As you drive south on I-15 and cross into California you can’t help but be mesmerized by the three shimmering towers that are the focus of an array of mirrors and squint to try to catch a glimpse of a smoking bird plummeting to earth, cooked in the 800-degree heat that also boils water and generates a bit of electricity.
But the plant may turn out to be more of a black hole for taxpayer and ratepayer money. After getting a $1.6 billion loan from the Energy Department to build the $2.2 billion plant its owners — NRG Energy, Google and BrightSource Energy — now are seeking a $536 million federal grant to help pay off that federal loan, according to an article in Forbes.
This because the sun has not cooperated with an adequate amount of sunshine. Instead of operating at 30 percent of its rated capacity as anticipated, it is operating at a mere 12 percent. Earlier this year the plant owners asked to be allowed to use more natural gas than had been planned due to this underperformance.
The plant has contracts with California utilities to sell power for 12 cents per kWh, about three times the cost of a natural gas plant, but even if the plant were operating at full capacity its construction cost would be 9 cents per kWh, according to the Forbes write. With operating costs the fact it is underproducing, this would appear to leave no room for something we like to call profit, with which I’m sure the plant’s billionaire owners are familiar, though risk is something to which they are averse.
The plant also uses something the desert doesn’t have much of: water. It sucks 32 million gallons of groundwater a year for its boilers, and that is more than can be naturally replenished. That is called water mining. Eventually, they will run out.
Now, how did this project get built on federal public land in the first place?
According to an Inspector General report, Steve Black, at the time a senior counselor to former Interior Secretary Ken Salazar, pressed scientists to soft pedal their estimates of the damage Ivanpah would cause to endangered species, such as the desert tortoise.
The Crescent Dunes power plant near Tonopah is scheduled to go online after the first of the year. It will use focused sun rays to melt salt instead of boil water. We shall see how it does. It was built with more than $700 million in federal loans.