Solar Millen-nium's Nevada Solar Project Earns US BLM Fast-Track Status

At the end of December, the US Bureau of Land Management (BLM) placed Solar Millen-nium Group's proposed solar power plant located in the Amargosa desert, Nevada, on its so-called Fast-Track list.

Previously, only the three Californian sites of Solar Millennium's planned solar power plants had reached this status. If the approval is successful, the Solar Millennium Group could realize up to nine solar thermal power plants at these locations with a potential maximum capacity of about 2,500 Megawatt (MW) in total. The approval process for projects on the Fast-Track list is given priority by the relevant authorities. Power plants that are granted a construction permit by the end of 2010 can benefit from subsidies provided by President Obama's stimulus package. The group has the ability to choose between different financing options for the realization of these projects and currently has a very solid financial base due to recent sales of stakes in several projects.

In total, the BLM's Fast-Track list includes 14 locations for solar projects with a maximum output (economically) of some 6,500 MW in total. The development of projects that have re-ceived this status has advanced so far that all approval phases, including the preparation of the public environmental impact study (EIS), can be initiated and completed within the pro-posed shortened time frame. The EIS describes the effects of an infrastructure measure on the environment and is made available to the public after its completion.

The US projects are developed by Solar Millennium LLC, a wholly-owned subsidiary of Solar Trust of America (STA) which will also realize the projects. STA is a joint venture of the Solar Millennium (70%) and the Ferrostaal (30%) and covers the entire 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.

Josef Eichhammer, Managing Director of Solar Millennium LLC, headquartered at Berkeley, California: "Environmental protection is a top priority for our company, which is why we tho-roughly investigate which particular technology suits to respective location. In order to pre-serve the local water resources, we have decided to use dry cooling at these project locations in Nevada and California." In this technology, the steam cycle is cooled with air mainly from large ventilators rather than water. "Thus we are able to reduce the water consumption by around 90 percent, which is an important criterion for the environmental impact analysis. With this decision we have paved the way for accelerating the approval procedure, meaning we could start construction work for at least one power plant by December 2010."

In the US, solar power plant projects can benefit from so-called investment tax credits (ITC) until 2016. These entail tax depreciation allowances amounting up to 30 per cent of the project cost. ITC's were designed by the government in order to increase the attractiveness of solar power plant investments. All projects commencing construction as early as 2010 can qualify for subsidies from President Barack Obama's stimulus package (American Recovery and Reinvestment Act 2009). In this program, companies receive parts of the ITC in state-supported financing rather than as tax depreciation allowances.

Thomas Mayer, CFO of Solar Millennium AG: "In order to finance the US power plant projects we will combine several options. Available are the dedicated programs of the US government, classical debt capital financing as well as equity financing by our group with other partners as well as a fund solution. These options can also be combined with subsidies and tax depreciation allowances." Against this backdrop, the Solar Millennium Group engaged Citigroup and Deutsche Bank in October 2009 to support the project financing. "Prefinancing during the project development phase is secured - the successful sale of stakes in the solar power plants Andasol 1, 2 and 3 to external investors and the sale of the Andasol Fund alone entail sustainable liquidity inflow of well over € 100 million across the different reporting periods. In addition, the group has been engaged in negotiations and discussions with other companies and potential partners for quite some time for this pipeline of large projects. Furthermore we have applied for loan guarantees from the US Department of Energy (DoE), which are granted as part of the stimulus package for solar power plants that receive a build-ing permit until end of 2011."

If the approval process is successful, STA could realize up to nine solar thermal power plants at these locations with a potential maximum capacity of about 2,500 Megawatt (MW) in total. In June 2009, Solar Millennium LLC already concluded so-called power purchase agreements (PPA) for some of the plants at the Californian locations with the US utility company Southern California Edison (SCE). The agreements cover two parabolic trough power plants with a capacity of 242 MW each and include an additional option for a third power plant with 242 MW. The PPAs provide for SCE to purchase the electricity generated in the solar power plants for a period of 20 years. The power plants are scheduled to start operation between 2013 and 2014.

In Nevada, the Solar Millennium Group is cooperating with NV Energy Inc., a major local energy provider, to develop solar thermal power plants in the Amargosa desert. Here, the aim is to build two parabolic trough power plants with a capacity of around 250 MW each and use thermal storage facilities like the ones in the Andasol 1 and 2 plants in the south of Spain, which were developed by Solar Millennium.

Each power plant has an expected financing volume of more than one billion US dollar. Several hundred people will be employed during the construction of each solar power plant. In the long term, nearly 100 direct jobs in the fields of operation, maintenance and administration will be created. Numerous additional new jobs will follow at suppliers and service companies. In the years to come, the Solar Millennium Group expects these projects to generate sales and earnings contributions in all business segments along the value chain for solar thermal power plants.

Source: http://www.solarmillennium.de/

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