Blythe solar project owner bankrupt

Wednesday, April 4, 2012

Solar energy project developer Solar Trust of America filed for bankruptcy this Monday, delivering a setback to what would be the largest solar energy project in the U.S.: the proposed 1,000 megawatt Blythe solar project under construction in the California desert.

Last April, I noted that the U.S. Department of Energy offered a conditional loan guarantee commitment to Solar Trust of America, a joint venture of German companies Solar Millennium AG and Ferrostaal Inc., for its solar energy project outside the city of Blythe, California, near the Arizona border.  DOE's conditional loan guarantee was offered to help finance the first two units at Blythe, which were originally planned to use parabolic trough mirrors to concentrate solar energy to boil water in a closed loop.  The resulting steam would spin turbine-generator sets to generate electricity. 

In August 2011, as photovoltaic cell prices fell, project partner Solar Millenium announced plans to convert the first 500 MW phase of the Blythe project to solar photovoltaics.  Photovoltaic technology appeared lower cost and more proven than the relatively complex solar thermal steam turbine generation originally conceived of for the project.  However, this shift in project design meant that the Blythe project could no longer take advantage of the federal loan guarantee.

Now, Solar Trust of America has filed for bankruptcy.  In its Chapter 11 filing, Solar Trust notes that its operations relied on funding from parent Solar Millenium - which filed for bankruptcy in December 2011, cutting off operating funds to Solar Trust.  Likewise, negotiations to sell the company and its projects failed when the prospective buyer, German firm solarhybrid, also went bankrupt.

What does the future hold for the Blythe project?  Along with the nearby Palen project (a two-phase, 500 MW solar thermal development, the Blythe project is Solar Trust's largest asset.  Whether Solar Trust or some successor picks up the pieces and moves forward remains to be seen, but presumably the investment to date in the Blythe project still retains significant value. 

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