Obama's Latest Solar Scandal: Parent of Arizona's $2 Billion Solana Plant Is Broke

Keep New Times Free
I Support
  • Local
  • Community
  • Journalism
  • logo

Support the independent voice of Phoenix and help keep the future of New Times free.

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.

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.

Keep Phoenix New Times Free... Since we started Phoenix New Times, it has been defined as the free, independent voice of Phoenix, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Phoenix with no paywalls.

We use cookies to collect and analyze information on site performance and usage, and to enhance and customize content and advertisements. By clicking 'X' or continuing to use the site, you agree to allow cookies to be placed. To find out more, visit our cookies policy and our privacy policy.


Join the New Times community and help support independent local journalism in Phoenix.


Join the New Times community and help support independent local journalism in Phoenix.