Palen solar project near Joshua Tree on life support

Sammy Roth | The Desert Sun

The fate of the Palen solar plant could be decided in two weeks — and this time, it might finally be dead.

Abengoa, the Spanish company behind Palen, stunned the clean-tech world last month when it entered pre-bankruptcy proceedings. If the firm can't work out a financial rescue plan in the next few months, it will become the largest bankruptcy case in Spain's history.

Nobody knows for sure what Abengoa's financial turmoil means for Palen, which has faced intense criticism from environmental groups. The California Energy Commission has given Abengoa until Dec. 22 to submit updated designs for Palen. If Abengoa doesn't meet that deadline — which experts say it almost certainly won't — the company's building permit will expire, killing Palen.

"Realistically, no. It seems sort of like pie in the sky," said Colin Smith, a solar analyst at GTM Research, a Boston-based clean-tech consulting firm. "My guess is there’s no way they could do that in time with any effect.”

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Abengoa didn't respond to a request for comment.

The Palen solar plant, planned near Joshua Tree National Park, was once envisioned to include 750-foot “power towers” that would generate electricity by heating fluid with sunlight reflected from a gigantic field of mirrors. A similar plant, Ivanpah, sits along Interstate 15 near the California-Nevada border.

Environmental groups opposed the Palen power towers, saying they would kill thousands of birds by burning them alive in the "solar flux" created by the mirrors. Critics were also concerned the incredibly bright towers would ruin views in Joshua Tree.

Solar power after dark

Abengoa was forced to enter pre-bankruptcy proceedings after piling up $9 billion in debt. Solar analysts disagree about where the company went wrong, but they agree its financial distress is bad news for a technology Abengoa has championed: concentrated solar power.

Unlike traditional solar panels — which convert sunlight directly to electricity — concentrated solar plants use sunlight to heat a fluid, which generates steam to turn turbines and create electricity. Advocates have touted concentrated solar technology, which can store energy for use after the sun goes down, as critical to the transition from planet-warming fossil fuels to clean energy. California, they've argued, will never be able to meet its 50 percent renewable energy mandate without some solar energy storage.

Concentrated solar is increasingly popular in other parts of the world, but it has largely failed to take off in the United States due to its high costs. It hasn't been able to compete with traditional solar panels, which have gotten cheaper and cheaper in recent years.

Some had hoped Abengoa would help contracted solar gain a foothold in the U.S.

“I was surprised and shocked by the Abengoa announcement, because we had just talked to them this fall, and they seemed to have a business path going forward," said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies, a Sacramento-based trade group. "I don’t know what the future of the technology is, but I do think the future of the technology is going to be an important part of the renewable portfolio.”

Abengoa's financial troubles are unlikely to impact the solar plants it has already built in the United States, including the 280-megawatt Mojave solar farm near Barstow and the 280-megawatt Solana project in Arizona. Those plants are owned by subsidiaries and secured by long-term contracts to sell electricity to utility companies.

A troubled history

To borrow a term from Hollywood, the Palen solar plant has been in "development hell" for the last five years.

The California Energy Commission approved Palen in 2010, but the plant's original developer — the German firm Solar Millennium — went bankrupt. Oakland-based BrightSource Energy bought the rights to the project in 2012, later bringing on Abengoa as a partner.

BrightSource asked the energy commission for permission to change Palen from a "parabolic trough" to a "power tower" design. Both models involve heating fluid to generate steam, but the similarities end there. "Parabolic trough" projects use curved, ground-mounted mirrors to direct sunlight at thin collector tubes containing the heating fluid. "Power tower" projects use thousands of mirrors to focus sunlight on boilers at the top of huge towers.

Environmental groups opposed the new design. They pointed to Ivanpah, where they said similar towers had killed thousands of birds. Ivanpah's backers have disputed those numbers.

Energy commissioners nearly rejected the new Palen proposal, but they changed their minds when the developers promised to add energy storage to the design. Two weeks later, though, the developers scrapped their plans to build Palen, indicating they wouldn’t finish in time to qualify for a 30 percent tax credit that expires at the end of 2016.

Palen looked doomed. But a few months later, Abengoa bought out BrightSource’s interest in the the project, saying it would go it alone — with or without the tax credit. Earlier this year, Abengoa told the energy commission that it would revert to the original "parabolic trough" technology. It also promised to include energy storage.

There was another problem, though. Palen's original, 2010 license required construction to begin by December 2015. So the energy commission compromised: Abengoa could have another year to start construction, as long as it submitted updated designs by Dec. 22, 2015. Abengoa now appears unlikely to meet that deadline.

Smaller towers

It's possible Abengoa will sell Palen and other projects in its development pipeline. But any firm that buys Palen would probably need to convert it to a traditional solar farm, said Smith, the Boston-based solar analyst.

"Probably nothing’s going to happen," Smith said. "The number of hurdles that they’d have to overcome to get where they need to get to get the projects built is really high."

White sees the future of concentrated solar moving toward smaller towers. Ivanpah is the only mega-tower project that has come online in the United States, while several others have failed to make it through development.

“What we’ve learned is that while in theory you can get economies of scale when you make them bigger, when you make them as big as 200, 300, 500 megawatts, there’s a lot more that can go wrong," White said.

White pointed to the 110-megawatt Crescent Dunes solar tower in Nevada, which began generating electricity in October, as a model. He added that he expects costs to come down as more concentrated solar plants are built and operated abroad.

Sammy Roth writes about energy and water for The Desert Sun. He can be reached at sammy.roth@desertsun.com, (760) 778-4622 and @Sammy_Roth.