunPower 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."