[philipmorg]

"The water can be used to heat salt that stores the energy until later, when the sun dips and households power up their appliances and air-conditioning at peak demand hours in the summer."

Air-condition after sunset? Maybe, but that's an edge case for sure.

So if this thing actually costs $737MM to build, then the energy it stores would have to be sold at around around $200/Megawatt to pay back the loan in 10 years. More, if you want to cover operating costs.

What's the catch? That's far above current market rates.

[CHsurfer]

"The plant will generate 110 megawatts at peak and store enough heat to run for eight to 10 hours when the sun is not shining."

Let's assume we get about the equivalent of 100 MW for 15 hours each day. That's 1500 MWh per day. Over 10 years at 365 days per year gives a total of 5'475'000 MW*hours.

The loan was 737 MUSD and let's assume that private investors will kick in the some to bring the total invest up to 1'000 MUSD. If you ignore operating costs this gives an average cost per MWh of 182.64 $/MWh.

The average cost of electricity in the US south west was around $40 MWh (http://www.eia.gov/electricity/monthly/update/wholesale_mark...).

This would indicate that the payback period for such a project must be longer than 10 years or that the expected cost of electricity will be higher in the future (or both).

[Anechoic]

>Air-condition after sunset? Maybe, but that's an edge case for sure.

Not at all. Here in the northeast we run the A/C on occasion during the evenings at times in July and August. I can imagine that humid areas in the south run A/C at night far more often.

[philipmorg]

Good data point. Is that the primary component of off-peak demand, I wonder?

[slyall]

As the article says they are betting that with all the other solar capacity going online the peak price (demand vs supply gap) will be late afternoon early even when demand is still high but there is little/no sun.

I assume you mean $200/megawatt-hour which is close to the numbers I get. I guess they are assuming the peak-premium plus the renewable requirements will offset the premium price. They probably have a longer payback period too.

[philipmorg]

I do mean megawatt-hours.

I don't know what the normal payback period is for generation infrastructure, maybe 15 years or so is not that unusual.