A rendering of BrightSource Energy's solar tower technology

By Jenny Muirhead

After a number of setbacks it looked like the developers were finally on track. However, on 26 September 2014 Palen Solar Holdings (which consists of BrightSource Energy and Abengoa Solar) formally withdrew their petition to convert the project from parabolic trough to tower.

CSP Today takes a look at the various hurdles that faced Palen Solar Holdings and what the withdrawal means for the declining project pipeline for CSP in the USA.

Some background:
On 27 June 2012 BrightSource Energy’s purchase of the 500 MW Palen parabolic trough project from a bankrupt Solar Trust of America (a joint venture of Solar Millennium and German giant Ferrostaal) was approved. The developer then began what would be a twenty seven month saga, petitioning the California Energy Commission to allow the permit for Palen Solar to be converted from parabolic trough to tower. The Palen project was planned to consist of two towers – each boasting 250 MW.

Bringing in Spanish re-enforcements
Nine months after the purchase of Palen, BrightSource Energy announced plans to jointly develop the project with Spain’s Abengoa Solar. Abengoa, which has an impressive operational project portfolio of well over 1 GW of CSP, would have undertaken the Engineering, Procurement and Construction (EPC) and the operation and maintenance (O&M) of the plant once online.

A fight against time
From the moment Palen changed hands in 2012, BrightSource Energy was in a race to ensure that the project connected to the grid by December 2016 in order to benefit from the 30% Investment Tax Credit (ITC). Without this, securing financing for the project in the current economic climate would be an extremely difficult task.

With an expected construction period of at least 28 months, the developers would have needed to commence construction already if they hoped to meet the closing deadline.

There was, of course, the potential that the ITC would be extended, but with few concrete developments, relying on an ITC extension did not seem like a reliable option.

In a recent statement, BrightSource senior Vice President Joe Desmond commented that part of the reason the developers decided to withdraw the project was the unlikelihood of achieving grid synchronisation by December 2016.

An on-going battle
In addition to the tight time restraints, BrightSource Energy was also faced with a number of environmental petitions that were slowing down the project’s approval process to convert from parabolic trough to tower. Indeed, the developer had also faced criticism for its 392 MW Ivanpah tower project for a number of factors ranging from the glare created by the heliostats, to avian mortality and damage to flora and fauna. These claims were contested by BrightSource Energy, who used the cases of the Genesis, Desert Sunlight, and ISEGS projects to argue that that the projected avian mortality rates were a lot lower than those forwarded by opponents.

In both the Preliminary Staff Assessment and the Final Staff Assessment for Palen environmental concerns were flagged as needing further clarification.

On 13 December 2013, the California Energy Commission (CEC) presented a Presiding Member's Proposed Decision (PMPD) to deny the project's permit amendment on the grounds of mounting evidence of harm to wildlife. However, this was appealed by Palen Solar Holdings, who on 23 December 2013 filed a Request for Delay in the Schedule asking the California Energy Commission to delay its final decision until spring 2014. A primary purpose of this request is to allow the company to gather additional data relating to potential impacts to avian species.

In a conference held on 7th January 2014 the Presiding Member of the Commission outlined the kind of additional information and project changes that would increase the chances of approval of the Palen projects. These included the possibility to add storage capacity to allow for electricity generation after sundown and the need to work with tribal groups to develop meaningful measures to mitigate the projects’ impact on local sites.

By July 2014, the CEC staff had withdrawn their recommendation to deny a permit for the Palen Solar project. This was in response to the submittal of a revised plan by Palen Solar Holdings on 18 July 2014 which advocated a phased approach to the construction of Unit 1 and Unit 2 (each 250 MW).

On 12 September 2014 the California Energy Commission released a revised Presiding Member's Proposed Decision regarding this project’s conversion from parabolic trough to tower. The PMPD recommended a Reduced Acreage Alternative with a single tower as opposed to two 250 MW towers. Had the project continued in its development it would have taken a further thirty days for public comment, followed by a proposed decision on 6 October 2014 and a presentation to the full Commission on 29 October 2014.

Despite this small victory for Palen Solar Holdings, on 26 September 2014 they decided to withdraw their proposal.

CSP Today was provided with the following statement from BrightSource:

“Palen Solar Holdings LLC (PSH) announced it is reassessing its Petition to Amend the License for the Palen Solar Electric Generating System (PSEGS) before the California Energy Commission.

