Abengoa gets $1.45 billion loan guarantee for Arizona solar plant

Will be largest solar plant to date in AZ.
Abengoa Solar will receive a $1.45 billion conditional loan guarantee to build the Solana Generating Station, a move that will accelerate the building of the largest power plant approved so far in Arizona.

President Barack Obama made the announcement Saturday morning in a move that secures funding for the project, which that had struggled on the open market to find financing because of the lagging economy.

With the loan guarantee, Abengoa, the U.S. subsidiary of Spanish solar giant Abengoa S.A., could have the project under development by the end of the year.

“This conditional guarantee could allow us to start construction of Solana this year,” said Abengoa CEO Santiago Seage in a statement. “I want to recognize the leadership and effort of the DOE in making Solana possible through this guarantee.”

The funds are part of billions tied with the American Recovery and Reinvestment Act, designed to spur the development of renewable and carbon-free power technologies. The amount is among the largest loan guarantees issued to any energy project since the program began.

Solana was announced in 2008 as the largest concentrated solar power (CSP) project in the world. The 280-megawatt plant is to be built near Gila Bend and capable of powering 70,000 homes at peak operational capacity.

Power produced at the plant will be sold to Arizona Public Service Co. in a 30-year contract.

“APS has demonstrated a strong commitment to solar energy and has shown leadership in moving solar energy toward the mainstream,” said Kate Maracas, vice president of Abengoa’s Arizona operations.

The project has been clearing regulatory hurdles, and the Arizona Corporation Commission has approved it. What remains are the permitting processes at the state and county level, officials said.

The project is expected to create about 1,600 temporary construction jobs that will last during the roughly two years the plant is under construction, with the operation creating about 85 permanent jobs.

The project will create about 98 percent of its jobs in the U.S., from mirror manufacturing to steel that will hold the mirrored troughs that will reflect the sun’s rays.

Immediate benefits to the Valley’s economy, aside from the jobs, will be a mirror construction plant in Surprise that will employ 180 people and will be a foundation for future CSP projects.

The manufacturer was not named, but Rioglass Inc. a division of the Spain-based Rioglass Solar S.A., has received $10.6 million in federal tax credits to locate a plant in Surprise. The company has made no formal announcements about any move to the Valley.

The mirror plant would be in addition to two manufacturing plants Abengoa would have at the construction site to handle the assembly of the plant, which is expected to cover about 3 square miles or more of former farmland.

Source: Phoenix Business Journal