In “forbearance agreements” recently approved by California regulators, Pacific Gas & Electric has given the owners of the Ivanpah solar power tower plant up to an extra year to reach energy production levels called for in contracts for two of the plant’s three units. Based on how those units have done so far and what will be required down the road, achieving those minimums won’t be easy.
New data from the U.S. Energy Information Administration indicate that for the first 24-month measuring period called for under the PG&E power purchase agreements, Unit 1 fell 61,692 megawatt hours shy of the 425,600 MWh production guarantee apparently set out in the PPAs. The slightly more powerful Unit 3’s production gap was even greater, 103,544 MWh, toward a goal of 469,840 MWh.
That said, in their second full year of operation, which officially ended at the close of January this year, both units performed much better than in their first year, with Unit 1 production up 29 percent and Unit 3 up 34 percent.
Here’s the issue, though: Under the PPAs, the bar rises. This snippet, from a BrightSource Energy filing several years ago, is what we know about the confidential PPAs (Solar Partners II is Unit 1 and Solar Partners VIII is Unit 3):
So instead of hitting 140 percent of “contract quantity” in a 24-month period (or 70 percent per year on average), Solar Partners now apparently needs to ratchet production up to 160 percent (or 80 percent per year on average). California Public Utility Commission documents related to the recently approved forbearance agreements note that this is a rolling 24-month measurement period, so every month from now on, for the life of the 25-year contracts, the units must hit 160 percent of the annual contract quantity for the preceding 24 months.
Those forbearance agreements push that requirement out six months, at least, and more likely for a year — so it’ll be starting next February, then going forward, when this new target will have to be met.
It will require major increases in production.
Take Unit 1. Its 24-month target — that is, the minimum it needs to produce to avoid being in default — come February 2017 will be 486,400 MWh. With 213,126 MWh in the 12 months ended January 31 this year, that means the unit will need to generate 273,274 MWh over the following 12 months – an increase of 28 percent. That’s as big an increase as it had this past year, but off a larger base.
The challenge for Unit 3 is even steeper. It will need to increase production from 220,595 MWh to 316,365 MWh to reach a target of 536,960 MWh. That’s a 43 percent increase, a significant step up from the 34 percent increase the unit managed from Year 1 to Year 2, and again it’s coming off a larger base.