(Page 2 of 2)
But Brightsource's loan guarantee comes with conditions. The company still has to get the final approval of local, state, and federal regulatory agencies. It hoped to start construction a year ago, but the approval process has taken longer than expected. The company is working with Southern California Edison to upgrade transmission lines for the project. And it's working through environmental issues, moving parts of the power plant and decreasing its size to preserve rare plant and animal species.
The main problem is that companies lack experience in choosing appropriate designs and locations for solar thermal plants. In one misstep, many companies selected technology that requires large amounts of water--something that's very difficult to get approved for the desert locations where these plants need to be. Brightsource chose a more expensive technology that consumes relatively little water, and Ricker thinks this has helped its application.
There were some other bad decisions about where to locate new power plants. "After the 2005 energy policy act, there was a rush to develop on public lands in the desert," says Laurel Williams, a deputy conservation director of the California Wilderness Coalition, based in Oakland, CA. "For a lot of projects that were proposed, people just looked at a map and circled the land, without consultation."
Several of the sites chosen were on public land that had originally been donated to the government for the purposes of conservation. In December 2009, Senator Dianne Feinstein (D-CA) submitted a bill to Congress that would officially set these areas aside as part of a national parks, prohibiting their use for new solar projects. The bill has led to the cancellation of 11 proposed projects, including one from Brightsource. The Ivanpah project is outside the areas that would be protected.
Regulations make site selection more difficult, but there should still be plenty of land for California to meet its renewable energy targets, Williams says, even if all that renewable energy were to come from solar thermal projects. To meet that goal would require between 60,000 and 128,000 acres of land, but there are over 25 million acres in the Southern California deserts, much of which has already been used for other purposes, eliminating environmental concerns. Efforts are underway by the U.S. Department of the Interior to set aside 350,000 acres of previously disturbed land near existing transmission lines specifically for renewable projects. Solar plants that were canceled because of the proposed Feinstein bill would have first dibs on this land, Williams says.
If the solar thermal industry is to take off, however, one basic change needs to be made to existing law, according to Ricker. Currently, to qualify for the grant in the stimulus package, construction on a power plant needs to start by the end of this year. At the current rate, the Ivanpah project could be the only one to start by then. Ricker says the deadline should be extended a few years to give other proposed projects a chance.
The company thinks adding solar-thermal technology to its natural-gas plants will make them run more cheaply and efficiently
Startup BrightSource announces a new system that could allow future solar plants to run at night.
New legislation might slow green technology investment, but other laws could help pick up the slack.
Nuclear power will always be controlled by the government, & is more expensive than any other power generating technology. The deserts of America are the best place for solar thermal, not for any reason would they be the best place for nuclear. We have a real chance to power our country by solar & geothermal.
My power is owned by my city government. It is 30% cheaper than the private sector's price and has better uptime. I'll take it.
You are talking about old, gigantic nuclear power plants, but there is better technology now that can be made modular. There is also the possibility for Thorium breeder reactors, traveling wave reactors etc. I'm a solar and wind supporter, but nuc is the only clean technology that can really scale to solve our energy issues. The answer to the question of when we will cover Arizona with solar panels and put gigantic fan blades to kill every bird flying over every windy pass is:
Never. We simply will not do that.
End the billions in subsidies to the oil industry and others, and channel those funds directly into projects like this one. Done.
Bravo LT!
I wholeheartedly agree with that comment. We have the money, it's just tied up elsewhere. Legacy businesses who still rely on subsidies should be permitted to die if they are not solvent by now.
Taxes for developing new ideas is fine, but once you have enough money to hand out some seriously FAT bonuses or pay HUGE salaries, then you should be on your own.
Perils of removing investment risk
This looks like a promising project and should contribute to the important public policy goal of ensuring an adequate supply of clean, domestically produced energy. But I would have thought that, given the guaranteed market for electricity and previous pilot plant experience, the private sector would have been able to fund the entire project. I guess the US Federal Government is so flush with cash that it wanted in. Seriously though, is this not risking the same type of situation that recently arose in the real estate market? The reasons for that mess are complex; but many people believe that the problem got kick-started when the government directed Fannie Mae to assume the risk of mortgages that would not have otherwise been provided. In that case, the justification was also an important public policy goal: providing home ownership to millions of families who could not achieve it in a purely private sector market. When the government is willing to cover the downside, private sector investors have been known to suffer a decline in their decision-making acumen. Let’s hope it doesn’t happen in the renewable energy industry.
