Abengoa Closes $1.45B DOE Loan Guarantee for Solana CSP Plant

Abengoa's Solana 250 MW (net) project in Arizona finalized its Loan Guarantee from the DOE, which will cover up to $1.45B of the total $2.0B in project cost.

A small percentage of the balance will come from Abengoa.  The piece that remains (around 25% of the total cost) will need to come from direct equity investors (such as NRG) and tax equity investors (such as Morgan Stanley and Union Bank).

The basic math on this project seems puzzling:  $2B for 250 MW works out to $8/W-ac.  First Solar installed the 21 MW-ac Blythe plant for $60.3M -- that is $2.87/W-ac.

Why would APS ever agree to such a soaking?  And why would the PUC in Arizona approve it?  The answer lies in LCOE (levelized cost of electricity).

Because this plant will have six hours of storage, its electricity output will be far higher than a comparable 250 MW solar plant without storage. Solana's capacity factor will be ~41%, whereas First Solar plants run closer to 21%. Capacity factor is a ratio of the actual output of a power plant over a period of time and its output (if it had operated at full nameplate capacity the entire time).

The net result is that a much higher cost per installed watt plant can still be very competitive on a cost-per-kWh basis. In this case, our LCOE model has Solana at $0.15/kWh, and it has a generic First Solar plant at $3.20/W-dc, and $0.14/kWh on LCOE.

A full analysis of project economics for CSP and PV plants can be found in the upcoming GTM Research CSP report, which will be released in early January.

It would seem that thermal storage might be able to help CSP compete with PV in several ways:

1) Storage might be able to lower the LCOE for CSP (especially in towers)

2) Storage will help differentiate CSP, as it makes the resource more dispatchable

3) Storage increases the value of the output, as it can better serve markets with high load (and pricing) in the late afternoon and early evening. 

To see the location of Solana on a U.S. map, as well as its scale relative to other CSP projects, check the GTM Research U.S. CSP Project Tracker & Map.

For a list of the partners and suppliers to Abengoa's Solana, including Rioglass for mirrors and Schott for receiver tubes, see the GTM Research CSP Ecosystem.

For a video from Abengoa with details on Solana, click here.

Full project specs from the upcoming GTM Research CSP report follow below: