In the wake of the Solyndra bust, SolarReserve received $737 million in government loan guarantees from the Department of Energy to build the Crescent Dunes Solar Energy project near Tonopah in Nye County, Nevada.
The solar projects developer is building a 110 megawatt solar plant — the state’s largest — using United Technologies’ Power Towers, a proven concentrating solar power technology that uses tracking mirrors (heliostats) to direct sunlight on a receiver that heats salt to more than 1000 degrees Fahrenheit. The power plant can provide solar power day or night by pumping the stored molten salt to a steam generator.
Nevada’s energy utility, NV Energy has already signed a 25-year agreement to purchase energy from the plant, which will power approximately 75,000 homes at peak operating capacity. Cleantech Authority spoke with Tom Georgis, Senior Vice President of Development at SolarReserve about their Tonopah project.
The Energy department guaranteed $737 million in loans to SolarReserve for your Crescent Dunes Solar Energy Project. How will this project benefit the country?
The project provides numerous benefits to the country in terms of job creation, reduction of harmful greenhouse gas emissions, and the deployment of an American-developed clean technology. The Crescent Dunes Solar Energy Plant is expected to create more than 600 direct jobs over the 30-month construction period, and more than 4,300 direct, indirect, and induced jobs at companies throughout the US that provide engineering, equipment supply, and manufacturing, transportation, and other value-added services.
Given Solyndra’s bankruptcy, American taxpayers are concerned about investing in solar. Is there anything your company is doing differently that will reassure taxpayers that their investment is sound?
The biggest difference between this project investment and Solyndra is that the loan is going to a project that has a 25-year contract with revenue coming from Nevada’s largest utility company, NVE. The Solyndra deal was a direct investment in the company and projected sales of their technology in the market. Our one big sale has already been concluded with the 25-year NVE power contract.
Many feel that government dollars shouldn’t be invested in private industry. Would you have been able to finance this project privately?
It should be noted that the government routinely invests in almost every facet of private industry at some point, including billions of dollars in subsidies to the oil and gas industry. Clean technology and renewable energy benefit from government support in the same way, and helps the US remain competitive with other nations such as China, Germany, and Spain. Financing the project with commercial debt certainly would have been more challenging. The project also required $260 million in private equity, which was successfully raised.
The DOE guarantees loans to businesses that are expected to turn a profit and repay the loans. When do you envision this project will become profitable?
The loan will be repaid over time with interest per the terms in the DOE loan agreement.
The clean energy race is getting more competitive every day, particularly solar. Will your project help America abroad in any way?
The fact that we are building our first project with this U.S. technology will make it easier for SolarReserve to develop, finance, and build projects internationally — creating markets for exportation of this technology that will result in more green manufacturing, engineering, and development jobs here in the U.S.
Since 2008, solar panel prices have dropped by more than half, but the cost of building a CSP plant stayed about the same. This year, one solar thermal power plant after another have reacted by abandoning steam technology in favor of panels. Your concentrated solar power plant uses steam technology. Though it’s a proven technology, can it generate power at a competitive rate given the falling cost of panels?
The cost of our technology will continue to decline as we build more and more facilities around the world. What differentiates our technology from PV and other solar thermal plants that use direct steam or therminol (trough) is that we use molten salt to collect and store thermal energy. We can then create steam on demand when the utilities need and value it most — operating like a conventional power plant. PV certainly has advantages such as price (for now), but it is an intermittent resource that requires conventional power to back it up when the sun is not shining.
The ability to generate solar power at night is a huge bonus. With the many renewable technologies out there, do you see molten salt technology occupying the nighttime niche in the solar energy market or do you think it will be able to produce power at all times of the day at a rate that’s competitive some years down the road?
On demand generation even at night is a huge advantage for this technology. Peak power in the west often extends well into the evening hours from early afternoon. We can customize how our plant operates to best meet the needs of our customers. Storage also allows us to double the electricity output of our facility in comparison to a similarly sized PV or other solar thermal plant. As fuel prices increase and the costs of integrating intermittent resources climb, we are confident we will be able to compete on price in the near future.