“I met a traveler from an antique land,
-“Ozymandius,” by Percy Bysshe Shelley
Who said—“Two vast and trunkless legs of stone
Stand in the desert… Near them, on the sand,
Half sunk a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal, these words appear:
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away.”
Towering 450 feet above the California desertscape, the Ivanpah Solar Electric Generating Facility was once, not so long ago, a monument to man’s ingenuity.
When it was dedicated in 2014 (a ceremonious occasion attended by a whos-who list that included the active Energy Secretary), the 392-megawatt (MW) Mojave Desert project was the world’s largest concentrated solar power (CSP) facility, nearly doubling the amount of solar thermal energy produced in the United States. A $1.6 billion Department of Energy-financed darling, Ivanpah Solar was among the first projects of its ilk to provide electricity to U.S. utility customers, opening a door that has since been kicked down.
And it may soon be a husk of its former self.
Operator NRG Energy plans to shut down two-thirds of the Ivanpah Solar CSP plant after Pacific Gas and Electric (PG&E) decided to terminate two power purchase agreements (PPAs) with the facility to save ratepayers money.
Too pricey from the start?
In 2009, PG&E contracted about 250 MW from Ivanpah units 1 and 3, signing 30-year PPAs with BrightSource Energy that were supposed to run through 2039. The financial terms of the agreements were redacted in the utility’s public filing and are considered confidential, but the California Public Utilities Commission (CPUC) clearly thought PG&E was getting a decent enough deal at the time, signing off on the PPAs despite the fact that they had to be significantly adjusted to “accommodate significant changes to the project.”
PG&E asserted in its filing with the CPUC that the amended Ivanpah PPAs were still comparable to other procurement options it received in its 2009 RPS solicitation and even brought in an independent evaluator (IE) to review the altered deals.
“While the IE was unable to validate all the cost inputs and assumptions for the projects, the IE concluded that the amended PPAs appear reasonable in light of the modifications that were necessary to facilitate permitting and financing. The IE also concluded that the all-in costs of the amended Ivanpah PPAs are reasonable when compared to other RPS procurement opportunities including PG&E’s most recently conducted RPS solicitation,” reads part of PG&E’s filing, confirming the utility’s assertions.
In 2021, the CPUC instructed California’s investor-owned utilities to begin a multi-year process of evaluating their energy supply portfolios. Then in 2023, Ivanpah’s current owner, Solar Partners, offered PG&E the opportunity to terminate the Ivanpah Solar power purchase agreements.
Ultimately, PG&E determined nixing the deals would save its customers money compared to keeping them through their original terms.
The PPAs simply didn’t stand the test of time. Ivanpah Solar was built in an era when developers were investing in all sorts of clean energy projects in a “creative destruction” sort of mindset to figure out what worked and what didn’t. The goal was to find efficient and affordable technologies to reduce the need for greenhouse gas-emitting fossil fuels, and it was obvious from the start that not all technologies would prove equally cost-effective.
“It was really all hands on deck,” recalled PG&E senior director of commercial procurement Don Howerton. “The climate crisis was becoming clear. The Southwest United States had been in a megadrought for more than a decade. Heat waves had intensified. Wildfires had grown in number and size.”
In an effort to comply with California’s Renewables Portfolio Standard, PG&E became a big buyer of carbon-free energy. The utility invested in and contracted for clean generation of all ilks- including solar photovoltaic, hydroelectricity, wind, biomass, and geothermal. The utility figured that adding concentrated solar power would diversify PG&E’s energy portfolio while supporting new technologies. The tech had proven to work on a smaller scale in Europe and various private companies were investing in large-scale U.S. endeavors at the time.
But in the end, solar PV won the war. Solar’s affordability is simply unmatched, and PG&E would rather admit that now than answer for charging ratepayers an unfair sum through 2039.
“It’s so important to support investment in different projects as we look to solve climate challenges,” PG&E’s Howerton added. “It’s not clear in the early stages what technologies will work best and be most affordable for customers. Solar photovoltaic panels and battery energy storage were once unaffordable at large scale. Today, after years of sustained investment and improvement, those technologies provide thousands of megawatt hours of clean electricity for PG&E customers.”
Next steps
If the move is approved by the California Public Utilities Commission (CPUC), PG&E will stop receiving power from the plant in 2026. Unit 1 and Unit 3 of Ivanpah will cease operations in response and NRG will begin decommissioning the units. Unit 2 has a PPA with another major California utility, Southern California Edison, and is expected to remain in service.
NRG says affected employees will be able to transfer to other open positions within the company.
PG&E says this decision will not affect its compliance with California’s renewables mandates, insisting it continues to meet its state obligations and is on track to continue to meet more aggressive renewables mandates.
“In the coming years, we expect an even more efficient and affordable market for clean energy,” Howerton said. “We’re proud of our investments in renewables. We look forward to continuing to support technologies that benefit our customers through lower costs and a cleaner environment.”
