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Ivanpah Hitting First ‘Forbearance’ Milestone With Performance on the Rise

UPDATE (August 9, 2016) — In a filing today, NRG Energy confirms that Units 1 and 3 met their production requirements under the forbearance agreements, extending those agreements through January 2017. From the filing: “Subsequent to the close of the second quarter of 2016, each of Ivanpah’s unit 1 and unit 3 satisfied their respective production requirements for the initial six-month measurement period under the forbearance agreements.” H/T to NRG’s David Knox for the notification.

Original post:

Energy production was up at Units 1 and 3 at Ivanpah in the first half of 2016, despite a highly publicized fire in May, suggesting the solar power plant is likely to get additional time as it works to make good on its contracts with Pacific Gas & Electric.

Ivanpah failed to meet guaranteed production minimums for the PG&E-contracted units in the plant’s first two years of operation, 2014 and 2015, and faced default. But PG&E and California regulators granted the plant, led by majority owner and operator NRG Energy, a reprieve – “forbearance agreements” that put the original power purchase agreements, with their escalating production requirements, on hold while Ivanpah tries to step up its game.

The forbearance agreements run for an initial period of six months – February 1 through today – and call for a six-month extension “if the Projects meet certain production requirements during the initial six-month period,” according to California regulators (PDF).

Those “certain production requirements” are confidential, but reports to federal energy agencies* indicate the two units that sell power to PG&E have performed well, with generation from February 1 through June 30 of 221,271 megawatt hours, a 16 percent increase compared to the same period in 2015. It’s an increase of 87 percent over 2014, as well.

output

Assuming July proceeded without incident and that the six-month thresholds weren’t onerous, that would seem to set the plant up for another six months of forbearance. That would then give Ivanpah the opportunity to face the next year of its PG&E contracts, which measure performance on a two-year rolling basis, without the burden of its dismal first year.

“While the fire obviously impacted our operations, we are pleased with our generation on all units since coming back online,” NRG spokesman David Knox said in an email. “We will be reporting the six month forbearance results to PG&E in August.”

NRG has described a number of engineering fixes that have helped improve performance – see this piece by Susan Kraemer for details. It’s also true that Ivanpah is using significantly more natural gas this year than in its first two years of operation.

The plant uses “night preservation” boilers to keep seals intact overnight and “auxiliary” boilers to get it jumpstarted in the morning. The auxiliary boilers are also used in “supplementing solar generation during periods of transient clouds or at the end of the day,” according to technology provider BrightSource.

From January through May, the two PG&E-contracted units together used 381.2 mmcf of natural gas – 188.5 mmcf for Unit 1 and 192.7 mmcf for Unit 3. That’s an increase of 42 percent over the same period in 2015.

gas

Still, each unit is allowed to use 525 mmcf annually (up from the original cap of 384 mmcf), so it doesn’t look like staying under the limits will be a big problem.

*Reports to the Federal Energy Regulatory Commission provided quarterly data for January through June. Reports to the Energy Information Administration provided monthly data for January through May. The reports are generally 99.5 percent consistent with each other, and were blended to determine output for the February 1-June 30 period.