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Houston Commissions State's Largest Solar Project

September 24, 2009

by: Laurie Johnson

The City of Houston plans to partner with NRG Texas to build the state's largest
solar farm. The 40-million dollar project will go online next year and provide
energy exclusively for city buildings. Laurie Johnson has more.

City of Houston General Services Director Issa Dadoush says NRG Texas won the
bid to build the state's largest solar project.

"What makes this project very, very unique, if you look at the state of Texas
and look at all the solar projects that we have and you add them all up together
cumulatively, they come out to about six megawatts. This project by itself is 10
megawatts, so this will almost double the capacity of what we have right now in
the state of Texas."

NRG Texas will pay the $40 million cost of building and operating the solar
farm.

The 10 megawatt facility in northwest Houston will house dozens of solar panels
that soak up the sun's rays.

Kevin Howell, the company's president, says the city will then enter into a
25-year agreement to purchase 100 percent of the energy generated from those
panels.

"We're going to sell that power back to the city, but we're going to do it as a
blended product so that they get their power regardless if the sun is shining or
not. So the way to think about that is when the sun is shining they'll be taking
all of the power off the solar array. If for some reason it's a cloudy or rainy
day, then we're going to supplement that commitment to them on our traditional
generation. That has the benefit of giving the city a steady supply of power and
also has blended the price down to make it more economic for them."

Dadoush says a third of the city's power already comes from wind energy. The
solar farm will represent an additional 1.5 percent of the city's energy
consumption.

"And I hope we get to a point where 50 percent of our load is coming from
renewable power. We need to think big. We need to think of the future. We can't
think of what's happening today, we have to set up plans that will be good for
the environment, at the same time that does make economic sense."

The deal with NRG has to pass muster in the city's fiscal affairs committee next
week. After that, councilmembers have to approve the agreement.

If all goes as planned, the solar farm will go online by July of next year.

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http://www.reuters.com/article/marketsNews/idUSN2445821820090924

Houston selects NRG for 10-MW solar project

HOUSTON, Sept 24 (Reuters) - The City of Houston has selected NRG Energy Inc
(NRG.N) to develop and operate a 10-megawatt solar project, the mayor's office
said on Thursday.
Under the agreement, the city will purchase the power under a 25-year,
fixed-price contract for 8.2 cents per kilowatt-hour the first year.

The price will change over time and is a blended rate that includes
higher-priced solar power and back-up power from NRG's nuclear, coal and natural
gas-fired generating portfolio for periods when solar power is unavailable.

The solar power price tag is 19.8 cents per kwh under the contract.

NRG will build the facility, expected to be operational next year, on 70 acres
(28 hectares) at its Wharton Generating Station in northwest Houston, according
to a release.

NRG, the second largest power producer in Texas, plans to use photovoltaic
modules manufactured by First Solar Inc (FSLR.O).

The agreement is subject to approval by the Houston City Council and the mayor.

Ten megawatts is roughly 6 percent of the city's annual consumption. One
megawatt serves about 500 homes in Texas.

Texas is already the leading wind-power state with installed capacity of 8,100
megawatts and a number of utilities and municipal utilities are exploring
options to add other renewable power resources, such as solar and biomass.

NRG is also working to develop a 92-MW solar thermal power plant in New Mexico
as part of its plan to have 500 MW of solar generation in its U.S. generating
fleet of 24,000 MW. (Reporting by Eileen O'Grady; Editing by Marguerita Choy)

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http://industry.bnet.com/energy/10002134/nrg-energy-teams-with-first-solar-for-h\
ouston-project/

NRG Energy Teams With First Solar For Houston Project

First Solar has snagged its latest utility-scale solar deal, alongside NRG
Energy. The two will build a 10 megawatt plant that will supply the city
government of Houston, Texas with 1.5 percent of its energy needs, according to
the Houston Chronicle.

The plant itself will come in at about $40 million, with NRG doing the
financing. What's a little more interesting, though, is the model they're
working under, which will combine gas and solar generation.

Houston will be paying NRG only 8.2 cents per kilowatt-hour, says the Chron. But
NRG is primarily a coal-firing utility, with some natural gas plants. So the 8.2
cent figure appears to be an average for all the power that NRG is supplying
under the deal. The solar component is valued at 19.8 cents per kilowatt hour.

NRG is also setting its reputation as a utility that likes to strike numerous
small, innovative deals. In another example, the solar thermal plants that NRG
is building with eSolar are much smaller than those being built by companies
like Abengoa and BrightSource Energy. But eSolar uses a cutting-edge computer
guidance technology to direct the sun's rays that it says will make its small,
modular plants cheaper than the competition.

That's definitely the case with First Solar. Traditional photovoltaics are still
coming down in cost from 30 cents per kilowatt hour (or more). That figure is
falling fairly quickly, but NRG is obviously expecting to make a profit on less
than 20 cents with First Solar's thin-film panels.

First Solar may not yet be at grid parity, as an analyst claimed late last year,
but it's at least approaching the cost of the best solar thermal technology.