Solel Solar inks huge solar power deal in California

The company will build 553 MW solar power station in the Mojave Desert for PG&E.

Solel Solar Systems Ltd. will sell 553 megawatts of electricity to Californias PG & E Corp. (AMEX:PCG) (Pacific Gas and Electric Company) from a solar power plant that the company will build in the Mojave Desert at an investment of some $2 billion. PG & E's nine-square mile Mojave Solar Park is due to begin operating in 2011. PG&E said that the power, enough for 400,000 homes, will go to customers in northern and central California.

The Mojave Solar Park project is now the worlds largest single solar commitment.

Solel Solar CEO Avraham Branmiller said, Were excited to supply 553 MW of clean energy to California.

The companies refused to disclose the price at which electricity will be supplied, but it is clear that it will be competitive. It is estimated that Solel will sell power at about $0.10 per kilowatt-hour.

On this basis, sales over 25 years will amount to $3-3.5 billion. In that case, Solel will be left with $1-1.5 billion from sales of electricity over the period.

PG&E VP Energy Procurement, Fong Wan said, The solar thermal project announced today is another major milestone in realizing our goal to supply 20% of our customers energy needs with clean renewable energy.

The plant utilizes Solel Solars patented and commercially-proven solar thermal parabolic trough technology. Over the past 20 years, the technology has powered nine operating solar power plants in the Mojave Desert and is currently generating 354 MW of annual electricity. The project will rely on 1.2 million mirrors and 317 miles of vacuum tubing to capture the desert suns heat.

Based in Beit Shemesh, Solel Solar and Grupo Sacyr Vallehermoso SA (IBEX:SYV) are building an $800 million 150 MW project in Spain. It is also upgraded a 100 MW project in California for FPL Energy.

Business 2.0 says that the power station will be located near nine existing solar power plants built in the 1980s by Luz. When Luz went bankrupt in the early 1990s after solar energy tax breaks evaporated and natural gas prices fell, Solel Solar picked up the company's parabolic trough technology. Solel Solar will use a more advanced version of the solar trough for the Mojave Solar Park.

Luz has been revived as BrightSource Energy Inc., which is negotiating a 500-megawatt deal with PG&E.

Business 2.0 that PG&E's deal with Solel Solar is another sign that California has become a proving ground for Big Solar technologies. Including the Solel Solar agreement and assuming PG&E reaches a final deal with BrightSource Energy, California potentially could have nearly three gigawatts of utility-scale solar power online within the next five or six years.

Published by Globes [online], Israel business news - www.globes.co.il - on July 25, 2007

Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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