Washington (Platts)--14Jun2011/602 pm EDT/2202 GMT

The Obama administration conditionally offered two taxpayer-backed loan guarantees worth a combined $1.9 billion to two large concentrating solar power projects in California, the Department of Energy said Tuesday.

DOE said it would provide $1.2 billion in federal financial backing to Abengoa Solar for its 250-MW Mojave Solar Project in San Bernardino County, about 100 miles northeast of Los Angeles. DOE also offered a $682 million loan guarantee to NextEra Energy Resources for its proposed 250-MW Genesis Solar Project in Riverside County, California.

DOE and the companies must work out the terms of both loan guarantees before they are finalized. But Energy Secretary Steven Chu sounded an optimistic note, saying the federal government's financial assistance would help the solar-energy industry "create greater efficiencies that will lower the cost of solar power while creating jobs and increasing our global competitiveness."

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Abengoa's project will be the first US-based, utility-scale deployment of the company's latest "Solar Collector Assembly," which DOE said is a significant improvement over the prior generation of parabolic trough technology installed in the US in the 1980s and 1990s. The assembly was originally developed in connection with financial assistance from DOE's Office of Energy Efficiency and Renewable Energy.

NextEra's project will feature proven and scalable parabolic trough solar thermal technology that has been used commercially for more than two decades. Power from the project will be sold to Pacific Gas & Electric.

Chu said that when the two projects are completed, they will double the nation's CSP capacity, and displace some 40% of the power output from a typical 500-MW coal-fired power plant. California has the most aggressive renewable-energy standard in the US.

DOE offered both loan guarantees under a provision of the 2009 economic-stimulus bill, which many Republican lawmakers opposed. But Senator Dianne Feinstein, a California Democrat, Tuesday said DOE's financial assistance will allow NextEra to build its project in a part of her state that was "devastated by the economic turndown" of the last several years.

The administration is scheduled to highlight its investments in solar energy again on Friday, when several top officials will participate in a groundbreaking ceremony in California for a 1,000-MW project that received a $2.1 billion DOE loan guarantee.

--Brian Hansen, brian_hansen@platts.com