Solar Energy's Real Problem
Solar Energy's Real Problem
Ivanpah, the world's largest solar power plant located in California's Mojave Desert, caught fire last Thursday, causing damage to one of the plant's three towers. This latest engineering setback is the least of the plant's woes. Prohibitive economic realities are the true problem.
Earlier this year, the California Public Utilities Commission (CPUC) decided to postpone its continued support of the struggling facility, which was touted as the future of solar power when it opened in 2014. But after receiving $1.6 billion in loan guarantees from the Department of Energy (DOE) and $535 million from the U.S. Treasury Department, the facility's promising future is turning out to be a multi-billion-dollar waste of money.
Ivanpah is unable to meet its intended electricity generation of 940,000 megawatt-hours per year, despite its designation as the largest concentrated solar plant in the world. Pacific Gas & Electric (PG&E) received only 45 percent of the electricity it expected from Ivanpah in 2014 and 68 percent in 2015.
Output is so low, in fact, that it fails to meet Ivanpah's power purchase agreement, which requires a set amount of electricity production for a certain price.
Ivanpah's managers found that the facility needs to produce much more steam than initially thought to run efficiently, which requires substantially more natural gas than originally planned to supplement the concentrated solar each morning. Weather predictions underestimated the amount of cloud cover the area receives, which prevents the facility from consistently producing high levels of electricity.
Ivanpah is not the first taxpayer-funded renewable to fail. In 2009, Solyndra, a solar panel manufacturer, received a $535-million loan guarantee from the Department of Energy. The Obama administration encouraged the DOE to expedite the decision-making process so Vice President Biden could announce the program as a political success sooner. At the same time, Chinese solar panels becamecheaper, and natural gas prices plummeted, making Solyndra a lousy investment. The DOE convinced Solyndra to delay layoffs until after the 2010 midterm elections as a political move. In August 2011, Solyndra declared bankruptcy.
Taxpayers paid a half-billion dollars to Solyndra and never saw the promised benefits. Both Solyndra and Ivanpah were free to make risky investments without risk of failure because the companies funding came through the political system rather than through the competitive market.
Renewable energies undoubtedly have a future in the United States. As the cost of extracting and using fossil fuels rises and costs for renewables decrease following technology improvements, developing renewable energies will become more cost-effective. Until then, forcing investment in renewables comes at a huge cost to taxpayers with little reward.
Ryan Yonk, Ph.D., an assistant professor of research at Utah State University, is vice president and executive director of research at Strata. Devin Stein is a student research associate at Strata.
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