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The 150-megawatt Rice Solar Energy Project to be built by SolarReserve, a Santa Monica, California, start-up, also got a green light.
California regulators have approved nine solar power plants in the last four months. At peak operation they could power more than 4 million homes.
The licensing of Solar Millennium's Palen Solar Power Project, to be built on federal land in the Mojave Desert, follows the energy commission's approval of the German developer's 1,000-megawatt Blythe solar trough power plant in September.
A Solar Millennium representative told commissioners that despite the approval of the project, the company would not be able to meet the deadline to qualify for a federal cash grant that would cover 30 percent of the power plant's cost, unless that program is extended beyond its expiration on December 31.
The United States Senate voted to renew the cash grant program until the end of 2011.
Solar Millennium is continuing to pursue a federal loan guarantee to build the Palen project, the company representative said.
Some environmentalists urged commissioners not to approve the project due to what they said was an unacceptable impact on the Mojave fringe-toed lizard.
SolarReserve licenses molten salt technology from United Technologies Corp that will allow the Rice power plant to store up to seven hours' of heat to be used to generate electricity when the sun is not shining.
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