Abengoa, the Spanish company that built the expansive $2 billion concentrated solar plant near Gila Bend, is broke and headed toward a possible bankruptcy filing.
It's the latest solar scandal for the Obama administration, which picked Abengoa for billions in lucrative loan guarantees. This week, Abengoa filed in Spain for protection against its creditors, which is the first step toward a possible bankruptcy filing.
Media reports say bankruptcy should come within four months if Abengoa can't pay its bills in a debt-restructuring move. If the firm goes bankrupt, taxpayers may be on the hook for loans that won't be paid, and the company's assets would be sold off.
It would be the biggest bankruptcy in Spain's history.
The company has several renewable-energy divisions, including its much-touted Abengoa Solar. Concentrated solar plants like the many-mirrored Solana project near Gila Bend are expensive and use a lot of land but have the advantage of providing clean, solar-generated electricity for several hours after sunset. Yet the Solana plant has been plagued with problems from the beginning.
The plant opened late amid allegations of stiffing subcontractors, immigration fraud, and other problems. A federal investigation into the company remains ongoing.
As New Times first reported, the plant's electricity generation has been underwhelming since it opened. It produced only two-thirds of expected capacity in its first year of operation and only half its expected output for the first three months of this year. Officials with Abengoa and Arizona Public Service told New Times that generation would improve over time.
The Abengoa plant is similar to the Ivanpah CSP in California, built by Bechtel, which also has been severely under-performing.
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If Abengoa does go bankrupt, local electric customers shouldn't feel any pain directly. APS is contracted to buy power from Solana as its produced, but the local utility isn't linked to the investment, APS spokeswoman Jenna Shaver says. Abengoa also owns only 47 percent of the plant at this point, the rest financed by investors of Abengoa Yield.
Indirectly, though, Abengoa's financial problems are a cloud over the solar industry in Arizona and elsewhere.
Correction: Ivanpah plant was built by Bechtel, as noted now in article.