By Jason Deign

Only a few months ago, it all looked so promising. In July 2010, Stirling Energy Systems (SES), a division of Irish renewable energy conglomerate NTR, picked up the CSP Today Best Commercialized Technological Innovation Award for its SunCatcher dish Stirling technology.

The concept had earned its stripes at the 1.5 MW Maricopa plant in Arizona, built by another NTR business, Tessera Solar, and was lined up for the developer’s next two projects: Calico, scheduled to deliver 850 MW, and Imperial Valley, with 709 MW.

Neither will now be completed by Tessera Solar. In December the Calico Solar Project was sold to K Road Power, which subsequently announced it would switch the development to PV, and AES Solar, another PV developer, bought Imperial Valley last month. So what went wrong?

The official line is that Tessera Solar and SES had a run of bad luck with the markets.

“Due to uncertain capital market conditions in recent months, SES was not in a position to secure additional equity financing to enable the company to continue deploying the SunCatcher technology in the originally planned timeframe,” says company spokeswoman Janette Coates.

“Since Calico and Imperial Valley were permitted in late 2010, and obligations in the near-term existed to continue their development, they were acquired by companies that could keep the projects moving forward to deliver jobs and renewable energy to California in the short term.”

Critical misjudgements

However, it is also not inconceivable Tessera Solar may have made a couple of critical misjudgements.

In December, for example, Imperial Valley was issued an injunction at the request of the Quechan Indian tribe, which had sued the US Department of the Interior and Bureau of Land Management for insufficient consultation during the permitting process.

The action, accompanied by protests from environmental groups, raises questions over Tessera Solar’s choice of location for the project.

Although Tessera Solar claims to have done its homework on the matter, dedicating three years and USD$20 million to the permitting process, it is also true the company must have been aware its project location could be a sensitive issue.

A State of California Resources Agency memo seen by CSP Today says: “The Energy Commission staff believes the direct project impacts to biological resource, and soil and water resources, and visual resources … for the Imperial Valley Solar Project will be significant.

“In addition, staff has concluded that the project will not be able to comply with Imperial County several laws, ordinances, regulations and standards.”

Overriding considerations

Despite these misgivings, the memo goes on to endorse the project “based on a finding of overriding considerations” because it would “provide critical environmental benefits by helping the state reduce its greenhouse gas emissions.”

Coates is keen not to make too much of the site challenges. “Several projects have been impacted by local, state and federal lawsuits in California, from both Native American and environmental groups,” she says.

“This is not just specific to the Calico Solar and Imperial Valley Solar Projects. For the Imperial Valley Solar Project, an injunction was granted by a judge, thus this was more heavily covered in the media, and the litigation on the project is pending.”

However, Ted Sullivan, senior analyst at Lux Research, believes there is a lesson here for other developers. “Try to build on private land,” he says. “Land use here in the US is increasingly coming under fire from Indian and environmental groups.”

And then there is the matter of the technology. In its memo, the Resources Agency of California says: “Due to a lack of information regarding the long-term performance of this new technology, it is uncertain whether the applicant’s claims regarding reliability will be met.”

PV competition

This may have been a factor in SES’s failure to attract funding.

Bloomberg New Energy Finance solar energy analyst Jenny Chase says: “Dish Stirling is just one of the technologies that is trying to get bankability, and like lots of technologies that haven’t been deployed to scale, it’s pretty difficult to get an idea of how well it works.

“The good thing for dishes is you can deploy them on a small scale but dish Stirling doesn’t have advantages to do with thermal inertia. It’s more in competition with PV, which is getting cheaper and is perfectly bankable. Right now it’s a difficult time to be in competition with PV.”

The fact that Calico and Imperial Valley are now both being developed as PV sites would seem to lend some weight to this argument. But even that might not be the full story.

One industry figure, who spoke to CSP Today on condition of anonymity, implied the problems and SES and Tessera may have stemmed from an existing investor deciding to bail out because of concerns over the technology.

“What caused the fall was a shareholder unloading their holdings at below-market price,” he asserts. If so, it does not bode well for dish Stirling.

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Jason Deign: jdeign@csptoday.com

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