Abengoa asks for an extra year to start construction on Palen solar project

Due to an ownership change and the need to add an energy storage component to the project, Palen SEGS I LLC on Aug. 4 asked the California Energy Commission for a one-year delay, from Dec. 15, 2015, to Dec. 15, 2016, to start construction on the Palen Solar Power Project (PSPP).

The commission approval for the PSPP was adopted in December 2010, with a deadline for commencement of construction of Dec. 15, 2015.

The company noted in the Aug. 4 request that the upstream owner of Palen SEGS I has changed. All ownership interest in Palen SEGS I is now fully held by Abengoa SP Holdings LLC, through its wholly owned direct subsidiary Palen Solar Holdings LLC. Abengoa SP Holdings is a wholly-owned direct subsidiary of Abengoa Solar LLC.

The company said that good cause supports commission approval of a short, one-year extension of the deadline for commencement of construction of the PSPP. It added: “Previous owners and the Project Owner have acted diligently in seeking the development and construction of the PSPP. The PSPP, which was jointly developed by Solar Millennium, LLC and Chevron Energy Solutions, was approved by the Commission on December 15, 2010. On December 21, 2011, Solar Millennium AG, the parent company of the original project owner, filed for the opening of insolvency proceedings in Germany, despite being ‘in a very advanced state of negotiations on the sale of its US pipeline.’ On April 2, 2012, Solar Millennium petitioned for relief in federal bankruptcy court. The PSPP was acquired on June 21, 2012 by Brightsource Energy, Inc. (‘BSE’). Shortly thereafter, a wholly owned, indirect subsidiary of BSE petitioned for Commission approval of a change in ownership of PSPP. The Commission approved the transfer of ownership on July 11, 2012.

“After the transfer of ownership of the PSPP to Palen SEGS I, LLC was approved by the Commission, Brightsource Energy, Inc. and Caithness Energy, LLC formed a joint venture. On December 17, 2012, these entities submitted a proposed amendment to the PSPP that would change the use of solar parabolic trough technology to a solar power tower technology.

“Caithness subsequently ceased to be a member of the joint venture, and on March 7, 2013, Abengoa entered into a joint venture with BSE for the permitting and development of the PSPP.

“The Commission reviewed the amendment petition over the course of almost a year, culminating in the release of the Presiding Members’ Proposed Decision (‘PMPD’) in December 2013. Further evidentiary hearings were held in July 2014, and a Revised Presiding Member’s Proposed Decision (‘Revised PMPD’) was issued on September 15, 2014.

“Throughout this period, each project owner has worked diligently and actively to develop and move the PSPP forward to construction. Such development efforts included the reduction of the project footprint, evaluation of a single power tower, and consideration of a second phase of a power tower project that would incorporate thermal energy storage.

“However, due to the bankruptcy of a prior owner and the efforts of the subsequent owners to amend the project to better address concerns identified by the Commission’s staff and other stakeholders, the Project was unable to proceed along the original construction timeline. The effort to address such concerns continues, and the Project Owner anticipates submitting a proposed amendment to the license in the near future that will address the issues and policy considerations discussed in the Revised PMPD. Therefore, the Project Owner is requesting a brief, one-year extension of the deadline for commencement of construction to allow consideration of the project improvements it intends to propose.

“Since acquiring upstream ownership of the project entity, Abengoa has diligently worked to develop the PSPP, particularly to incorporate the use of thermal energy storage, and requires only a brief extension of the construction deadline to move this project forward. Given that factors outside of the Project Owner’s control prevented successful commencement of construction, this factor supports granting of the requested extension.

“As recognized in the amendment proceedings, projects that integrate thermal storage with renewable energy generating technologies have significant benefits to California. Such benefits include ‘shifting generation to periods of higher demand more cost effectively’, and extension of time during which renewable power can be delivered to the grid. The Project Owner is working on project improvements to achieve these benefits; however, filing and processing of an amendment to effectuate these improvements make it unlikely that construction will commence by the December 15th deadline.”

The project was originally two 250-MW units using solar trough technology. The December 2012 amendment application proposed to change that to two 250-MW units using BrightSource technology. The BrightSource technology uses heliostats—elevated mirrors guided by a tracking system mounted on a pylon—to focus the sun’s rays on a solar receiver steam generator located atop a solar tower near the center of each solar field to create steam.

In that September 2014 Revised Presiding Member’s Proposed Decision, it was recommended that only one of the 250-MW units be approved.

The project site is about 10 miles east of Desert Center, along Interstate 10 approximately halfway between the cities of Indio and Blythe, in Riverside County, California. The project would interconnect to the grid at Southern California Edison’s Red Bluff Substation.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.