Solar Plant_CA_1000mw_Blythe_Solar Trust of America

WASHINGTON—The Obaa administration will announce later Monday that it has approved a permit for what will be the world’s biggest solar power plant, according to an environmental group, part of a race to start work on new solar projects before federal incentives expire at year’s end.

The U.S. Interior Department is set to announce that it has approved a permit for a 1,000-megawatt solar project on federal land in the desert near Blythe, Calif., according to a spokeswoman for the Natural Resources Defense Council, which advocates for renewable energy projects.

An Interior Department spokeswoman wasn’t immediately available to comment. The Interior Department’s website shows that online access to Interior’s decision is “pending.”

The $6 billion project is being developed by Solar Trust of America, a joint venture between Germany’s Solar Millennium AG and privately held Ferrostaal AG.

The 1,000-megawatt project is one of nine large solar-thermal power plants the California Energy Commission has approved or plans to approve by the end of the year. Together they should generate enough power to serve A general view shows an existing solar plant near Seville, Spain. The solar thermal power plant uses mirrors to concentrate the sun’s rays onto towers where they produce steam to drive a turbine, producing electricity.

The federal approval would allow Solar Trust to start construction on the plant this year and take advantage of government incentives that would reduce the cost of the project. In order to receive cash grants in exchange for unused tax credits, a popular but expiring program, companies must break ground on projects or spend 5% of construction costs by year’s end.

Solar Trust plans to start building a service road in mid-November that will allow construction and equipment crews to access the site from Interstate 10, company spokesman Bill Keegan said Monday.

Driving demand for solar energy is a state mandate that requires utilities to get one-third of their power from renewable sources by 2020. The projected solar power boom, which also includes the construction of several large photovoltaic solar panel farms, is widely expected to create thousands of jobs in the economically hard-hit state.

Solar Trust is awaiting approval from the U.S. Energy Department for a federal loan guarantee for the first two of four total units. Deutsche Bank AG and Citigroup Inc. are working with Solar Trust to obtain project equity and tax equity investment, Mr. Keegan said.

The company estimates the solar project will create about 7,600 construction and manufacturing jobs.

State and federal regulators pledged last year to work together to fast-track approval for a raft of large solar power projects to enable developers to meet a Dec. 31 deadline required to take advantage of federal financial incentives.

Renewable-energy developers have been pressing federal lawmakers to enact legislation to extend the cash-grant program, which they say greatly expands their financing options, allowing them to build more projects.

Write to Cassandra Sweet at cassandra.sweet@dowjones.com and Siobhan Hughes at siobhan.hughes@dowjones.com

 

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