Timing is Everything
A federal loan guarantee program to boost renewable energy projects got the headline it's been looking for. That it took several years to bring the loan guarantee program this far is testament to the complexity of the program, stimulus money needed to back it up and the degree of economic turmoil renewable energy projects have faced over the past couple years.
Conditional commitments for more than $1.37 billion in loan guarantees under the American Recovery and Reinvestment Act (ARRA) to BrightSource Energy, Inc. were announced this week. The so-called Section 1703 program supports the construction and start-up of three utility-scale concentrated solar power plants for approximately 400 megawatts.
It was a long time coming. "We had originally applied for the 1703 loan guarantee in 2006 or 2007, but bringing a project like this was difficult as the credit market had become totally dysfunctional," said Keely Wachs, spokesman for BrightSource.
BrightSource had not looked at other government incentives as it was lining up this program through the Federal Financing Bank. Although the estimated project cost is not yet public, the guarantee cannot exceed 70 percent of the estimated cost, so the $1.37 billon is something less than that amount.
The project could still benefit from other energy incentives, like the cash grants in lieu of production tax credits that have been extremely successful in other renewable energy projects over the past few months.
The three-plant Ivanpah Solar Complex will be located on federally-owned land in the Mojave Desert in southeastern California, near the Nevada border. It will be the world's largest operational concentrated solar power complex. BrightSource is still undergoing environmental reviews, seeking local, state and federal regulatory approvals. The Bureau of Land Management will continue leading a National Environmental Policy Act review. The project was recently shrunk to satisfy some environmental objections.
The first plant is expected to begin construction in the second half of 2010 and come on line in 2012. Commercial operation for the second plant is slated for mid-2013 and the third later in 2013. Electricity from the project will be sold under long-term power purchase agreements with Pacific Gas & Electric and Southern California Edison Company. The project will be interconnected to the electricity grid via an upgraded SCE transmission line.
With some of the financing hurdles out of the way, that's one major milestone that took years to clear.
The editorial staff at RenewablesBiz.com is passionate about exchanging ideas and dedicated to promoting ongoing conversation about renewables and sustainable energy issues. We invite you to join and contribute to our online community. If you have an idea for an article or editorial contribution, please contact me via email, bopalka@energycentral.com, or phone, 860.633.0090.
