Jun 15 - McClatchy-Tribune Regional News - Shelley Shelton The Arizona Daily Star, Tucson

Near Red Rock, just east of Interstate 10 on a barren patch of desert, sits what very well could be the future of renewable energy in our state.

Six long rows of shiny curved mirrors tilt toward the sun, moving with it throughout the day to keep its heat concentrated on long tubes that run the length of each row.

The tubes are connected to a brown building, abuzz with electricity, housing a steam turbine that takes heated fluid from the mirror field that spins a steam turbine to make electricity.

The future of renewable technology never looked so desolate, yet so exciting to the people involved.

"We decided to help jump-start the industry again," said Steven Gotfried, renewable-energy spokesman for Arizona Public Service Co., as he gave a tour of the Red Rock location, known as the Saguaro Solar Power Plant.

The Saguaro plant is a 1-megawatt solar-thermal test facility that produces enough electricity to power about 300 homes.

This could be the start of something big But that's just the seed of an expected surge in big utility-scale solar in Arizona.

APS, Tucson Electric Power Co., the Salt River Project and several smaller electric utilities around the state have formed a consortium that seeks to have a 250-megawatt concentrating-solar-power plant built either in Arizona or Nevada.

And APS is looking to build a 280-megawatt concentrating-solar-power facility, called Solana, 70 miles southwest of Phoenix near Gila Bend. Developed by Spain-based Abengoa Solar, that project would take up about 3 square miles, producing enough power to light up about 70,000 homes. It would be one of the world's largest solar facilities.

Rooftop installations of photovoltaic, or PV, panels that convert sunlight directly into electricity have garnered a lot of attention through rebate programs that defray the cost of such grid-connected systems.

But with an Arizona Corporation Commission mandate that the state's regulated utilities to generate at least 15 percent of their power from renewable sources by 2025, large utility-scale renewable-energy installations are needed to help meet that goal.

"We cannot reach those levels without utility-scale systems," said Joe Salkowski, a spokesman for TEP, which already has one of the world's biggest utility scale PV plants near Springerville.

Solar-thermal technology, like that used at the Saguaro solar plant, has existed for decades. But little had been done with the technology in Arizona in almost 20 years when APS -- the state's largest electric utility -- decided to revive it, APS' Gotfried said.

Saguaro was the first step, partly just to see what could be done and what manufacturers offer such equipment, he said.

Built at a cost of $6 million and completed in 2005, its six tidy rows of parabolic mirrors sit on 14 acres, soaking up the heat from the desert sun's rays.

"We have a need, going forward, to meet certain energy demands," Gotfried said. "Our biggest challenge over the next 20, 30, 40 years is to meet the demand on the hottest days of the year, especially."

The goal for APS is to strike a balance between fossil-fueled electric generation, which easily covers the base electric use, and renewable-energy generation, which would kick in to cover the peak times.

In other words, the sun at hottest part of the day could actually help cool your home.

Solar thermal differs from photovoltaic technology in that it allows the heat to be stored, thereby making it possible to use the sun even when it's setting or on rainy days. Though battery systems are available to store energy from photovoltaic systems, grid-connected rooftop systems generally work only when the sun is shining on them.

Getting on board with solar thermal plants could be a very good thing for consumers' wallets.

The power produced in a 250-megawatt solar-thermal facility might cost between 14 and 20 cents per kilowatt-hour, TEP's Salkowski said, while the power produced by a rooftop photovoltaic array typically costs between 30 and 50 cents per kilowatt-hour.

But the massive solar-thermal plant proposed by the utility consortium still faces some significant hurdles.

The plant would be owned by a third party while consortium members each sign long-term purchase agreements for the electricity it generates.

The group issued its request for proposals in December, and according to a timeline set forth in January, should have made a final selection last week.

But it's not clear whether everything is on schedule, Gotfried said.

The half-dozen utilities that form the consortium must look at the bids, and contracts must be negotiated before any decisions can be made, he said.

And that includes perhaps the most critical decision of all -- whether the plant will be in Arizona, where it would create jobs within the state, or in Nevada.

Gotfried remained cryptic about the location, saying, "It could be any other place, but we have a very strong feeling that it's going to be here in Arizona."

Normal negotiations aside, a larger obstacle looms over Solana, the yet-to-be-named joint project and others scattered around other states: Many solar-plant developers rely heavily on federal tax credits to get their projects off the ground, and Congress is having a hard time passing an extension to the credits, which expire at the end of this year.

Gotta have it Although developers earn money down the road from the electricity their installations generate, the tax credits -- currently 30 percent of the cost of the project -- give the developers the funds they need to get the projects off the ground.

And they are crucial.

Kate Maracas, vice president for Arizona operations of Abengoa Solar, which is developing the Solana plant for APS, said all bets are likely to be off if Congress doesn't pass a lengthy tax credit extension within the next year.

"As much as Abengoa Solar would love to proceed with or without the solar legislation, the numbers just won't work," she said. "We can withstand delays up until about the middle of next year, but if at that time the tax credit isn't extended then the project completely fails."

And because of the length of time required to complete the project, Abengoa really needs Congress to extend the tax credits for at least six years, she said.

Rep. Gabrielle Giffords, D-Ariz., said she thinks that will happen.

"I'm optimistic that we will be able to successfully pass the solar-investment tax credits," she said, adding that the House of Representatives has passed it several times already.

The cost to fund it would be $17 billion over five years, which Giffords said sounds like a lot of money until you consider that big oil companies made almost that much in profits in the first quarter of this year.

As it stands, most of TEP's renewable energy is produced from utility-scale systems, and the company is looking to establish more, if funding issues don't prevent solar developers from moving forward, Sallow-ski said.

TEP already has a 4.6-megawatt photovoltaic array in Springerville as well as a 5-megawatt-capacity biogas project that runs methane from the Los Reales landfill to the Sundt Generating Station on the South Side.

A member of the Corporation Commission said such utility-level projects are more effective and more equitable to ratepayers than so-called distributed systems like rooftop PV.

"We've got to do what's right by ratepayers, and most ratepayers benefit by these large-scale projects. They don't all benefit by their neighbor having distributed generation," Corporation Commissioner Gary Pierce said.