Massive 250 MW Solar Farm's Construction Begins in California Next Year
December 1, 2010 11:20 AM
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A map of the planned 250 MW solar power plant, showing preserved land (green) and installation area (blue).
(Source: NRG Solar/SunPower)
The plant will be located roughly halfway between San Francisco and Los Angeles, just south of California's Bay Area.
Plant would take around 15-20 years to break even if electricity was sold at coal power rates
If there's one thing critics and proponents of solar power alike can agree upon, it's that solar power, like any commodity, will go down in price when it is produced at a greater volume. Recently announced plants, like a
280 mega-watt (MW) installation
in the Arizona desert go a long way towards achieving that sort of volume increase.
As does a new 250 MW installation in San Luis Obispo County, California which was
this week. Construction on the new plant will commence
next year and is expected to create 350 construction jobs.
San Luis Obispo is a coastal county that is relatively rural and lightly populated by Californian standards. It's roughly halfway between Los Angeles and San Francisco, two of the state's biggest cities.
The new plant will be a joint venture between NRG Solar, Inc. and SunPower Corp. -- two veteran solar power firms (SunPower, alone, will have installed over 1.5 GW of solar power by the year's end). NRG Solar is expected to pitch in $450M USD over the four year launch period. NRG will own the plant, it is basically contracting SunPower to design, build, and operate the plant.
The plant will begin producing electricity in late 2011. By 2012 to 2013 it is expected to reach full capacity, as construction completes. The plant is expected to provide enough power for 100,000 households.
The new plant is named the "California Valley Solar Ranch".
NRG Solar is seeking government loans from the U.S. Department of Energy to initially finance the construction. While U.S. President Barack Obama recently
handed out $1.85B USD
in grants to solar power projects, the new installation likely will not receive any of this money.
Securing a government loan is critical to the NRG and SunPower's plan. States Howard Wenger, president of the utility and power plants business group at SunPower, "The DOE is playing a critical leadership role in supporting renewable energy that provides economic and environmental benefits, as well as a secure, stable energy supply in the U.S."
The project has been in the works for the last two years. It is expected to be operational for at least 25 years.
Challenges to the plant's success remain. Currently environmental activists in California are
vigorously resisting large solar and wind installations
, which they fear will damage fragile ecosystems. They have filed lawsuits to try to block similar projects.
The California Valley Solar Ranch project may placate these critics, thanks to the 2,399 acres it sets aside as a wildlife habitat. The plant and associated facilities are expected to occupy 1,966 acres of land.
Another challenge is the underlying economics. While the California Public Utilities Commission has agreed to buy 25 years worth of power from the installation, likely at an inflated price, it remains to be seen exactly how much money the plant will make. Coal power costs around $0.06-$0.08 USD per kilowatt-hour, so if the solar plant's power was sold at an equivalent rate, it would take around 15 to 20 years for the plant to break even. Thanks to large markups to alternative energy power, though, it should break even much sooner, boosting NRG Solar and SunPower. Nonetheless, some consumers may be unhappy with paying this kind of markup so that their power can be "greener".
Still, it's common knowledge that you have to invest up front to gain access to new technology. And with large scale installations like this new one in California and the currently developing one in Arizona, the cost per kilowatt hour of solar power in the U.S. should fall over the next few years.
This article is over a month old, voting and posting comments is disabled
12/1/2010 12:14:45 PM
Even then the numbers don't add up.
1) This plant is going to get market rate of $0.05 to $0.07 per kWh wholesale. It has a signed PPA power purchasing agreement. It has locked in a sweetheart deal of $0.20 per kWh.
2) The interest amortized over 20+ years alone would sink this project without subsidized pricing.
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