Re: Perils of removing investment risk
You are absolutely right to say that "many people believe" that fannie/freddie caused the problem when directed by congress to take on the risk of sub-prime loans.
However, despite the fact that many believe it, it is simply factually incorrect. It never happened. fannie & freddie were never directed to take the risk out of any mortgages. They were directed to prioritize giving loans to people that were not being granted mortgages (or being given very high rates) from the private sector because...wait for it...discrimination, primarily racism. The program *required* you to prove that you are just as economically qualified and just as low risk as other mainstream borrowers.
People who were not getting loans because they were high risk were *never* a target market for freddie/fannie at congress' direction or otherwise. F/F held a miniscule proportion of the bad debt, and the proportion that they held was a smaller percentage of the bad debt than the percentage of all loans held by F/F.
The federal gov't did not do anything to remove risk beforehand. In fact, in many ways it was utterly indifferent to risk. It didn't see risk in places where risks were high. Not seeing any risk, it of course made no move to protect people from risk. You have to actually notice the risk before you can direct people to neutralize it.
After the fact the actions of the federal government insulated private corporations and shareholders from the losses that were their due. This makes people *believe* that they don't have the same level of risk because they think they will be bailed out next time, too. And they are probably right. But the F/F thing is a total myth - believed by many, sure, but still a total myth.
We now return you to energy issues...
The facility is a peaking power plant. Hard to believe that it can compete with a combustion turbine , particularly given the price of natural gas.
My back-of-the-envelope calculation suggests price of natural gas must be north of $12/mmBTU for this to work in an open marketplace. My hunch is the politicians are skewing the economics with much more than just loan guarantees.
Yes, of course. Read the article. The demand comes from the so-called Renewable Portfolio Standard, or RPS which is a minimum percentage of electricity provided by renewables. This can be calculated daily - so you can never go under on a given day - or the daily calc can be averaged over the year or over a season. Daily only calcs are not used in the US. I'm not sure if we use seasonal averaging anywhere, I think that's only overseas, but it's a good idea b/c it means that you need both winter-resources & summer resources, thus incentivizing diversity.
For an understanding of how setting an RPS leads to a profit-maximizing company buying energy contracts with renewable generation companies, see the work of Becky Lafrancois who has pioneered this branch of economics.
Important to understand, however, the loan guarantees are federal, the RPS is state by state.
FYI The Palo Verde Nuclear Power Plant is in the desert near Phoenix, Arizona.
Uses treated sewage water from Phoenix for cooling towers.
As Dr. Chu stated it takes 10 years to get a new power line approved.
And $5 a watt for 400 megawatt of intermittant power --- crazy.
The US will need to do better to compete in the world economy.
What is the total cost to the citizens? We need these numbers to include the tax and rate payer's burden to cover the federal and state tax credits & grants, utility rebates, value of loan guarantees, and net metering subsidy so we can understand the actual total cost. Is this economically viable without these subsidies or is it at least close?
In other words, what is the real ROI of this (ad)venture. I'm not trying to imply we should not do this, I just want to know up-front the cost and the expected output.
Kevin Bullis, can you supply us these numbers?
Why put in desert. Should go on existing commercial and residential roofs. This is bad and inefficient and horrible for our wilderness.
It is indeed a good start for a green earth. Wish the project all success.
Manufacturing in the United States is in trouble. That's bad news not just for the country's economy but for the future of innovation.
On Twitter
Become a Fan on Facebook
Subscribe to the Feed
tammons
8 Comments
loan gaurantees for solar
Too bad there isn't a nuclear power component to Bright Solar's plans-- maybe throw in a nuclear power plant in the desert along side the Solar thermal plant to provide back up and peak power to the solar thermal effort-- the Obama administration would back that up in a second. Besides the desert is a good place for a Nuclear power plant.
Reply
erbium
340 Comments
No nuclear component
If there WAS a nuclear component then theyd' need another 10 years plus another 10 billion plus 1000 highly qualified people, approval of NIMBYers due to the forever low level contamination of the area, and local storage of radioactive waste, security from terrorists, etc.
Reply
Mekhong Kurt
13 Comments
Re: loan gaurantees for solar
Leaving aside every other concern some have about nuclear power plants, we immediately run into the same problem we encounter with solar: water. That problem is worsening practically by the day.
Reply