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$200M settlement announced over bankrupt Tonopah solar project

Updated July 30, 2020 - 3:17 pm

WASHINGTON — The Department of Energy on Thursday announced a settlement to recover $200 million in taxpayer funds from Tonopah Solar Energy, a first-of-its-kind Nevada solar project that never showed a profit and frequently was offline.

The $1 billion Crescent Dunes Solar Energy Plant, which received $737 million in loan guarantees in 2011, has been offline since April 2019. The closure brought back memories of California solar panel manufacturer Solyndra which received a $535 million federal loan guarantee in 2009 only to file for bankruptcy in 2011.

Department of Energy spokeswoman Shaylyn Hynes announced the deal with the company, which still must be approved by a bankruptcy court, as a win for taxpayers in a statement to the Review-Journal.

“This project has consistently faced technical failures that have proven difficult to overcome. The department’s decision was made after years of exhausting options within our authority to get the project back on track, given the significant taxpayer investment the prior administration committed to this project,” Hynes said.

Under President Barack Obama, the Department of Energy agreed to issue loan guarantees for the Nye County project in September 2011, shortly after Solyndra shuttered and filed for bankruptcy. Solyndra became a source of embarrassment for a president who had visited the company’s Fremont plant in 2010 and declared, “The true engine of economic growth will always be companies like Solyndra.”

The Wall Street Journal editorialized that Crescent Dunes was a “fiasco” that missed its start date, never met its electricity output projections and frequently was offline.

Bloomberg dubbed the $1 billion solar plant “obsolete before it ever went online” – given that advances in technology had made rival solar sources much cheaper to operate.

The design of the Crescent Dunes complex was unique. The plant used more than 10,000 mirrored heliostats, each with the square footage of a small house, to focus sunlight on a 640-foot-tall central tower and heat the molten salt inside to more than 1,000 degrees. The molten salt was then used to boil water, creating steam that drives generators to produce power day or night.

The 1,600-acre solar array built on public land over four years entered commercial operation in November 2015, with NV Energy as its sole customer.

The project had the bipartisan backing of then-Senate Majority Leader Harry Reid and then-Republican Gov. Jim Gibbons.

While Trump’s Energy Department supports renewable energy and has given $741 million to solar projects, a senior administration official told the Review-Journal that the $200 million settlement, if approved, “secures taxpayer money that was squandered by the previous administration’s failed energy pet projects.”

Contact Debra J. Saunders at dsaunders@reviewjournal or 202-662-7391. Follow @DebraJSaunders on Twitter.

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