Nevada CSP Project Wins $737 Million Conditional Loan from DoE

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Department of Energy (DoE) (Washington, D.C.) offered a $737 million conditional loan guarantee last week to SolarReserve LLC (Santa Monica, California) to build a 110-megawatt (MW) concentrating solar power (CSP) project in the Nevada desert.

Construction is scheduled to begin this summer on the Crescent Dunes Solar Energy Project in Tonopah, Nevada. The project is scheduled to begin generating electricity in late 2013. The project will create more than 600 jobs during its 30-month construction period. Electricity will be sold to NV Energy Incorporated (NYSE:NVE) (Reno, Nevada) under a long-term power purchase agreement that was approved last year by Nevada regulators. The project will be built on about 3,000 acres of land leased from the Bureau of Land Management (Washington, D.C.), a division of the U.S. Department of the Interior.

When built, this will be the first utility-scale CSP project in the U.S. that will use molten salt as a medium. When Crescent Dunes is completed, its owner says it will have the world's tallest power tower at 640 feet. It will also be capable of generating electricity 24 hours a day, whether or not the sun is shining.

SolarReserve's solar power tower technology generates power from sunlight by focusing the sun's thermal energy utilizing about 17,500 sun-tracking mirrors (known as heliostats) onto a central receiver. A salt compound, heated to its liquid state, is circulated through the receiver to collect and store the energy. The heated salt then flows to an insulated storage tank, where it is stored for use during times when direct sunlight is unavailable, allowing for 24-hour-a-day power availability.

When electricity is needed, the molten salt is sent to a heat exchanger to produce steam, which in turn drives a conventional steam turbine electrical generator. The cooler molten salt is stored, ready to be reheated by the sun and used again as part of a continuous closed loop. The system is completely self-sustaining and emissions free--no fossil fuels are required.

"The advantages of using molten salt as a medium, instead of water, is that once you heat water to that temperature, it flashes into steam and has to be used immediately," SolarReserve CEO Kevin Smith told Bloomberg TV news in an interview after the DoE's May 19 announcement. "With molten salt as the medium in the tubes, we can store the energy so we can use it after the sun goes down, or on cloudy days, like a conventional power project."

The DoE loan guarantee will be used to support repayment of loans that SolarReserve must obtain from commercial lenders. In order to receive the DoE loan guarantee, SolarReserve needs to close it loans and begin construction by September 30, the end of the federal fiscal year. Reportedly, there's been a rush to approve loans guarantees for multibillion-dollar solar projects.

"Today's announcement is about one thing: creating good-paying, clean-energy jobs right here in Nevada," Senate Majority Leader Harry Reid (D-Nevada) said in a statement accompanying the loan guarantee announcement. "Innovative companies like SolarReserve are helping ensure that Nevada can lead the nation in clean energy production, putting people back to work and pushing America toward energy independence. They deserve all the public and private support we can muster."

"Nevada continues to be a leader when it comes to the generation of renewable energy, and this project will not only create hundreds of jobs in the state, but will also bring additional clean energy to the region," DoE Secretary Steven Chu said in a statement.

The project, which was awarded under a DoE program for innovative technologies, will be the tallest such tower in the world and the first in the United States, according to the DoE.

"NV Energy is committed to developing the renewable energy potential of Nevada, and our relationship with SolarReserve is an important part of our ongoing commitment," said Michael Yackira, the president and CEO of NV Energy. "We congratulate SolarReserve on this important milestone as we look forward to the benefits their innovative technology will bring to our customers."

"We appreciate the tremendous support from the DoE's Loan Programs Office, which further validates the importance, effectiveness and deliverability of this leading U.S.-designed clean-energy technology," said Kevin Smith, CEO of SolarReserve. The Tonapah project will "bring Nevada's electricity customers the benefits of reliable solar power generated without greenhouse gas emissions. This solar technology is a genuine alternative to baseload coal, nuclear or natural gas-burning electricity generation facilities."

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