CSP Today examines the latest developments in BrightSource’s review of its multi-million dollar 392 MW Ivanpah project and how it will contribute to the US economy

Two weeks after the foray generated by the LA Times article, “Taxpayers, ratepayers will fund California solar plants” Joseph Desmond, SVP of Government Affairs and Communications at BrightSource Energy delivered a speech at the United States Energy Association Annual Energy Supply Forum on 4 October 2012. Here he highlighted the important role new energy programmes play in promoting the economic future of the USA.

Desmond affirmed that “Nationally, high energy prices reduce disposable income, increase costs to businesses, decrease consumer confidence and sap US competitiveness in an age where we must compete globally”.

He further commented that he knew “the political consequences of such failure first-hand”. After all, Governor Schwarzenegger, under whom he served as Chairman of the California Energy Commission, “was elected as the result of a recall campaign prompted by his predecessor’s inability to keep the lights on during the California energy crisis”.

These issues aside, Desmond is confident that the investments made into solar energy in the US market will provide more benefits than costs for local rate-payers in the long run: “When it’s complete next year, Ivanpah will produce three-hundred and seventy-seven megawatts of clean, reliable electricity, powering more than one-hundred-forty-thousand homes. Located in Ivanpah Dry Lake, California, the three-unit power system is being built on thirty-five hundred acres of Federal land and has created more than twenty-one-hundred jobs for construction workers and support staff”.

“That’s worth repeating: twenty-one-hundred skilled, high-paying, family wage jobs - where the majority of the project components are procured domestically from a supply chain across 17 states”.

“Over its project life, Ivanpah will generate more than four-hundred-million dollars in state and Federal tax revenues. Total employee earnings are estimated at $650 million. Consider, too, that those benefits flow back into the local economy. That’s a great example of investing in domestic energy and job security”.

Despite associations of increased costs, BrightSource is adamant that the technology will be at the cutting edge with “air-cooling to minimize our water consumption by more than ninety percent when compared to other technologies… As we move forward, we’re adding thermal energy storage to our projects. Storage fundamentally transforms a variable resource into a flexible, dispatchable generator, producing electricity cost competitively after the sun goes down, increasing plant utilization and improving reliability”. CSP Today has confirmed that two BrightSource projects in the early stage of planning, Siberia and Sonoran West, due to reach operation by 2016 and 2017, will use molten salt storage.

But where does the money come from? BrightSource’s Ivanpah project is the recipient of a $1.63 billion Department of Energy loan guarantee, backed by twenty- and twenty-five year contracts with P G & E and Southern California Edison. In addition, in summer 2012 the Senate Finance Committee agreed upon a one year extension programme whereby it would extend the Production Tax Credit in order to

• [Allow] a project to “commence construction” by the end of 2013 in order to qualify for the credit

• [Allow] the PTC technologies to opt into the Investment Tax Credit and claim a full credit

Ivanpah should benefit from both. But is this fair? Desmond believes so: “We think this is smart policy and it will help drive more private sector investment and job creation. This is a good thing. And it’s a good thing that ought to be applied across the entire renewable energy portfolio. Policy should provide a level playing field rather than picking winners and losers”. After all, “Under the same loan guarantee program, the DOE has made two conditional commitments totaling $10.3 billion for nuclear plants. Consider, too, that loans paid back with interest are also an investment”.

In Desmond’s opinion, there is no reason why renewable and non-renewable energies should be pitted against each other as they vie for financial support. Rather, “It’s exciting to see how renewable and traditional resources can work together”. BrightSource has already expanded its portfolio into enhanced oil recovery (EOR) and is aiming towards increased hybridisation projects.

Asides from collaborative endeavours between energy sources, Desmond links back to his main argument that renewable energy, and CSP specifically, needs time to mature.  “Government policies — including federal R&D funding, public private demonstration initiatives, and production incentives for maturing, pre-competitive energy technologies — played a role in advancing some of the key energy innovations required to unlock U.S. shale gas reserves. Here, support over time in concert with significant private sector investment has led to a complete market shift that today is contributing to a dramatic increase in American energy security. In much the same way, policies that support renewable technologies like ours will pay off in the future”.