Looming Spanish Bankruptcy May Reshape California Solar | KCET
Looming Spanish Bankruptcy May Reshape California Solar
A major player in the California desert solar power scene may not be playing much longer. Abengoa, the Seville, Spain-based renewable energy company that owns and operates the 250-megawatt Mojave Solar project near Hinckley, CA, has filed for protection from creditors in a Spanish court, in what may well be the start of bankruptcy proceedings.
Abengoa now has four months to arrange a plan to pay off its debt before a decision whether the company files for bankruptcy. A bankruptcy, which would be the largest in Spain's history, would almost certainly involve the sale of Abengoa's assets.
And aside from Mojave Solar, Abengoa's assets include the controversial, still-on-paper Palen Solar project, proposed for Riverside County near Joshua Tree National Park.The filing thus spells the latest in a series of mishaps for the increasingly unlikely project.
Abengoa has also built solar projects operated by other companies, such as the Lone Valley Solar PV projects near Lucerne Valley and the Mount Signal Solar project near Calexico, for which Abengoa built the transmission components. Abengoa also owns the Solana parabolic trough solar plant near Gila Bend, Arizona, which made headlines when it went online in 2013 for including a thermal storage component the company claims can deliver six hours' worth of power after sunset.
Worldwide, the firm is involved in solar, wind, transmission and conventional energy projects in South Africa, South America, the Middle East, and (naturally) Spain.
The decision to pursue insolvency came last week after Basque steel company Gonvarri decided not to provide an infusion of 350 million euros in new investment funding for Abengoa, which was just the latest in a series of lenders declining to do business with Abengoa. The company claims it's about 9 billion euros in debt, but analysts place the company's actual exposure at closer to 20 billion euros.
Since 2010, Abengoa has received in excess of $2.2 billion in loan guarantees from the U.S. government: it's unclear how much of that has been paid back.
The company's woes aren't limited to lack of cash on hand: this week, a Spanish group representing small investors sued Abengoa for stock losses stemming from the decision. Abengoa's stock lost almost half its value on Wednesday after the announcement was made that the firm is filing for protection.
This isn't the first bankruptcy in the Palen project's varied history. Approved as a parabolic trough plant by the California Energy Commission in 2010, the plant hit its first roadblock when its original owner, German firm Solar Millennium, went under the following year. Oakland-based BrightSource Energy picked Palen up at Solar Millennium's bankruptcy garage sale, then brought Abengoa on as a partner in the joint venture Palen Solar Holdings.
As reported extensively here at KCET, the two companies proposed to redesign Palen to use two 750-foot power towers surrounded by tens of thousands of mirrored heliostats to generate power. Opposition to the design changes from environmentalists and local native activists forced delays in state approval of the plant, and BrightSource sold its interest in the plant to Abengoa in November 2014 after it became clear the plant wouldn't be operational in time to meet deadlines for federal tax credits.
The clock is ticking on Palen. The Energy Commission's original 2010 approval of the plant was set to expire on December 15. In August, Abengoa asked the California Energy Commission for a one-year extension on that approval, to give the company time to re-redesign Palen as a parabolic trough solar plant with storage, similar to Solana. In September the Commission granted that one year extension, but there's a catch: Abengoa has to file a petition by December 22 to amend the original 2010 approval to include thermal power storage. If the company misses the deadline, the original 2010 approval of Palen expires.
That's not a trivial deadline: a similar petition filed in 2012 to amend the 2010 permit from the Energy Commission ran to 285 highly technical pages. Preparing such a petition is a considerable task, and it may well be that Abengoa's corporate attention will turn out to be focused on the firm's survival, rather than on a project that will only add to Abengoa's financial burden if it goes forward.
It may well be that by December 23, we'll know for sure whether the often-revived Palen project will be dead for certain.
For ongoing environmental coverage in March 2017 and afterward, please visit our show Earth Focus, or browse Redefine for historic material.
KCET's award-winning environment news project Redefine ran from July 2012 through February 2017.
Watts Coffee House has been open for more than 50 years, but since Desiree Edwards took over in 1997, the restaurant has become a community gathering place and driver for a more positive future for locals.
Aqeela Sherrills is a Watts native who grew up around street gangs. As an adult, he decided to team up with other community members to build a more peaceful, prosperous Watts.
A chaotic riot narrative may have plagued Watts for the last five decades, but these long-running organizations show the community’s deep and lasting legacy of political and cultural organizing.
There will be a pre-screening conversation with Beatles authority Martin Lewis.
- 1 of 176
- next ›