A controversial solar power tower project proposed for Riverside County that was recently pulled by its owners from consideration will be brought back to the table by one of those owners, it was announced Tuesday.
The Spanish firm Abengoa Solar, which had proposed to build the Palen Solar Electric Generating System along Interstate 10 west of Blythe with its business partner BrightSource Energy, announced Tuesday that it will be buying out BrightSource's interest and will be moving forward with a redesigned version of the project.
The two firms had pulled Palen from consideration by the California Energy Commission in September, in a surprise move that capped a complicated series of reversals by the Energy Commission as it considered whether to approves the massive project.
In a press release issued Tuesday, Abengoa announced that the firm will be proposing a new design for Palen that includes one solar power tower along with a mechanism to store solar thermal energy using molten salt, which would theoretically allow the facility to generate power when the sun isn't shining, at night, or during periods of cloud cover.
It's widely assumed that Abengoa and BrightSource pulled the project in September due to investor nervousness: many months of delays in the project meant that the facility wouldn't be online in time to qualify for a federal production tax credit that will be expiring in 2016. Meanwhile, the Ivanpah Solar Electric Generating System, also designed by BrightSource, has been plagued by power generating shortfalls that have certainly cut into the plant's revenue, to the point where the plant's owners are now seeking federal grants to pay back the federally backed loans that paid to build the plant.
Investors may have worried that the the similar but larger Palen plant, as designed by BrightSource, would suffer similar impediments to generating both power and income. That uncertainty isn't limited to BrightSource's power tower designs: Solar Reserve's 150-megawatt Rice Solar Energy Project, which is fully approved and permitted by all the relevant agencies and has an existing contract to sell power to Pacific Gas and Electric, still hasn't broken ground due to lack of investor interest.
The California Energy Commission approved a solar project on the Palen site in 2010, but that approval covered a project built using parabolic trough solar technology. The original owner Solar Millennium went bankrupt soon after, and BrightSource bought the project in 2012, bringing Abengoa on as a business partner shortly after that. The proceedings that were cut short when the project was pulled in September covered an amendment to the original permit that would have allowed a design change from parabolic trough to power tower technology.
Presumably, if Abengoa gets serious about rebooting the Palen project in yet another revised power tower form, the company would have to go back to the drawing board with the Energy Commission as well, but it's unclear how far toward square one approval of a new design would need to go. The Energy Commission had signaled in early September that it would likely approve a revamped design with one power tower and the capacity to add molten salt storage, so it's possible regulators would be amenable to taking shortcuts to approve the project.
In its Tuesday press release, Abengoa pretty much spelled out its logic:
Taking into consideration the [Energy Commission] recommendation to develop a one tower project, Abengoa will pursue a different configuration from that which was originally submitted, incorporating storage, which was addressed as a need for a second tower. This change addresses the clear signals from the California Public Utilities Commission, California [Independent System Operator] and [Energy Commission] that storage is an important part of the energy market in California.
The Public Utilities Commission is motivated enough to promote solar thermal with storage that it actually approved power purchase agreements it felt were too expensive for BrightSource's now-abandoned Rio Mesa power plant in October 2012. Rio Mesa wouldn't have included a storage component, but BrightSource had assured the CPUC that building Rio Mesa was a necessary step in building a future plant that would include storage.
That means that regulatory approval is unlikely to prove too much of a roadblock to building Palen 3.0.
Still, the California desert is figuratively littered with apparently abandoned proposals for power tower plants from Rice to Rio Mesa to Hidden Hills, and it's not clear whether a slack investment climate may yet doom Palen to remain another paper project never to be built. We''l be keeping our eye on Abengoa.