Surveys show that a majority of Americans want cleaner energy from renewable sources. So, SolarReserve’s Crescent Dunes solar plant could have been a great success.
Located in the desert between Las Vegas and Reno, the plant is made up of ten thousand mirrors that form a spiral almost two miles wide that winds around a skyscraper.
Enough heat is soaked up from these mirrors to spin steam turbines which then store energy in molten salt.
This is what happened with this $1 billion project that in 2011 looked like it was going to be the future of what renewable power could be:
Investors Put Up $140 Million
Financiers including Citigroup Inc. invested $140 million in this promising project, along with the company that developed Crescent Dunes, SolarReserve Inc.
The U.S. Energy Department Backed It with Loan Guarantees
In addition to the faith that the investors put into this project, the Obama Energy Department offered government loan guarantees, with the government also securing the right for the project to be built on public land.
Crescent Dunes Could Not Keep Up with Technological Advances and was Already Obsolete
In the time between when Crescent Dunes was started up in 2011 and when it opened in 2015, the solar industry had been very successful in advancing its technology.
The steam generators at Crescent Dunes required dozens of staff to run them and keep them properly maintained, and the maintenance required custom parts.
Solar panels had become cheaper and more efficient, outstripping Crescent Dunes’ technology. The latest panels produced power at a fraction of the cost, needing only a hosing-down for maintenance.
BloombergNEF Contrasts Deliverables
BloombergNEF researches fossil fuel alternatives, and revealed just how much Crescent Dunes failed to deliver. Its technology was supposed to generate enough power to supply a city of about 100,000, but it didn’t come close to fulfilling this deliverable.
Its power cost Nevada about $135 per megawatt hour, compared to less than $30 per megawatt hour provided by a new Nevada photovoltaic solar farm.
Crescent Dunes Had More to Worry About Than Technology
SolarReserve is in litigation with Crescent Dunes over what SolarReserve has called mismanagement. Crescent Dunes also lost its only customer, NV Energy Inc. over what NV Energy called lack of reliability.
Thanks to the government loan guarantees, the taxpayers are on the hook for $737 million.
Losses Are Part of Developing New Technology
The Energy Department has estimated that losses such as Crescent Dunes account for only 2.9% of its $28 billion loan guarantees to renewable energy sources. They have also funded projects like huge farms of thin-film solar cells that are very successful.
There may be a recoup of some of the losses if a buyer tried to bring Crescent Dunes back on line, or even if it was sold for parts.
If the American people want a carbon-neutral future, then they have to understand that it takes investment to fund research that will take technology to the next level, and that level is not known – for now.
