For the third time in a week, the federal government on Monday threw its financial support behind a Bay Area company planning to build big solar power plants in California.
Solar Trust of America, based in Oakland, won a $2.1 billion conditional loan guarantee from the U.S. Department of Energy to build two solar thermal plants near the desert town of Blythe in Riverside County.
The two plants represent the first phase of a larger project that could one day be the world’s largest solar array, generating up to 1,000 megawatts of electricity and powering 300,000 homes.
The award is the department’s biggest yet for a solar project. Last week, the department announced a $1.2 billion conditional loan guarantee for SunPower Corp. of San Jose and finalized terms for a $1.6 billion loan guarantee for Oakland’s BrightSource Energy Inc.
Like Solar Trust, both BrightSource and SunPower are developing solar plants that will help California reach its goal of getting one-third of its electricity from renewable sources by the end of 2020. The loan guarantees will help the companies line up private financing for their projects.
They will also boost the development of America’s renewable power industry, a key goal of the Obama administration.
“We can either sit on the sidelines and watch the competition pass us by, or we can get in the race and play to win,” said U.S. Energy Secretary Steven Chu, announcing the Solar Trust agreement Monday.
Solar Trust is the American joint venture of two German companies, Solar Millennium AG and Ferrostaal Inc. Despite Solar Trust’s European pedigree, the company estimates that its Blythe Solar Power Project will generate 7,500 jobs across the United States, both in building the power plant and supplying its parts and materials.
“With this step by the DOE, the U.S. will have seriously entered the modern version of the space race of the 1960s, the solar race of today,” said Uwe Schmidt, Solar Trust’s chief executive officer.
Chevron Energy Solutions, a division of the San Ramon oil giant, helped develop the Blythe project but will not oversee construction.
The Blythe project’s first phase, estimated to cost $2.8 billion, will consist of two solar-thermal power plants producing up to 242 megawatts apiece. Preliminary construction began late last year.
The plants will use mirrors, shaped into troughs, to concentrate sunlight on tubes filled with a heat-conducting oil. The tubes will transfer that heat to water, creating steam, turning turbines and generating electricity.
A handful of similar plants have operated in Southern California for decades. But starting in 2006, a state law that ordered California’s utility companies to get 20 percent of their power from renewable sources triggered a race to build more.
The race continues. Gov. Jerry Brown last week signed legislation requiring California utilities to increase their use of renewable power to 33 percent by the end of 2020. Brown has even talked about shooting for 40 percent, although he has not yet discussed a timetable for it. He thanked Chu on Monday for helping the state reach its goal.
“We really appreciate the confidence and the investment,” Brown said, on a conference call with Chu and Schmidt. “We’ve got a lot of sun to harness, and we need the technology and the capital and the regulatory encouragement.”
While most environmental groups support the construction of large-scale solar plants, some have questioned the projects’ potential impact on the desert’s fragile ecosystem. Solar Trust and its construction subsidiary – Solar Millennium LLC – had to relocate four desert tortoises from the project site before beginning work last year.