Balancing Policy Objectives with Bureaucratic Timelines

CSP Today's Weekly Intelligence Brief

A majority of the industry updates covered in the weekly CSP Today Intelligence Brief emphasize a common theme: timing.

The single largest stumbling block in the language of the ARRA renewable energy stimulus funding is the requirement that construction begin no later than September 30, 2011. Most large renewable energy projects require 3-5 year lead times from formation of the business model to breaking ground, particularly large projects requiring NEPA reviews and complex permitting procedures. BrightSource Energy, a much-lauded Israeli start-up funded in part by the omnipresent Google.org, has been dragging its 440 MW Ivanpah solar CSP tower project along for over 2 years now, and is still battling regulators and lawmakers.

The Oakland, California-based company has submitted a revised plan to the California Energy Commission (CEC) and   the Department of Interior’s Bureau of Land Management (BLM) that would reduce the project’s footprint of the overall Ivanpah project by about 12%.

With the proposed alternative design, BrightSource is trying to avoid the habitat of rare plants and other species. The company mentioned that the alternative design would reduce expected desert tortoise relocations by around 15%.

BrightSource is reportedly in the running for a Department of Energy loan guarantee and must begin construction close to their planned start date of late 2010 in order to qualify.

Another news item featuring the partnership of American company Fluor with Spanish Elecnor to provide engineering services on a 50 MW CSP plant in Badajoz, Spain mentions that services on that project began in 2009 and the engineering phase is not scheduled to be complete until 2011. The global financial freeze left many projects dead in the tracks for months now going on years, and the liquid capital required to bring projects far enough along for short or long term financing is scarce.

Granted, the point of ARRA is to help finance shovel-ready projects to get job creation jump started immediately. The Department of Energy also stated on the record at RETECH 2010 that any remaining funds after the current solicitation is closed will likely be rolled into a second solicitation.

The issue with this promise is that banks have been leery of the regulatory uncertainty surrounding renewables for a long time. Because of its highly politicized nature, incentives and programs are at the mercy of changes in the legislature and presidential administrations. Continuity has come to carry a high premium and the uncertainty leads to stagnation. When nations have implemented long-term energy programs that have been allowed to run their course, entire industries have blossomed and economies have grown. 

Today's American politics of  one-upsmanship and strictly polarized debates, the constant tug of war for power, are neglecting the very thing they claim to cherish. It is very difficult for a nation to flourish in spite of its leaders' worst efforts.