$1.9bn US loan guarantees offered to Abengoa, NextEra CSP

The US Department of Energy (DOE) has extended conditional loan guarantees totalling $1.88bn to two 250MW concentrating solar power (CSP) projects planned in California by Abengoa Solar and NextEra Energy Resources.

Benjamin Romano

If finalised, the loan guarantees would assure the projects’ lenders of debt repayment. They unlock access to sources of capital on terms more favourable than renewable energy developers can typically obtain otherwise.

Abengoa is sponsoring the Mojave Solar Project, planned for private land in San Bernardino County, and is in line for a $1.2bn DOE guarantee.

It is the second major loan guarantee for Abengoa, which has reached closure on a $1.45bn deal for the 250MW Solana CSP project under construction in Maricopa County, Arizona.

NextEra is behind the Genesis Solar Project, to be built on federal land in Riverside County. It would receive up to $681.6m in guarantees.

Both projects would be based on parabolic trough CSP, and Abengoa’s would be the first in the US to use the company’s latest Solar Collector Assembly technology.

The DOE says this improves on the technology deployed at the Solar Energy Generating Systems (SEGS) – a series of CSP plants built in the Mojave Desert between 1984 and 1990.

The benefits noted by the DOE include lighter, stronger frames that are easier to install, receiver tubes that promise a 30% increase in thermal efficiency over the SEGS plants, and higher-performance mirrors.

“Together, these improvements can permit the collection of the same amount of solar energy from a smaller solar field,” the DOE says.

For the Genesis project, NextEra – which operates and part-owns all but two of the nine SEGS plants – plans to use “proven and scalable parabolic trough solar thermal technology that has been used commercially for more than two decades”, adds the DOE.

Between them, the two projects are expected to create more than 1,600 construction jobs and almost 120 operations posts.

While some CSP projects have been abandoned in the face of high costs and fast-falling PV prices, US Energy Secretary Steven Chu says the thermal technology has a role in making solar power cheaper.

“By investing in the commercial-scale deployment of solar technologies, we can create greater efficiencies that will lower the cost of solar power while creating jobs and increasing our global competitiveness in this key industry,” Chu says.

The DOE says the two projects would displace 40% of the output of a 500MW coal-fired power plant.

The DOE Loan Programs Office has significantly increased the flow of new loan guarantee commitments offered to renewable energy projects in 2011 ahead of a 30 September deadline to close a key segment of the programme.