US Taxpayer Backed Tonopah Solar Energy Files for Bankruptcy Protection

Posted on 08/02/2020


The owners of a failed massive solar thermal farm in the Nevada desert had received US$ 737 million in a U.S. federal loan guarantee. Those owners filed for Chapter 11 bankruptcy protection, which could have the U.S. Department of Energy to lose up to US$ 225 million. The infamous Crescent Dunes solar thermal power project was marketed as a cutting edge solar project, but faced a countless number of issues. The solar power plant is approximately 13 miles northwest of Tonopah, Nye County, Nevada, about 190 miles northwest of Las Vegas.

Tonopah Solar Energy, LLC is owned by SolarReserve, LLC and Cobra Energy Investment LLC, a division of Spanish construction company ACS Group and Banco Santander, S.A. SolarReserve was formed in early 2008 with seed capital from US Renewables Group, in partnership with United Technologies Corporation (UTC).

Background

When Tonopah Solar was formed, SolarReserve CSP Holdings LLC was the sole owner. SolarReserve needed capital. After exploring its options, Tonopah took out loans from the United States Department of Energy and partnered with Cobra Thermosolar Plants, Inc. as a co-venture partner. In late September 2011, Tonopah Solar Energy got a US$737 million loan guarantee from the United States Department of Energy and the right to build on public land from the U.S. Bureau of Land Management. Part of the investment included US$ 170,000,000 in EB-5 investment through SolarReserve/ACS Cobra partner CMB Regional Centers.

The Crescent Dunes solar plant started operations in September 2015, but was taken offline in October 2016 over a leak in a molten salt tank. The plant resumed operations in July 2017. The plant encountered numerous technical problems and only achieved 20% capacity factor in 2018. SolarReserve claims that Cobra botched the construction of the power plant, which caused the U.S. Department of Energy to declare events of a default under the governing loan documents. The site has not produced power since April 2019 and its sole customer, NV Energy, subsequently terminated their contract. The U.S. Department of Energy took over the shuttered plant in August 2019.