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By Ucilia Wang

Solar Millennium (OTC:SMLNF) and NV Energy (NYSE:NVE) plan to develop a 250-megawatt solar thermal power plant in Nevada.

Solar Millennium, which has been developing solar-thermal power plants in Spain, said Tuesday it has signed a memorandum of understanding with NV Energy, a utility that serves roughly 2.4 million people in Nevada. The plan is to build the solar-thermal power plant in Nye County by 2014.

The project would be done by the U.S. subsidiaries of Solar Millennium, a technology provider in Germany, and MAN Ferrostaal, an engineering and construction firm also in Germany. The companies, along with NV Energy, hope to start construction in 2010, pending approval from the Nevada’s Public Utilities Commission.

They are still figuring out how to pay for the project. NV Energy could invest money in the project or sign a power-purchase agreement instead, said Britta Carlson, an NV Energy spokeswoman.

A number of European companies with experiences in building solar-thermal power plants are developing projects in the United States, particularly in the Southwest. Solar-thermal power plants use the sun’s heat to generate steam for running an electricity generator, and proponents say solar-thermal technologies can deliver cheaper solar power than power plants built with photovoltaic panels.

Spain has been a popular place for building solar thermal power plants. Solar Millennium has built them there, along with its Spanish competitors Torresol Energy, Abengoa Solar and Acciona Energia.

Acciona completed a 64-megawatt solar-thermal plant in Nevada two years ago called Nevada Solar One, which the company touted it as the largest solar-thermal plant to be built in 17 years and the third largest in the world. Acciona sold the electricity from the $266 million plant to Nevada Power and Sierra Pacific Power, both of which began operating as NV Energy in 2008.

Solar Millennium’s project in Nevada calls for studying the feasibility of adding an energy storage component to the power plant. Energy storage makes an attractive addition to a solar energy power plant, which can only produce electricity during daylight. Using batteries is too expensive, and renewable power companies are exploring other ways to generate electricity after the sun goes down or to store the excess electricity produced at night (such as wind power) for use during the day.

A solar-thermal storage tank would contain superheated materials, such as molten salts, that can be released to generate steam whenever electricity is needed.

Source: Solar Millennium, NV Energy Plan 250MW Solar-Thermal Plant in Nevada