There have been a lot of twists and turns for a 709 MW solar project that has been planned to be built in the Imperial Valley in Southern California. Now here’s the latest: While the project changed hands from Tessera Solar to AES Solar Power earlier this year, we just learned that utility San Diego Gas & Electric, which had a contract to buy the solar power from the project, canceled its contract a few months ago, according to SDG&E spokesman Art Larson.
When a utility drops a contract after several years, it’s a big deal and could indicate that the project might have serious problems. The utility originally signed a contract in 2005 to buy 300 MW of power from the project, and the contract included options to get more power from the same project. After years of development work, Tessera finally clinched a license from the California Energy Commission last September.
But after scoring the energy commission license, Tessera sold the project, along with another 850 MW proposal, after it emerged that its parent company, NTR, had posted huge losses and was having trouble lining up financing for the two projects. It probably didn’t help that the Imperial Valley project became a target of a lawsuit around the time when NTR was facing financial woes.
AES has been tight-lipped about its plans for the Imperial Valley Solar project. Its spokeswoman, Patty Rollin, has repeatedly said the company won’t comment on the progress of the project until the project has secured financing or begun construction. The original plan by Tessera was to use a type of concentrating solar thermal (CSP) technology developed by its sister company, Stirling Energy Systems. The technology uses sunlight to heat and expand hydrogen gas to run Stirling engines, which then drive an electricity generator.
Last week, AES sent the energy commission a letter asking it to revoke the license for the Imperial Valley project. The company said it was planning to use photovoltaic (PV) technology instead of Stirling engines, and as a result, the project would no longer be under the authority of the energy commission. The energy commission issues licenses only for solar thermal power projects over 50 MW, regardless of whether the projects will be located on public or private land. But it doesn’t oversee solar power plant proposals that will use PV technology, which refers to solar panels. Typically a county or city would be the primary permitting agency; a PV project that will be built on public land will instead require a federal permit.
AES then sent another letter this week asking the energy commission to disregard its letter it sent last week. Energy commission spokeswoman Sandy Louey referred questions about the second letter to AES. She did say AES has until June 30, 2011, to ask the energy commission to revoke the license. If the company doesn’t, then the energy commission will charge AES a $25,000 annual compliance fee.
The Imperial Valley project has been set to be built on land overseen by the federal Bureau of Land Management. BLM spokeswoman Erin Curtis said the company has told the BLM that it plans to send a revised project proposal shortly.
A decision to use PV technology instead of Stiring engines wouldn’t be surprising. The price of solar panels has dropped more than half in the past two years, and that has prompted developers who didn’t consider solar panels before to change their minds.
Solar Trust of America, a solar thermal power plant developer, recently announced a joint venture with SolarHybrid to develop projects using solar panels. SolarReserve, another solar thermal power plant developer, has teamed up with GCL-Poly Energy’s GCL Solar Energy to build solar panel–based projects. Solar Trust isn’t only interested in developing stand-alone PV power plants; the company also wants to place solar panels next to solar thermal fields, because the two technologies can complement each other, said Solar Trust’s CEO, Uwe T. Schmidt.
K Road Power, the buyer of Tessera’s 850MW project called Calico Solar, has said it would use solar panels for most of the power plant and rely on Stirling engines for the rest. Although Tessera sold Calico as a 850MW project because it came with a grid interconnection agreement for that generation capacity, the company’s license for building it in California limits the capacity to 663.5MW. Tessera had a contract to sell power from Calico to Southern California Edison. Edison canceled the contract last December.
Image courtesy of Valerie Everett via Flickr