(Corrects location in first and second paragraphs.)
Jan. 24 (Bloomberg) -- PG&E Corp., the owner of California’s largest utility, received approval from regulators to buy power from a 150-megawatt solar-thermal project in the state’s Sonoran Desert, the first commercial-scale system in the state to include energy-storage capabilities.
Closely held developer SolarReserve LLC will sell the output from its Rice project in Riverside County to PG&E’s Pacific Gas & Electric utility for 25 years beginning June 1, 2016, according to a filing with the California Public Utilities Commission, which approved the contract at a meeting today in San Francisco. Terms weren’t disclosed.
The project will use thousands of mirrors to focus sunlight onto a central tower containing molten salt, which is funneled through a steam generator to produce electricity. The salt retains heat and can produce power at night, an advantage over photovoltaic panels that cost less and only work when the sun is shining, according to Commissioner Mike Florio.
“This is expensive, there’s no getting around it, but I think this technology is something that’s worth investing in,” Florio said at the meeting.
The molten salt system includes as much as 10 hours of energy-storage capability. It will cost about $600 million and construction may begin early next year, according to Kevin Smith, chief executive officer of Santa Monica, California-based SolarReserve.
Rice will be “the first large scale solar project in California with energy storage,” Smith said today by e-mail. The power-purchase agreement will help PG&E meet a state law requiring utilities to get 25 percent of their electricity from renewable sources by the end of 2016 and 33 percent by 2020.
SolarReserve’s system differs from solar-thermal plants planned by BrightSource Energy Inc. in California that also feature molten-salt storage and use water as a heat-transfer fluid.
The SolarReserve system “is hopefully a more efficient technology,” Florio said. “I don’t think we want to put all of our eggs in one basket in exploring these new and innovative technologies.”
SolarReserve expects to begin operating this year its similar 110-megawatt Crescent Dunes project near Tonopah, Nevada, that will provide power for NV Energy Inc. and be “the first commercial scale molten salt power tower in the world,” Smith said.
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