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Enron Makes Electrifying Proposal : Energy: The respected developer announces a huge solar plant and a breakthrough price.

November 05, 1994|MICHAEL PARRISH | TIMES STAFF WRITER

In a move that took experts by surprise, Houston-based Enron Corp., a giant energy developer, has proposed building the world's largest photovoltaic power plant at the Energy Department's Nevada Test Site, near Las Vegas.

Equally unexpected, in an industry now producing electricity at a pricey 25 cents a kilowatt-hour, Enron says it will make power at 5.5 cents--which would make power converted directly from sunlight competitive with fossil fuel plants.

"If they are successful, they will have defined the photovoltaic market overnight," said Tony Catalano, director of photovoltaics at the Energy Department's National Renewable Energy Laboratory in Golden, Colo., the principal federal research center for such solar technology.

Photovoltaic cells, mostly formed from purified silicon sand, are one of two forms of solar-generated electricity. Such solar cells have become commonplace above highway call boxes, on hand-held calculators and in larger installations in remote locations. Solar thermal power, by contrast, is the technology that uses the sun to heat water, oil or liquid salt, which is then used in water heaters or to run electricity-generating turbines.

Photovoltaic cells have become steadily more efficient and cost-effective in recent years. But the price has remained well above the cost of electricity generated by conventional fuels or most other renewable sources of energy. So far, only about 400 megawatts of photovoltaic power-generating panels have been built at various sites around the world.

Enron proposes building a 100-megawatt, $150-million plant at a single site on the former nuclear testing grounds, which the Energy Department would like to turn into a solar power enterprise zone. The firm wants the department to contract to buy the power at the 5.5-cent price, with a standard 3% price escalator clause to include inflation, but with no federal subsidies.

Analysts say there would be wide skepticism toward such a low-cost proposal if it came from a small start-up firm. But Enron is a highly experienced power plant builder--as well as the nation's biggest natural gas provider--and it has been studying the photovoltaic industry for the past year.

"We're not going to lay the gauntlet down unless we can do it," Robert Kelly, Enron executive vice president, told the Houston Business Journal, which broke the story last week.

An Enron spokeswoman confirmed the plan Friday but declined to describe the company's technology in detail.

"There really hasn't been too much officially announced about it," agreed Jim Birk, manager of renewables and hydro at the Palo Alto-based Electric Power Research Institute, which oversees research and development for U.S. electric utilities. "But the bottom line is that you have a very credible organization with a strong history in the energy business putting forth this proposal."

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