Agreement for 484 MW concentrating solar power in California

The California Public Utilities Commission (CPUC) has approved an agreement signed by Solar Millennium and Southern California Edison (SCE, one of the major US power utilities), which regulates the purchase of electricity produced by two solar thermal plants with linear parabolic mirrors to be built in Blythe, near Los Angeles for 20 years.

Solar Millennium AG (ISIN DE0007218406) has hit another milestone on the road to realizing its first parabolic trough power plants in the American southwest. The California Public Utilities Commission (CPUC) has approved a power purchase agreement between Solar Millennium’s American project development unit Solar Millennium LLC, Berkeley, and the US energy provider Southern California Edison (SCE) for two 242-megawatt (MW) solar power plants planned in California.

The agreement regulates SCE’s purchase of electricity produced by the facilities for 20 years from the start of operations. The start of construction for at least one power plant is scheduled for the end of 2010, with initial operations planned for 2013 and 2014, respectively.

The power purchase agreement (PPA) was approved by the CPUC at the end of last week. Both power plants are scheduled to be built at the planned Blythe project location. A total of up to four 242-megawatt power plants can be realized there, which together would supply electricity of ca. 2,200 gigawatt hours annually and would save roughly 900,000 tons of carbon dioxide every year.

At the same time, Blythe is one of four power plant locations of Solar Trust of America LLC, a US-American joint venture of Solar Millennium AG and Ferrostaal AG, which has been put on the so-called fast-track list. The responsible authorities give priority to the approval process of projects on the fast-track list.

The facilities planned in Blythe are important for reaching California’s goals regarding the use of renewable energy and, at the same time, reviving its economy. The state’s Renewables Portfolio Standard (RPS) program requires regional energy service providers to lift the share of renewable energy in their electricity supply to 20 percent by 2010 and up to 33 percent by 2020.

Josef Eichhammer, President of Solar Trust of America and CEO of Solar Millennium LLC: "We have reached another important milestone on the path towards realizing our first US power plant with the approval of the power purchase agreement by the CPUC. We also believe we will obtain the permit for construction of at least one power plant in Blythe in autumn and finalize the financing. The site is located near to Los Angeles. This area receives more than 2,700 kilowatt hours per square meter of direct normal irradiation every year, a figure more than 30 percent higher than in southern Spain."

Eichhammer added: "We are very satisfied with the progress thus far in developing our project locations. We have only asked the authorities to interrupt the approval process for our smallest project site in California, Ridgecrest, where a 242-megawatt facility is planned. We still want to carry out an additional study to examine all of the project’s ecological effects as well as additional compensation measures. We are also holding on to this location with its excellent solar radiation values, but we want to keep the impact on the local ecosystems as low as possible and maximize the benefit for the environment."

Solar Millennium AG, Erlangen, (ISIN DE0007218406) 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.

Solar Trust of America (STA) is a joint venture of the Solar Millennium Group (70%) and the Ferrostaal Group (30%) and covers important business fields in the 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. Solar Millennium LLC is a wholly-owned subsidiary of Solar Trust of America.

Southern California Edison (SCE) is a company of Edison International (NYSE: EIX). As one of the largest utilities in the US, SCE provides roughly 11 million Californians with electricity.

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.

Both plants are included in a project that foresees the construction of four 242 MW facilities, which Solar Millennium is planning to realize forming a joint venture with Ferrostaal AG.

The start of construction for the first of the two plants is scheduled for the end of this year, with initial operations planned for 2013. The second facility is planned to start operations after one year. Both plants are expected to produce a total of approximately 1,100 GWh per year.

The Blythe project is considered to be a significant milestone for California’s energy policy. Here, energy service providers are required to deliver a 20% share of renewable energy in their electricity supply by 2010, lifting this share to 33 by 2020.