Sometimes, government makes a bad bet.
Case in point: the Ivanpah solar project. Maybe you’ve seen the unsightly, blindingly bright towers while traveling from L.A. to Las Vegas, in the Mojave Desert near the California-Nevada state line. Maybe you’ve read about birds getting fried to death as they fly through the sunlight directed to the tops of the towers by fields of mirrors.
When state officials agreed to let Pacific Gas & Electric and Southern California Edison buy power from Ivanpah roughly 15 years ago, they saw this type of technology — known as “concentrated solar power” — as the future of renewable energy. It was expensive, but it would get cheaper over time — and therefore it made sense to let PG&E and Edison customers pay for it through their electric rates, state officials decided.
Federal officials made a similar bet, helping finance Ivanpah through $1.6 billion in loan guarantees.
They were all wrong. Ivanpah’s concentrated solar technology, which uses sunlight to heat a fluid and generate steam, never worked as well as expected. Meanwhile, solar photovoltaic panels that convert sunlight directly to electricity got super cheap. Ivanpah quickly became known as an expensive, bird-killing eyesore.
All of which led to PG&E’s surprise announcement this month that it had struck a deal with the plant’s owners to stop buying electricity from Ivanpah. Assuming that state officials sign off — which they most likely will, because the deal will lead to lower bills for PG&E customers — two of the three towers will shut down come 2026.
Ivanpah’s owners haven’t paid off the project’s $1.6-billion federal loan, and it’s unclear whether they’ll be able to do so. Houston-based NRG Energy, which operates Ivanpah and is a co-owner with Kelvin Energy and Google, said that federal officials took part in the negotiations to close PG&E’s towers and that the closure agreement will allow the federal government “to maximize the recovery of its loans.”
It’s possible Ivanpah’s third and final tower will close, too. An Edison spokesperson told me the utility is in “ongoing discussions” with the project’s owners and the federal government over ending the utility’s contract.
It might be tempting to conclude government should stop placing bets and just let the market decide.
Hellbound and Down 