Another Obama Administration Attempt at Solar Power Central Planning Goes Bust
Solar Trust of America which aimed to build a solar power plant in the California desert using parabolic mirrors has filed for bankruptcy. Reuters reports:
Solar Trust of America LLC, which holds the development rights for the world's largest solar power project, on Monday filed for bankruptcy protection after its majority owner began insolvency proceedings in Germany.
The Oakland-based company has held rights for the 1,000-megawatt Blythe Solar Power Project in the Southern California desert, which last April won $2.1 billion of conditional loan guarantees from the U.S. Department of Energy. It is unclear how the bankruptcy will affect that project…
Solar Trust of America and several affiliates filed for protection from creditors with the U.S. bankruptcy court in Delaware. It estimated to have as much as $10 million of assets, and between $50 million and $100 million of liabilities.
The U.S. Department of Energy press release last April announcing the loan guarantee stated:
U.S. Energy Secretary Steven Chu today announced the offer of a conditional commitment for a $2.1 billion loan guarantee to support Units 1 and 2 of the Blythe Solar Power Project, sponsored by Solar Trust of America, LLC. The concentrating solar thermal power plant includes two units comprising a combined 484 megawatt (MW) generating capacity, an eight-mile transmission line and associated infrastructure. The project will be built adjacent to the City of Blythe in Riverside County, California and is expected to create over 1,000 construction jobs and approximately 80 operations jobs. The plant is estimated to avoid over 710,000 tons of carbon dioxide emissions annually, equivalent to the annual greenhouse gas emissions from over 123,000 vehicles.
"Loan guarantees play an important role in facilitating the development and deployment of innovative technologies at massive scope and scale," said Secretary Chu. "Continued investments like this project make solar power more efficient and cost competitive while creating thousands of jobs and strengthening the economy."
The invaluable Powerline blog notes that there appears to be good news for taxpayers—the company did not take any of the $2.1 billion in federal loan guarantees offered it by the Obama administration. Apparently Solar Trust executives concluded that cheap Chinese photovoltaic panels made their project even more uneconomic and declined to take the federal money. As Jeff Hinderaker at Powerline wryly observes:
So the Obama administration's proposed loan guarantee was so dumb that the prospective borrower decided not to take it! That tells you all you need to know about the Obama administration's ability–actually, the ability of any administration–to execute an industrial policy that doesn't fleece the taxpayers.
One would have hoped that even the dimmest politicians and policymakers could understand by now just how brilliantly well central planning worked in the old Soviet Union. No such hope and no such change.