After carefully reviewing the proposed decision recommending approval of one tower, we determined it would be in the best interest of all parties to bring forward a project that would better meet the needs of the market and energy consumers.

We believe concentrating solar power, and specifically tower technology with thermal energy storage, can play a key role in helping California achieve its clean energy goals by providing the necessary flexibility needed to help maintain grid reliability. In addition, we are committed to bringing projects to the market that follow sound and responsible environmental measures to ensure all impacts are avoided, minimized or compensated for properly.

We appreciate the Energy Commission’s hard work and thorough evaluation of the relevant issues and we look forward to working with them in the future.”

- Joseph Desmond, Senior Vice President, Marketing & Government Affairs BrightSource Energy
 

Where to from here?
Technically speaking, the developers could still go ahead and build a parabolic trough project on the site, a process which was approved under the Solar Trust of America. Taking into consideration that BrightSource Energy is a specialist in tower technology, makes this an extremely unlikely scenario.

An alternative option would be to re-sell the Palen project, although under current market conditions in the USA the future for CSP does not seem all that positive.

Whilst there are still a number of projects under development in the USA (including SolarReserve’s Rice Solar, Cross Roads, Sagauche and Quartzsite Solar Energy Projects) many of these developments will face similar hurdles. Currently, the project pipeline in the USA is looking dire, with very few projects in the planning and development stages.

Source: CSP Today Global Tracker, October 2014.

BrightSource Energy has seen a number of large-scale CSP projects shelved over the last two years, including Rio Mesa, Hidden Hills, Siberia and Sonoran West.

Nevertheless, the US-based developer has a number of CSP plants planned in emerging markets. In addition to its projects in South Africa and Israel, it has bids in Morocco (Noor III) as well as a memorandum of understanding for CSP in China.

It would appear that emerging markets are becoming more and more of a solution for US CSP developers.

Palen – a timeline

27 June 2012
BrightSource Energy purchases Palen site from Solar Trust of America and announces plan to convert technology choice from parabolic trough to tower

15 March 2013
On 15 March 2013 BrightSource announced plans to jointly develop the Palen project with Abengoa.

28 June 2013
The Preliminary Staff Assessment (PSA) released with findings indicating that 9 areas needed further clarification for the Final Staff Assessment.

13 December 2013
On 23 December 2013 Palen Solar Holdings filed a Request for Delay in the Schedule asking the California Energy Commission to delay a final decision on the Palen project until spring 2014.

23 December 2013
On 23rd December 2013 Palen Solar Holdings filed a Request for Delay in the Schedule asking the California Energy Commission to delay until spring 2014 a final decision on the Palen project.
The primary purpose of this request is to allow the company to gather additional data relating to potential impact on avian species. Such data is currently being gathered at the Ivanpah project, as well as sites employing other solar technologies. BrightSource and Abengoa, the consortium promoting the project, are also hoping to provide further information to expand upon the benefits of the project for California.
The Commission decided to grant the request for delay and to extend the deadline to submit comments on the PMPD to a date yet to be determined.
The commission decided to grant the request for delay and to extend the deadline to submit comments on the PMPD to a date to be determined.

7 January 2014
In the conference held on 7 January 2014, the Presiding Member of the Commission outlined the kind of additional information and project changes that would increase the chances of approval of the Palen projects. These included the possibility to add storage capacity to allow for electricity generation after sundown, as well as the need to work with tribal groups to develop meaningful measures to mitigate the projects’ impact on local sites.

21 May 2014
On 21 May 2014 the Californian Energy Commission released a docket granting the application by BrightSource and Abengoa (Palen Solar Holdings) to re-open the evidentiary hearing and set a revised schedule.

28 July 2014
The staff for the California Energy Commission (CEC) released a docket withdrawing its original recommendation to deny the project's permit amendment.

12 September 2014
The California Energy Commission released the Presiding Member's Proposed Decision regarding this project’s conversion from parabolic trough to tower. The PMPD recommends a Reduced Acreage Alternative with a single tower (currently the developers plan to build two 250 MW towers).

26 September 2014

On 26 September 2014 PSH announced they would withdraw their proposal to convert the 500 MW CSP project from parabolic trough to tower.

(Source: CSP Today Global Tracker, October 2014)

For a full list of BrightSource Energy's CSP projects, visit the CSP Today Global Tracker. 
All exhibits regarding the Palen project can be viewed on the CEC’s website.