Solar Millennium AG: US Power plant projects proceed to next stage in approval procedure

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Solar Millennium intends to start construction of at least one planned project by the end of this year.

  • Environmental impact studies for four Solar Millennium power plant sites published by US authorities
  • Citigroup and Deutsche Bank are working on the structuring and financing of the 242 megawatt power plants with priority
  • Building permit for at least one power plant expected to be granted by autumn 2010

Berkeley/Erlangen []

The four potential power plant locations of Solar Millennium AG’s (ISIN DE0007218406) and Ferrostaal AG´s US subsidiary, which are on the so-called fast track list, have reached the next stage of the approval procedure. All power plant projects are on schedule. Solar Millennium intends to start construction of at least one planned project by the end of this year. If the approval procedures run smoothly, a total of nine projects with a capacity of around 250 MW each could be realized at these four sites.

The US authorities have presented the first drafts of the environmental impact studies (EIS) for the three Californian sites Palen, Blythe and Ridgecrest as well as the site in Nevada’s Amargosa desert to the public. The first statement by the Californian energy commission (the so-called California Energy Commission Staff Assessment) was presented at the same time. The public hearing phase, which allows the public to state their opinion and comments on the projects for a period of 90 days for each project, is about to commence. In parallel to their environmental appraisal, the projects are also closely analyzed by independent expert teams (due diligence) with respect to a qualification for subsidies by the US government. These assessments are well under way and are expected to be completed as early as summer 2010.

Subsequently, the responsible energy commissions of California and Nevada will decide whether the building permit will be granted on the basis of all these analyses and opinions. In June 2009, Solar Millennium LLC already signed so-called power purchase agreements (PPA) with the utility Southern California Edison (SCE) for part of the power plants that are to be built at the Californian locations. The PPAs refer to two parabolic trough power plants with a capacity of 242 MW each, with the option for an additional 242 MW power plant, and provide for SCE to purchase the electricity generated by the planned solar power plants for a period of 20 years. These power plants are scheduled to be commissioned between 2013 and 2014.

Josef Eichhammer, managing Director of the US-American project development company Solar Millennium LLC, headquartered in Berkeley, California: “Our power plant projects are fully on schedule. The current approval activities deal with environmental assessment and possible compensation measures or planning adjustments. From today’s point of view, we should be able to receive the construction permit for at least one power plant by autumn this year.” Solar Millennium LLC is a fully owned subsidiary of Solar Trust of America, a US-American joint venture owned by the Solar Millennium Group and the Ferrostaal Group.

“Financing negotiations are likewise well under way” says Eichhammer. “We are planning to close the financing and officially commence building in the current fiscal year. We have filed applications for loan guarantees covering the planned power plants in California and Nevada with the US Department of Energy.”

In the US, solar power plant projects can furthermore benefit from the so-called Investment Tax Credits (ITC) until 2016. This entails tax relief of up to 30 percent of the investment total. The ITCs were created by the government to make investments in solar power plants more attractive. All projects starting realization in 2010 will qualify for subsidies from President Barack Obama’s stimulus package (American Recovery and Reinvestment Act 2009). This provides for companies to receive the ITCs as a direct cash grant for financing by the government rather than in the form of tax relief.

About Solar Millennium AG:
Solar Millennium AG, Erlangen, is an international company in the renewable energy sector, with its main focus on solar-thermal power plants. Together with its subsidiaries and associates, the Company specializes in parabolic trough power plants and has managed to take a globally leading position in this field. Solar Millennium strives to further extend its expertise in the area of solar-thermal power plants with the aim of achieving and securing sustainable technology leadership. As such, the Company covers all important business sectors along the value chain for solar-thermal power plants: from project development and financing to the technology and the turnkey construction and operation of power plants. In Spain, Solar Millennium developed Europe’s first parabolic trough power plants and realized these together with partners. Additional projects are planned around the world with an overall capacity of more than 2,000 megawatts: here the current regional focus is on Spain, the US, India, China, the Middle East and North Africa.

About Solar Trust of America:
Solar Trust of America, LLC is an integrated industrial solutions company of solar thermal power plants The Company is a joint venture of the Solar Millennium Group (70%) and the MAN Ferrostaal Group (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. The American project development company Solar Millennium LLC, headquartered in Berkeley (California), is a wholly-owned subsidiary of Solar Trust of America

About solar-thermal power plant technology:
Solar-thermal power plants generate electricity by converting solar radiation into heat energy. In a parabolic trough power plant, trough-shaped mirrors concentrate the incidental radiation onto a pipe in the focal line of the collector. Its absorption heats a fluid heat medium in the pipe, generating steam in the power block through a heat exchanger. As in conventional power plants, the steam powers a turbine to generate electricity. By integrating thermal storage, electricity can be supplied on demand, even after sunset.

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