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The Solar Game Changer in California
Unfortunately, I know Blythe, California too well. This natural blast furnace is in a God forsaken corner of the state where I hunted jack rabbits as a kid, the Indians survived on Gila monsters for protein, and it regularly reaches 130 degrees in the shade. It is also where Peter Fonda and Dennis Hopper crossed the “bridge of no return” over the Colorado River in the cult flick Easy Rider.
Blythe has unsurprisingly become ground zero for the global thermal solar movement, which I have been chronicling with great interest in these pages (click here for “The Solar Boom in California” at http://www.madhedgefundtrader.com/october-14-2010.html ).
The entire industry has just taken a quantum leap forward with the approval of a massive 2.8 megawatt plant to be built by Solar Trust of America, a joint venture between two European companies. It dwarfs the 392 MW plant to be built by BrightSource Energy which only received its own go ahead weeks ago.
It is all part of a rush to start alternative energy projects before Federal subsidies from Obama’s 2009 stimulus package expire at the end of this year. The Solar Trust project expected to qualify for $900 million in cash grants and additional loan guarantees from the Department of Energy.
The facility will deploy arrayed mirrors over 7,025 acres, or 11 square miles, aimed at a conventional steam turbine. This will generate enough electricity for 2 million homes, about 15% of the total in California. With the Tres Amigas facility in New Mexico coming online soon, this raises the possibility of the Golden State selling excess green, carbon free power to the rest of the West (click here for that piece at http://www.madhedgefundtrader.com/october_19__2009.html ).
Sorry guys, no equity play here. The new plant will be built and operated by privately held European companies that have been flocking to the US with their advanced technology to cash in on our generous subsidies. But it does make other publicly listed smart grid, transmission, and storage plays out there more interesting. It is all part of a huge, new alternative energy industry that is growing far faster than most investors realize.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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"It is all part of a rush to start alternative energy projects before Federal theft from Obama’s 2009 stimulus package expire at the end of this year."
There...fixed it for you.
Do I get a subsidy?
Californians love novel things that waste money. Take wind farms for example.....
I continue to be amazed that you get posting rights on this site.
the record temperature in Blythe was 122 degrees, set in 1922
Hope you checked your rabbits for Tularemia
2.8 Megawatts isn't shit, the program is actually four 250 megawatt plants with a proposed combined output of 1 Gigawatt, about enough to power 300k homes in California (this is the estimate from the CEC who approved the project) but in reality it will be probably closer to 130k because solar output is not constant.
Solar Millennium (the group behind Solar Trust) still hasn't gotten their 1.9 billion in funding they need to start the project, and with all those US Govt loan guarantees expiring in about 45 days, I doubt they will. Even with the massive tax breaks the Fed is proposing, the only project that looks like it will actually get built is Ivanpah. Still the biggest hurdle to actually being put into production is the lack of means of transport to the main grid which will still have to be built before any of the solar power can be utilized.
Of course all of this ignores the impending lawsuits that will halt work for a year or two over the desert tortoise for starters.
Solar is the new Biofuel, a highly subsidized, ineffcient and immature means of energy production and utilization. But for the massive govt subsidies for these projects they would never leave the planning phases.
If it was actually a viable business model private industry would be moving forward with it instead of relying on govt handouts to get it off the ground. All I see is a bunch of looters and moochers rushing to the trough that the Obama clowns have been filling.
Well said. +1.
Cloudy days, winter, night, still need our baseline needs met through normal power producers...
Green energy is the greatest wealth destroying technology ever created, yet another aspect of our suicidal financial behaviour...
MHFT demonstrates that, like many big money finance guys, at heart, he's just another socialist. None of this sh*t makes sense without govt. coercion, and once you are willing to trade on govt. coercion, you've picked your side.
I'd rather produce actual value and sleep at night.
Cheers,
prat
+1
I recommend everyone read The Solar Fraud by Hayden. He measures up solar, wind, hydro, and biomass (including ethanol) against fossil and nuclear. Guess what? Green energy sucks cock. Solar is the least terrible of them, but still quite inferior to nuclear: solar doesn't require tons of land area compared to other greenie tech but the energy payback (that produced versus the man-hour and other costs to produce it) is low and more critically most solar cells require rare earth metals (to get a large amount of juice would require many times the known reserves.) Subsidies will always be needed for them; think of it this way: if the power used to manufacture/maintain the solar arrays had to be from solar power also, how many of em' would you need?
In more precise and simple terms, the ratio of net energy gains is low. That is energy returned on energy invested (EROEI), net energy gains (NEG).
The same as a monetary profit margin, as the real value of money is its represented claim on a share of an economies net energy surplus, energy surplus required in order to produce all goods and services we need and desire of monetary exchange value.
If something costs more to produce in monetary terms than what you can sell it for, it also embodied more energy into its production than what it can be exchanged for in monetary energy value. If we were to change from a dollar/euro/yen monetary medium system to say an energy unit exchange system (the future), it would make absolutely no difference, money is and always has been a representation of scarce (and declining NEG rates) surplus energy and the sooner economics understands and accepts this oh so obvious and many time proven fact (by mathematicians, physicists of course, not economists), the sooner we can understand the true causes and challenges our global economic profit system faces today and increasingly into the future. Just sayin ;-)
Apparently the "quantum leap" is that someone has figured out how to cash in on a fat taxpayer subsidy. That's awesome. And as soon as year end rolls around and the subsidy goes away, so does the building of any new capacity. is it just me, or should we consider technologies to be "game changers" only if they can pull their own weight?
What interests me most is how Europeans are sweeping up the opportunities. Can you please elaborate on this tomorrow in your regular update on this industry.
Check your numbers.
You say this is a 2.8MW plant that dwarfs a 392MW plant. hmmmm, something is wrong here. Can you spot the error?
They are using the new math, which is a required subject for all green energy projects..