Utility cancels contract for Tessera’s Calico solar project
NTR’s Tessera Solar has suffered a major setback with the loss of a 663.5-megawatt power purchase agreement with utility Southern California Edison for its Calico solar power plant project.
The abrupt cancellation of the five-year-old contract comes just eight weeks after California and federal officials approved Calico, which they put on a fast track so Tessera could qualify for lucrative government incentives for large-scale renewable energy projects.
Neither the utility nor Tessera would comment on the reasons for scrapping the 20-year power purchase agreement, citing confidentiality provisions. Signed in August 2005, it was one of the largest contracts for electricity to be generated by a single solar thermal power plant.
Southern California Edison notified the California Public Utilities Commission in a regulatory filing on Thursday that it had terminated the power purchase agreement, or PPA, with Tessera.
“Calico Solar is a fully permitted facility, has an interconnection agreement for 850 MW, and is pursuing alternative PPAs to assure its position as a key component of California’s renewable energy future,” Janette Coates, a Tessera spokeswoman, said in an e-mail.
Tessera, however, has yet to arrange financing to build Calico in the Mojave Desert east of Los Angeles or its approved 709-megawatt Imperial Valley Solar Project near the Mexican border. The company has estimated it would cost around $4.6 billion to build the two projects, which would deploy 54,900 large solar dishes on 10,000 acres of government-owned desert land.
The solar dishes, called SunCatchers, are 40-feet tall and 38-feet wide and resemble large mirrored satellite receivers. The mirrors focus the sun on a Stirling engine filled with hydrogen gas that expands as it is heated, driving pistons to generate electricity. The technology has been proven in pilot projects but never tried on a large scale.
Citing sources with knowledge of the two projects, Reuters reported last week that potential buyers, including First Solar, have approached Tessera about acquiring the Calico and Imperial Valley licenses. It’s almost certain that any buyer would replace Tessera’s technology with other solar thermal systems or photovoltaic panels.
Tessera declined to comment on what it called speculation.
A buyer would face the prospect of further environmental review if it wanted to deploy a new technology that would have different impacts on the sites’ landscape and wildlife.
Both projects come with obstacles to overcome. The Quechan Native American tribe has sued the United States Interior Department over its approval of the Imperial Valley power plant. The tribe recently won a temporarily injunction blocking construction until a judge can hear its claims that the government failed to adequately consult with the Quechan over the project’s impact on their ancestral lands.
Environmental and union groups, meanwhile, have said they are considering suing the California Energy Commission over the harm they say the Calico project will do to protected wildlife.