Starwood Solar I agreement terminated: Lockheed Martin pulls out

The long-term power purchase agreement (PPA) between APS and Starwood Energy Group has been terminated.  This ends plans for the Starwood Solar I plant, as the engineering, procurement and construction firm, Lockheed Martin, pulls out.

APS received notice from Starwood stating that it would no longer be able to go ahead with plans for the 290MW CSP plant in the Harquahala Valley, terminating the contract signed by both companies back in May 2009.

Don Robinson, President of APS said, "APS remains committed to solar energy and we intend to aggressively respond to this development as we stay on track with our plans to increase the amount of renewable energy we provide to customers."

The size of the project, which was to be the second largest announced by APS, was always going to carry significant risk for the electricity utility. It appears that Lockheed Martin, which had partnered with Starwood on the project, saw the possible issues with the final risk profile of the engineering, procurement and construction contract, among other factors, and decided to pull out. 

Work now begins on replacing the energy from the lost Starwood Solar I project. APS is expected to announce the results of two current solicitations for renewable energy: one for small-scale generation projects and one for distributed generation, by the end of 2009.

The other project planned by APS, Solana, has been more successful. Financing for the 280MW CSP plant is expected to be announced in the first half of 2010. The Solana plant is planned to be built 70 miles southwest of Phoenix, near Gila Bend, Ariz.