Nevada land approved for 500 megawatts of solar

Department of Interior approves third solar project to be built on public lands, but Solar Millennium awaits final approvals on energy purchase deal, water issues, funding.

A giant parabolic trough at Solar Millennium's pioneer project Andasol 1 in Europe, which has been grid-connected since December 2008. Solar Millennium

Secretary of the Interior Ken Salazar on Monday approved the Amargosa Farm Road Solar Project, the third major solar project to gain approval to be built on U.S. public lands.

The two 250-megawatt plants will be built by Solar Millennium, a German company that makes parabolic-shaped concentrated solar panels. Each plant will include a thermal energy storage system so that it can continue to supply electricity during cloud cover or at night for up to 4.5 hours per plant. Some of the solar-generated electricity will be explicitly directed toward powering buildings in Las Vegas, according to Solar Millennium.

When complete, the Amargosa Farm Road Solar Project should create about 200 permanent operations and maintenance jobs, and supply enough electricity to power 150,000 U.S. homes annually, according to the Department of the Interior (DOI).

Including the Amargosa project, Solar Millennium now has the potential to build 1,500 megawatts worth of solar energy projects in the U.S.

In September, California regulators approved four 250-megawatt solar plants near Blythe, Calif., using the company's concentrated solar troughs in conjunction with a deal signed with the Southern California Edison electricity utility. Solar Millennium is building the Blythe project in conjunction with Chevron subsidiary Chevron Energy Solutions.

But whether the Amargosa project has all its ducks in a row to move forward remains to be seen.

Solar Millennium itself openly acknowledged on Tuesday that while it has signed a memorandum of understanding with NV Energy, Nevada's electric utility, it has not yet signed a power of purchase agreement. The company also said it's waiting on approval for a government loan guarantee.

"In line with the financing structure of Blythe 1 and 2, an equity ratio of 20 to 30 percent is also planned for the Amargosa power plants. As with Blythe, we have already applied for the respective loan guarantees with the U.S. Department of Energy in order to secure the debt capital," Solar Millennium said in a statement.

That approval might not happen until the company gets approval from the government with regard to water rights.

"Due to the proximity to the Amargosa River, Solar Millennium must additionally seek approval with regard to the Water Clean Act from other U.S. authorities to obtain the final construction approval," the company announced Tuesday.

The Bureau of Land Management, which is part of the DOI, in October approvedthe use of public lands in California for the Chevron Lucerne Valley Solar Project and the Imperial Valley Solar Project. At the time, the government agency pointed out that the American Reinvestment and Recovery Act's special energy grants in lieu of a tax credits option made both projects eligible for approximately $273 million and $31 million in funding, respectively.

Solar Millennium stands to get the same type of deal for the Amargosa project, but it's looking to use loan guarantees as a way to secure more funding it needs to get that approval soon. The Recovery Act grants for solar and wind investment projects are set to expire at the end of 2010. While many have appealed to Congress for a two-year extension on the program, there's a good chance it will not be renewed.

Keep in mind that while the first three major projects to win approval through the new DOI have been dedicated to solar energy, the initiative is not exclusively intended to promote solar. The DOI is in the process of reviewing applications for geothermal, wind, and transmission line projects as well.

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