Bechtel plays down loss of major potential off-taker for 358MW solar project

The LA Times said that a review from the utility Los Angeles Department of Water and Power (LADWP) found that other renewable energy projects could charge the city less for electricity and with fewer risks.

Bechtel’s Soda Mountain proposals had received strong environmental opposition from the public and partner organisations including the National Parks Conservation Association and the Sierra Club among others. Consequently, LA officials also announced that the project could be too damaging to the migratory patterns of bighorn sheep to consider buying electricity from it.

LADWP never had a power purchase agreement (PPA) with Bechtel, but Cory Honeyman, a senior solar analyst at the consulting firm GTM Research, told PV Tech the project location suggests that the “ideal scenario” would be to have LADWP as an off-taker.

He added: “That is evidenced by a filing committed to the Bureau of Land Management (BLM) in the early stage development process where it was indicated that LADWP was the intended off-taker of the power.”

However a Bechtel spokesperson told PV Tech: “We are not dependent on any single off-taker and we never were.

“The Soda Mountain Solar project is in discussions with multiple power off-takers across Southern and Northern California regarding contracts for the power the project will generate. The project’s ability to proceed is not dependent on any single counterparty.”

Honeyman said the announcement from LA officials still raises questions about the project’s future as there is a short window of opportunity for project to secure a PPA, arrange financing, construct and come online before the Federal Solar Investment Tax Credit (ITC) is scheduled to drop from 30% to 10% at the end of 2016.

He added: “If they do change location or they downsize it or do anything that requires a second review of the project’s eligibility for getting a permit or siting approval, that is another chunk of time that eats into the projects ability to come online before the end of 2016.”

However, Honeyman said Bechtel still has off-taker options to consider, which are driven by Renewable portfolio Standard (RPS) solicitations.

The news came shortly after the BLM released its final impact assessment on 5 June, which recommended approving the project, but with a preferred alternative that reduces the size of the facility by more than 25%, from 358MW to 264MW, in response to the environmental concerns.

The suggested lower size project would remove a solar array north of the Interstate 13 route and reduce its size from 1035 hectares to 778 hectares.

Furthermore, the BLM is also proposing additional mitigation to reduce the project's night lighting and dust emissions, and to provide further compensation for potential impacts to bighorn sheep populations.

The BLM’s final environmental impact report includes a 30-day ‘protest’ period before it can make a decision on the project.

Honeyman said: “The fact that the BLM issued a [recommended] ruling approving the project with it being slightly downsized is a big hurdle that has been checked off by the developers.”

However, he also warned that opposition could “heat up” in the ‘protest’ period and delay the project further.

In response to the BLM assessment, David Lamfrom, California Desert associate director for National Parks Conservation Association, said: “This decision breaks trust with our desert community and contradicts BLM's professed desire to balance energy development with the protection of special places. This is not balanced decision making.”