Phoenix Weighs Developers For Utility-Scale Solar Project
Platts Electric Power Daily : September 28 2009
By Ethan Howland
Tessera Solar is the top candidate to build a utility-scale solar facility on a city-owned landfill outside Phoenix, Arizona.
To boost renewable generation in Phoenix and create additional revenue, Phoenix in May issued a solicitation seeking a 150-MW to 200-MW solar facility using dry-cooled technology. In response, Houston-based Tessera proposed building a 175-MW solar concentrating plant. Johnson Controls proposed a plant using concentrating photovoltaic technology. BrightSource Energy also offered a proposal. Details of the proposals are confidential.
Last week, a Phoenix City Council subcommittee decided that the city should pursue parallel negotiations with Tessera and with Johnson Controls, which was ranked second on the RFP shortlist. If talks with Tessera falter, the city will have Johnson Controls as a backup. BrightSource ranked third. The city council is slated to vote on the recommendation at an October 7 meeting. If approved, city staff could then begin negotiations with the developers.
The winning bidder will need to find a utility to buy power from the facility.
In order to maximize revenue from the project, Phoenix may elect to take an ownership stake in the plant or take some of the facility’s power. The city may also want the plant’s renewable energy credits and potential carbon credits.
The landfill in Buckeye, Arizona, is next to power lines and a natural gas pipeline. The solar facility can occupy up to 1,200 acres, according to the RFP.
Tessera’s project would use SunCatcher technology, developed by the company’s sister business, Stirling Energy Systems, based in Phoenix. Stirling’s SunCatcher technology includes a 25-kW solar dish that tracks the sun and focuses solar energy onto a power conversion unit that generates electricity using a Stirling engine. In 2008, NTR, a renewable developer based in Dublin, Ireland, took a majority interest in Stirling by investing $100 million in the company. Stirling then split out its development operations into Tessera.
Tessera is active in several states. In California, Tessera plans to sell power from a 850-MW project near Barstow, California, to Southern California Edison. It also plans to build a 750-MW plant near El Centro, California, with the output under contract to San Diego Gas & Electric. California regulators are reviewing permit applications for the projects.
In Texas, Tessera has a 20-year contract to sell CPS Energy, the San Antonio municipal utility, the output from a 27-MW project in West Texas, with construction expected to begin in mid-2010. It is also developing a 200-MW project in south central Colorado.
The solar solicitation is supported by Phoenix Mayor Phil Gordon, who wants solar manufacturers to locate in the city. Phoenix has a goal of having 15% of its electricity come from renewable sources by 2025. It also wants to reduce the greenhouse gas emissions from city operations to 5% below 2005 levels by 2015. Phoenix has several small solar facilities ranging from 1.5 kV to 100 kV.
Arizona has some of the best solar resources in the nation. The Arizona Corporation Commission has approved two utility-scale projects. Last week, the commission approved a 280-MW to 330-MW project San Francisco-based NextLight Power plans to build near Yuma. NextLight has a contract in place to sell power from the plant to an undisclosed utility in Southern California.
The ACC in December approved Abengoa Solar’s proposed 280-MW concentrating solar power facility near Gila Bend, Arizona. The company plans to sell power from the Solana project to Arizona Public Service under a 30-year contract.
In addition, the ACC is beginning to review a proposal by Lockheed Martin and Starwood Energy Group, an investment fund based in Greenwich, Connecticut, to build a 290-MW concentrating solar power plant outside Phoenix and sell the electricity from the facility to APS under a 30-year long-term contract.
Albiasa Solar and Mohave Sun Power are developing utility-scale projects near Kingman, Arizona, but have not yet applied to the ACC for permission to build the plants.