One of the most ambitious solar energy projects on the planet is in trouble. The $2.2 billion Ivanpah concentrated solar power facility in California has fallen well short of its expected power output and now has a year to get itself back on track, or it risks being forced to shut down.
The California Public Utilities Commission granted a reprieve to the plant on Thursday, preventing it from going into default on its contract with Pacific Gas & Electric and Southern California Edison.
Built by BrightSource Energy, NRG Energy, and Google, Ivanpah has been dogged by criticism from environmentalists since construction began. The plant uses thousands of mirrors to concentrate the sun’s energy and heat water to produce steam and generate electricity. Last year BrightSource canceled a planned concentrated solar power plant in Inyo County, California.
Concentrated solar power has one key advantage over solar photovoltaic, however: coupled with energy storage systems, such as heated molten-salt tanks, it can provide power even when the sun’s not shining.
In the agreement, the Ivanpah owners, which include NRG Energy, BrightSource Energy, and Alphabet’s Google, agreed to pay the investor-owned utility for undelivered electricity required by the power purchase agreements (PPAs) on the 126 MW Ivanpah unit 1 and the 133 MW unit 3 instead of defaulting on the contract.
A 2013 study from the National Renewable Energy Laboratory found that the value of concentrated solar plus thermal storage could be $32 to $40 per megawatt-hour higher than that of a photovoltaic plant in 2020. BrightSource rival SolarReserve is building a 110-megawatt concentrated solar plant in Nevada that includes molten-salt storage, and a similar plant in South Africa.
This is the latest in a series of controversies the Ivanpah solar facility has faced since the CPUC approved the PG&E power purchase agreements (PPA), and another PPA with Southern California Edison for some of output in 2009, and began development in the Mojave Desert in 2010.
Now this agreement signals more confidence from commissioners that the facility’s output will improve, Bloomberg reports.
Other controversies dogging the project include impacts on wildlife such as California’s desert tortoise, and local avian life, as well as how its developers handled a $1.6 billion federal loan guarantee awarded in 2010.
Even so, the threat of default throws doubt on the project’s future, the news outlet said. The plant’s builder, EverSource, told energy officials in 2011 that its cash position was «precarious» and that the plant’s failure will be a black mark against the White House, Bloomberg reported.
The CPUC Office of Ratepayer Advocates (ORA) opposed approval of the forbearance agreement, claiming the agreement failed to adequately assess the least-cost impacts for ratepayers and because it does not adhere to the utility «Standard of Conduct.»
Those forbearance agreements end August 1 unless PG&E signs a six-month extension.