Something new is headed for the Southwest desert: solar power plants that can make electricity whether or not the sun is shining.

Abengoa Solar Inc. expects to start construction in mid-2011 on a plant in Arizona that will store sun-generated heat to provide six extra hours a day of electric-generating capacity. The heat creates steam that is used to turn power turbines.

Abengoa's $2 billion Solana plant is expected to be the first major stored-heat plant in the U.S. when it enters service in 2013. Some already exist in Spain and a few more are on the drawing board for Nevada and California.

On Dec. 21, Abengoa, a unit of Spanish utility company Abengoa SA, cleared a major hurdle when it announced it received a $1.45 billion U.S. loan guarantee for the 250-megawatt Arizona project, planned for a site 70 miles southwest of Phoenix near Gila Bend.

The Solana plant will be able to meet winter heating and lighting needs by putting electricity on the grid early in the morning—before the sun is shining—and help satisfy summer cooling demand by producing power after sundown. The plant, which can power up to 70,000 houses, has signed a 30-year agreement to sell electricity to utility company Arizona Public Service.

Such utility-scale solar plants use mirrors to focus the sun's rays on a liquid, contained in tubes, which can be heated to very hot temperatures. The liquid is used to boil water and create steam. By using a conventional steam-turbine generator, electricity is produced.

But the twist is that the Arizona facility will have two giant salt tanks, each 122 feet in diameter and 34 feet deep, that together can hold and store 40% of the heat created by the plant.

Such storage technologies are expected to become more commonplace in the U.S. at solar plants as officials try to limit the release of carbon dioxide from fossil-fuel power plants and make renewable power production more dependable.

Mark Mehos, a solar program manager for the National Renewable Energy Lab in Golden, Colo., said such molten salt storage systems add about 20% to the construction cost of solar plants but more than make up for it by boosting a plant's flexibility and productivity.

Electricity from solar plants is expensive, especially at a time when natural-gas prices have plunged, making gas-generated electricity cheap by comparison. Utilities, which are under state mandates to buy more clean power, say solar power may look more economical in the future if fossil fuel prices rise or if a tax is imposed on carbon emissions by power plants.

When it comes to renewable energy, solar competes most heavily against wind power. A study by the Lawrence Berkeley National Laboratory in Berkeley, Calif., in February 2010 found that utility-scale solar plants with storage capacity were three times as costly to build as wind farms without energy storage.

The study found that solar electricity was more valuable, though, because its output was more correlated to peak electricity demand. Still, experts say that unless costs come down, the number of solar projects that get built will be limited.

SolarReserve LLC, a power development company in Santa Monica, Calif., is working on two solar projects in Nevada and California that will have even more heat-storage capacity, relative to their size, than Abengoa's project. These plants will put out 110 megawatts and 150 megawatts in electricity, respectively, and will be able to store enough heat to run eight to 12 hours without additional sunlight.

SolarReserve has power sales agreements with NV Energy Inc. and PG&E Corp., and expects to have the two plants in service by 2014. Each will cost $650 million to $750 million.

Don Brandt, chairman and chief executive of Pinnacle West Capital Corp., parent of Arizona Public Service, said heat storage at the Abengoa project makes it "an extremely attractive project for us." By 2015, Arizona Public Service wants to get 10% of its electricity from renewable sources, and Abengoa's plant is expected to contribute a third of that. Arizona's statewide goal is 15% renewable energy by 2025.

Mr. Brandt said peak electricity demand for his utility typically hits about 4 p.m. in the summer but "we remain at elevated levels until around 10 o'clock at night" so getting renewable power later in the evening is valuable.

The U.S. National Renewable Energy Laboratory, part of the Department of Energy, says molten salt storage is "proven technology."

"When you put heat into one of these tanks, you get 95% or 96% of the heat back out again," said Mr. Mehos, at the federal energy lab. "It's a nice big Thermos."

Another plus of all three plants is they will produce power that can be tailored to a utility's specific needs, said Santiago Seage, president of Abengoa Solar. That's an asset to electrical grid operators that like to know they can rely on certain amounts of power flowing onto lines.

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