Technology moves too fast for government
The sole “Nevada question” at the Feb. 19 Democratic presidential candidates debate was posed by moderator Jon Ralston, editor of The Nevada Independent, and dealt with their plans to combat climate change in Las Vegas and Reno.
In response, former Vice President Joe Biden identified the Crescent Dunes Solar Energy Plant as a source of new energy: “When the fourth stage is completed, it will be able to take care of 60,000 homes for every bit of their energy needs.”
Astonishingly, Biden was unaware that Crescent Dunes had already gone bust after receiving a $737 million federal loan guarantee. In fact, this $1 billion solar plant was obsolete before it ever went online.
In 2011, the $1 billion Crescent Dunes project was to be the biggest solar plant of its kind, and it looked like the future of renewable power. In addition to $140 million in private investment, the U.S. Department of Energy offered the developer, SolarReserve Inc., $737 million in government loan guarantees, and Nevada Senator Harry Reid, then the Senate majority leader, cleared the way for the company to build on public land.
The state of Nevada contributed another $119.3 million tax abatements over 20 years.
The Crescent Dunes solar plant looks like something out of a sci-fi movie. Ten thousand mirrors form a spiral almost 2 miles wide that winds around a skyscraper rising above the desert near Tonopah. The operation soaks up enough heat from the sun’s rays to spin steam turbines and store energy in the form of molten salt.
By the time the plant opened in 2015, the increased efficiency of cheap solar panels had already surpassed Crescent Dunes’ technology, and today it’s obsolete. Late last year, Crescent Dunes lost its only customer, NV Energy Inc. The plant has no prospective clients and couldn’t supply energy even if it found a buyer.
The plant’s technology was designed to generate enough power night and day to supply a city the size of Sparks, Nev. (population 100,000), but it never came close. Its power cost NV Energy about $135 per megawatt hour, compared with less than $30 per MWh today at a new Nevada photovoltaic solar farm.
SolarReserve told a federal court in November that “the plant is moribund—neither generating energy or revenue”. The entity running Crescent Dunes is insolvent , with debt of more than $440 million.
The Crescent Dunes failure is reminiscent of another giant taxpayer–funded boongoggle of the Obama administration’s green energy enthusiasm—Solyndra. Then Vice-President Biden touted Solyndra’s Fremont, California solar-panel factory groundbreaking in 2009.
In May, 2010 President Obama visited the plant declaring, “the true engine of economic growth will always be companies like Solyndra.” But despite $535 million in federal loan guarantees, Solyndra declared bankruptcy 16 months later. Solyndra went bust.
Many in the Obama administration had a genuine belief that fossil fuels were dangerous and unsustainable. But when government picks winners, politics usually intercedes. Both government investigators and reporters found, as the Washington Post observed, “Obama’s green technology program was infused with politics at every level…Political considerations were raised repeatedly by company investors, Department of Energy bureaucrats and White House officials.”
The Energy Department’s inspector general reached similar conclusions in their report which took four years to complete.
Promises of a “Green New Deal” are predicated on the belief that government planning and subsidies will make America the world’s green-energy superpower, create millions of jobs, and supercharge the economy.
Scores of new businesses fail, but private investors lose their own money. Government investments turn on politics more than feasibility. There is a long and growing list of failed government alternative energy projects. Hand the energy economy over to the government in the name of climate change, and there will be countless more Crescent Dunes and Solyndra fiascos.
Jim Hartman is an attorney living in Genoa