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US Taxpayer Backed California Valley Solar Ranch Now at Full Power

November 3, 2013
California Valley Solar Ranch

California Valley Solar Ranch

The huge California Valley Solar Ranch (CVSR) is apparently now at “full power” thanks to a loan guarantee from the US taxpayers of $1,237,000,000. Please refer to the following articles and published information from the Department of Energy:

CVSR DOE Information

CVSR DOE Information

Realistic Appraisal & Comparison:

The 250 MW Solar Ranch required a $1.237 billion loan guarantee. It is not clear to me if this the entire investment or if additional money was required; however, by itself this is equates to $4.95 per Watt.

The Solar Ranch is projected to produce 482,000 MWh per year, implying an operating capacity factor of around 22%.  Why is there such a disparity in the published figures for how many homes this amount of energy can support?  The DOE says 42,700 homes, other published media reports claim as many as 100,000 homes.

Given the value of 482,000 MWh per year, I do not see how it is possible that this return will be able to pay  back the $1,237,000,000 investment within the life of the solar panels; even when ignoring annual O&M costs.  Please refer to the simple CVSR Cash Flow attached.

The Solar Ranch covers 1500 acres.

It is said that the CVSR project injected $315 million into the local economy during the construction phase.  What happened to the other $922 million?

A natural gas combined cycle gas turbine (CCGT) facility capable of 250 MW could have been built for one fourth the cost, would be capable of making four times the electricity per year, and would fit on about 1 acre.  Assuming complete & total displacement of coal generation (something which the CCGT really can do and the Solar Ranch really cannot) the reduction in annual CO2 emissions provided by a 250 MW CCGT facility would be about two times more than the Solar Ranch.  Also, a CCGT facility could have been located closer to the point(s) of actual use, and could provide dispatchable energy which could be increased or decreased as demand fluctuates; something the solar facility is incapable of providing.  (See update)

This does not mean that natural gas and CCGT are an energy panacea; there are issues associated with any form of energy generation; but when we talk about spending $1,237,000,000 it would seem we would at least also talk about other alternatives that might get us to a better solution, and support a viable energy strategy.

UPDATE 11/3/2013

This about CVSR just in from the New York Times (actually from 2011):

“The project is also a marvel in another, less obvious way: Taxpayers and ratepayers are providing subsidies worth almost as much as the entire $1.6 billion cost of the project. Similar subsidy packages have been given to 15 other solar- and wind-power electric plants since 2009.

The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come. The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG — even Google.”

So the cost is really $1,600,000,000.  Please see Updated CVSR Cash Flow attached.

This makes the loss even more dismal and takes the installation cost to $6.40 per Watt.

I especially like the part about requiring electric customers to pay higher rates and providing the large investors like Goldman Sachs, Morgan Stanley, GE, Exelon, NRG, and Google large guaranteed profits.


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