Builders Seek New Delay For Giant Solar Project
The owner of a proposed solar power plant in the California desert has asked state regulators for another year to redesign the project.
Spanish energy firm Abengoa, which took full ownership of the proposed Palen Solar Electric Generating System after its partner BrightSource Energy withdrew from the project in late 2014, told the California Energy Commission August 4 that it needed the extra time to redesign the proposed concentrating solar power plant. Abengoa says it plans to add an energy storage component to the plant so that it can continue generating electricity after the sun sets.
The Palen project has attracted significant opposition from environmentalists concerned about the project's effects on wildlife, cultural resources, and views across the expansive Chuckwalla Valley area adjacent to Joshua Tree National Park.
That controversy, especially over the issue of concentrated solar energy injuring birds flying above the plant, culminated in the California Energy Commission closing the books on a previous redesign of the plant in late 2014. That's when former owner BrightSource Energy pulled out, leaving Abengoa with sole control of the plant. Abengoa has said it will be redesigning the plant yet again, though actual details on that redesign are sparse -- including how much power the new configuration would produce..
BrightSource isn't alone in having had its name scratched off Palen's blueprints. Palen has gone through several previous owners, operating singly or in joint ventures, since the California Energy Commission first considered the project's original 500-megawatt design back in 2009. The project's original owner, the German firm Solar Millennium, intended to build Palen in a joint venture with Chevron Energy Solutions using parabolic trough mirror technology. The Energy Commission approved Palen based on that design in 2011.
Solar Millennium filed for bankruptcy in April 2012, a victim of market forces favoring small-scale solar over large utility-scale projects. After some legal wrangling in which Chevron attempted to recoup its losses, BrightSource picked the project up with a $10 million bid in a bankruptcy court auction.
BrightSource asked the Energy Commission to amend the agency's approval of the project so that the company could redesign Palen using its proprietary solar power tower technology. That technology, which would have placed thousands of mirrored heliostats around two 750-foot towers on the project site east of Desert Center in Riverside County, was substantially similar to BrightSource's Ivanpah Solar Electric Generating System in San Bernardino County. That facility started attracting attention in 2013 when birds began being injured by the plant's concentrated solar energy, or "solar flux." Critics feared that the much larger Palen plant would pose a proportionally larger threat to birds.
As an attempt at compromise, BrightSource and Abengoa offered to scratch one of the 750-foot power towers, which would have been the tallest structures between Downtown LA and Phoenix, Arizona. The resulting smaller footprint would have disturbed less of the desert, and arguably reduced the solar flux risk to wildlife. That didn't move opponents much. After many months of analysis and public comment, including strong recommendations from California Energy Commission staff and the Commissioner presiding over the case that the full Commission not approve the design changes, BrightSource and Abengoa dropped the application for the initial power tower design for Palen in September, 2014. Most observers assumed that it was the looming end of the federal Solar Investment Tax Credit that drove the decision. In order to qualify for that tax credit, which has been an important incentive for utility-scale solar plants, BrightSource and Abengoa would have had to have Palen up and running by December 2016. The delays in the California Energy Commission process had made meeting that deadline unlikely.
Abengoa subsequently bought out BrightSource's share of the project. The company said it still intended to build Palen, taking into account the bird mortality risk. Abengoa also promised to address the fact that BrightSource's design didn't include a thermal storage component, in which some of the sun's energy would be used to melt salt, the stored heat from which would then be used to turn the plant's turbines after dark. Power storage is a bit of a Holy Grail for renewable energy planners, and the Energy Commission had indicated that it would have looked more kindly on BrightSource's design had storage been baked in.
Abengoa's petition to extend the construction deadline is pretty straightforward, and could easily be taken at face value. But there's still quite a bit of reading between the lines to be done.
Some analysts suggest that Abengoa is not a particularly robust company. The analytical firm Macroaxis estimates a 76 percent chance that Abengoa will be bankrupt within two years. On August 3, Abengoa announced it will be selling off 500 million euros worth of assets to help cover the company's debt obligations. At this writing, the firm's short-term debt liabilities run about 17 billion. That's mainly as a result of the company plowing a whole lot of cash into building projects worldwide, few of which have provided much in the way of financial return.
Abengoa's announcement of the asset sale prompted one corporate law firm to announce that it was investigating Abengoa for possible violations of the provisions of the Securities Exchange Act that cover insider trading.
Shareholders weren't happy with the announcement, either: the company's stock price fell by 30 percent last week.
Suspicions that Abengoa is not the most financially healthy of companies aren't new. You could be excused for concluding that the company is asking for this construction delay in the hope that Abengoa will be able to solve a few of its financial woes before it has to lay out cash to pay the people who operate the bulldozers.
It may be that the company is hoping new financial incentives will emerge from the Obama administration's Clean Power Plan, which is intended to pressure states to lower the amount of carbon they emit by generating power. Or it may be that Abengoa regards Palen as an asset on paper, which they'll keep alive as long as possible in the hope that they can sell Palen off to a company that has money to burn.
Either way, it looks like this won't be the last we hear of the Palen Solar Electric Generating System.
