On Friday 17 June 2011, U.S. Secretary of the Interior Ken Salazar and California’s Governor Jerry Brown will break ground on the solar-thermal power plant in Blythe, the world’s largest facility of its kind.

The early works for the first two power plants with a net capacity of 242 megawatts (MW) each have already begun in late 2010. The Solar Millennium Group is planning up to four solar thermal power plants at this location with a total power of 1,000 megawatts. Together, the four solar power plants produce enough electricity for more than 300,000 American households, saving around two million tons of carbon dioxide emissions per year.

Blythe: The world’s largest solar power plant

Of all the advanced projects the U.S. project development unit Solar Millennium LLC is currently pursuing at different locations within the U.S. (Blythe and Palen in California as well as Amargosa Valley in Nevada), the Blythe location in Riverside County has top priority. Up to four solar-thermal power plants with a capacity of 242 MW each are to be built there. Together the four plants will cover an area of 27,5 km² and thus form the largest planned solar-thermal power plant location in the world as well as being one of the most important infrastructure projects in the U.S.

After the approval by the California Energy Commission for the construction and operation of four solar-thermal power plants at the Blythe location was granted in September 2010, the Record of Decision by the U.S. Secretary of the Interior, Ken Salazar, followed suit in October 2010. This was the last approval to be issued, thus successfully concluding the entire approval process for the Blythe location. Based on this decision, the US Bureau of Land Management has granted the project company the right of way for public land at the Blythe location. The first preliminary construction works already started at the end of 2010.

The first power plant is to be connected to the grid in 2013. In sum, Blythe will save about one million tons of carbon dioxide annually and supply solar electricity for more than 320,000 households per year. Moreover, since all the power plants will be working with dry cooling, they will also use 90 percent less water than a conventional solar plant of this size that is operated with a water cooling system.

Financing for the U.S. projects is also well under way. Together with Deutsche Bank and Citigroup, Solar Millennium has designed a financing structure that comprises both subsidy programs by the U.S. government as well as the entry of equity investors. The financial close will take place after the expected loan guarantees by the U.S. government have been granted.

Blythe solar power plant project in the home stretch: Obama administration offers conditional commitment for a USD 2.1 billion loan guarantee.

CEO Dr. Christoph Wolff: With the conditional commitment, the most important prerequisite for the successful financial close for the first two power plants at the Blythe location is in place.

The Executive Board of Solar Millennium AG expects to complete the entire financing process in late summer 2011. Headed for an energy turnaround: new legislation in California improves market environment for additional solar power plants.

Blythe, the world’s largest solar power plant project, has passed the crucial milestone on its way to the financial close for the first two of a total of four projected solar-thermal power plants. The US Secretary of Energy, Dr. Steven Chu, today offered the project company a conditional commitment for a USD 2.1 billion loan guarantee. The loan guarantees are the precondition for financing some 75% of construction costs of the first two 242 megawatt (MW) power plants with borrowed capital from the US Federal Financing Bank. Solar Trust of America LLC, the American company unit within the Solar Millennium Group, already began construction of the parabolic trough power plants Blythe 1 and 2 at the end of 2010.

Dr. Christoph Wolff, CEO of Solar Millennium AG: “As already announced at the press conference on the occasion of our annual financial statements, the conditional commitment offered by the Obama administration means that we have reached the home stretch in the granting of loans by the US Federal Financing Bank. In times of restrictive public budgets, I am particularly pleased that the US government is so clearly committed to the energy turnaround, in which our Blythe power plants will have a great share. For us this commitment is the most important prerequisite for entering into successful and detailed negotiations with institutional investors regarding their involvement in the two power plant projects.” The total investment sum for the first two solar-thermal power plants projected in Blythe amounts to roughly USD 2.8 billion.

The conditional commitment defines the covenants to be met by the applicant in order to receive the loan guarantees by the US Department of Energy (DOE). Among other conditions, this also includes the conclusion of a respective general contractor agreement and securing the equity share in total investment. The Executive Board of Solar Millennium assumes that the Company will manage to meet all of these conditions by late summer this year. According to the eligibility guidelines, the conditional commitment is offered to companies which, after intensive scrutiny by the DOE, are believed to be able to meet the contractual provisions.

Uwe T. Schmidt, CEO of Solar Trust of America: “We are grateful to the US Department of Energy, which has brought our power plants one major step closer to realization by making this decision in the scope of the loan guarantee program. The Blythe project is an important move towards securing independent and sustainable energy supply in the US and also creating thousands of new jobs. We are convinced that Blythe will both trigger and drive the growth of solar-thermal electricity supply.” Solar Trust of America expects to create some 1,000 direct jobs during the construction phase and several thousand indirect jobs through supplier relations. The two power plants are to be connected to the grid in 2013 and 2014, respectively.

The final building permit for all of the four power plants projected at the Blythe location had already been granted in autumn 2010. Each of the power plants will have a nominal capacity of 250 MW (242 MW net output). Given a total of about 1,000 MW projected power plant capacity, the plants in Blythe will come close to the dimension of nuclear power plants. Together with other renewable energy sources, solar-thermal power plants will be able to replace fossil-fuel and nuclear power plants in the long run. The four power plants combined are to supply enough electricity for more than 300,000 American households and thus save some two million tons of carbon dioxide emissions per year.

The electricity generated in Blythe 1 and 2 will be purchased by the US utility Southern California Edison (SCE). As such, SCE meets the requirements by the state of California to increase the share of renewable energy sources in total power production. Only last week, California passed an ambitious law that forces the Californian utilities to cover 33% of power generation with renewable energies by 2020 (Renewable Portfolio Standards – RPS). By 2010, the utilities had to meet a target figure of 20%.

By passing the 33%-Renewable Portfolio Standards, California takes the lead in promoting renewable energies among all the US states. Due to its well-filled project pipeline with other projected power plants in California at the Blythe and Palen locations, the Solar Millennium Group will be in the position to contribute considerably to reaching these ambitious energy turnaround goals.

Solar Millennium AG, Erlangen, (ISIN DE0007218406) is an international company in the renewable energy sector, with its main focus on solar-thermal power plants. Together with its subsidiaries and associates, the Company specializes in parabolic trough power plants and has managed to take a globally leading position in this field. Solar Millennium strives to further extend its expertise in the area of solar-thermal power plants with the aim of achieving and securing sustainable technology leadership. As such, the Company covers all important business sectors along the value chain for solar-thermal power plants: from project development and financing to the technology and the turnkey construction and operation of power plants.

In Spain, Solar Millennium developed Europe’s first parabolic trough power plants and realized these together with partners. Additional projects are planned around the world with an overall capacity of more than 2,000 megawatts: here the current regional focus is on Spain, the US, the Middle East and North Africa. 

Solar Trust of America (STA) is a joint venture of the Solar Millennium Group (70%) and the Ferrostaal Inc. (30%) and covers important business fields in the value chain for solar thermal power plants in the region of North America. This includes the business segments of project development and financing, engineering, turn-key construction and operation of power plants. Solar Millennium LLC is a wholly-owned subsidiary of Solar Trust of America.

Solar-thermal power plants generate electricity by converting solar radiation into heat energy. In a parabolic trough power plant, trough-shaped mirrors concentrate the incidental radiation onto a pipe in the focal line of the collector. Its absorption heats a fluid heat medium in the pipe, generating steam in the power block through a heat exchanger. As in conventional power plants, the steam powers a turbine to generate electricity. By integrating thermal storage, electricity can be supplied on demand, even after sunset.