Solana Solar Plant's Poor Performance Gets Worse After Damage from July Microburst | Phoenix New Times
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Solana Solar Plant's Poor Performance Gets Worse After July Microburst Damage

The Solana Generating Station — the large concentrated-solar plant near Gila Bend — was knocked out by a microburst for a few days in late July and won't generate power normally for months, a new report reveals. The severe problem comes on top of generally poor performance from the $2...
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The Solana Generating Station — the large concentrated-solar plant near Gila Bend — was knocked out by a microburst for a few days in late July and won't generate power normally for months, a new report reveals.

The severe problem comes on top of generally poor performance from the $2 billion project over the past two years. As New Times reported in November 2014, in its first year the plant produced only about two-thirds of the power that its former owner, Spain's Abengoa Solar, said it would. The company and Arizona Public Service, which is contracted to buy the electricity the plant generates, said at the time that performance would improve.

Publicly available production figures reviewed by New Times this week showed that Solana did generate more electricity in its second year but is still well below its advertised potential. The plant also did worse in the second quarter of 2016 than it did in the same period in 2015, the numbers show. And considering the new report on the July microburst, the plant's third-quarter results for this year — which haven't been released yet — are likely to be abysmal.

All of this could put taxpayers at risk.

The plant is owned by Arizona Solar One LLC, which itself is owned by Atlantica Yield, a publicly held company and subsidiary of the plant's original owner, Abengoa. The subsidiary was called Abengoa Yield until January, when it changed its name in the wake of news reports of Abengoa's financial troubles. The Spanish company was touted by President Obama and solar-energy advocates when it announced plans in 2010 to build Solana and the Mojave Solar Project 85 miles northeast of Los Angeles in California.

Solana was built with hundreds of millions in taxpayer subsidies and $1.45 billion in loan guarantees to Abengoa. As a New York Times story explained this past March: "Abengoa says that nearly $1 billion of the federally guaranteed loans has been repaid. American taxpayers, it says, will incur no costs for the projects as long as they continue operating normally."

But the Solana plant has rarely operated normally since opening in late 2013.

APS referred questions about the plant's performance to Atlantica Yield, but the company's representatives didn't return messages.

Solana's solar field contains about 900,000 parabolic mirrors covering three square miles, using a technology much different from the photovoltaic panels seen on many rooftops in metro Phoenix. To generate electricity, Solana's mirrors collect sunlight and focus it on tubes that contain a molten material, which heats up to more than 530 degrees Fahrenheit. The hot liquid is then pumped to two steam turbines that can put out a combined maximum 280 megawatts. About 30 megawatts of the electricity generated is needed to run the plant.

Abengoa told the government and public that over the course of a year, Solana would generate more than 944,000 megawatt hours. One megawatt is equal to 1 million watts — in other words, it's the power needed to turn on 10,000 100-watt light bulbs.

The company estimated the plant would save nearly a half-million tons of carbon dioxide from entering the atmosphere by providing power equivalent to that used by 70,000 homes. A key beneficial feature of concentrated-solar plants like Solana is the ability to use the heated solution to power the turbines and provide electricity for several hours after sunset.

In its first year of full operation, from July 2014 to June 30, 2015, Solana generated only about 600,000 megawatt hours. APS and Abengoa officials claimed they anticipated problems in the plant's first year, and that it had been plagued by small problems including leaks, a small fire, and heavier-than-normal cloud cover.

Federal reports available for Arizona Solar One LLC show that in the equivalent timeframe from July 2015 to June of this year, the plant generated 723,183 megawatt hours — an improvement, to be sure, but well shy of 944,000 megawatt hours.

Another sign of weakness: Solana's performance was worse this spring than last spring. The plant generated 261,456 megawatt hours from April to June of 2015, but only 234,602 from April to June this year. El Niño-related cloudy weather may be responsible for the decline. But bad weather definitely caused the latest problem at Solana, U.S. Securities and Exchange Commission filings show.

"On July 29, 2016, Solana was affected by a weather phenomena called micro-burst during the storms Arizona suffered over that weekend," states Atlantica Yield's 6-K form filed on August 5. "Part of the solar field suffered damages. The plant was brought back on line on August 2. Our expectation is that for some months the solar field availability will not be complete. We expect the existing insurance policy to cover damages and loss of production beyond customary deductibles."

New Times observed  that many of the mirrors were pointing at the ground last month, though it's unclear whether that was related to the microburst problem.

Investigations of Solana by the U.S. Immigration and Customs Enforcement bureau and Department of Labor began in 2013, as the Arizona Republic reported two years ago, and are apparently ongoing. The feds haven't yet said what the probes found or details about what's being investigated.

According to SEC filings, Abengoa currently owns 41 percent of Atlantica Yield. However, nearly all of Abengoa's holdings in the company are pledged as collateral for loans.

In August, Abengoa announced that it had made a deal with creditors that would allow it to avoid what would have been Spain's largest bankruptcy ever. Two American companies pledged $1.3 million in new capital.

UPDATE: The day after this story was published, the Maricopa County Air Quality Department announced a $1.5 million fine against Arizona Solar One LLC for air-quality violations at the Solana plant.
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