Crescent Dunes, a Billion-Dollar Failure in the Middle of Nevada
August 18, 2021
The switch to renewable energy is slowly but surely happening. As new technology develops, renewables are becoming cheaper, and their usage in the economy is increasing. As a result, people are also more supportive of investing in things like solar plants. But that doesn’t always work out for the best. In this article, we present the case of Crescent Dunes, a billion dollars solar flop in the middle of Nevada.
As you can imagine, power outages are never good news, but they are even more dangerous in cities like Las Vegas that are dependant on maintaining their flash and lights for their tourism. So what is needed is a constant and secure supply of energy and electricity, which means renewables. Nevada is an obvious choice for a solar plant. Sunny days? A lot of sunny days tell more electric power gets generated.
A Promising Start
That is the reason Crescent Dunes finds itself near Tonopah, about 200 miles northwest of Las Vegas. The installed capacity is 110 megawatt and 1.1 gigawatt-hours of energy storage. Crescent Dunes was the first concentrated solar power (CSP) plant with a central receiver tower and advanced molten salt energy storage technology.
Its original owner was a startup energy venture company SolarReserve. It was created via seed funding by US Renewables Group and United Technologies through Tonopah Solar Energy LLC, the Crescent Dunes plant owner and operator. The Crescent Dunes project got subsequently backed by $737 million in US government loan guarantees and the right to use public land in 2011. Construction started in 2013 and got finished in 2013.
Mounting Troubles
The Crescent Dune’s problem was simple. Although its average monthly production exceeds 40,000 MWh on paper, in reality, it never reached that value and only exceeded half of it during nine months. The closest it came was in September 2018, when it produced 31 500 MWh. Then, in April 2019, the plant got shut down because the project’s sole buyer, NV Energy, terminated the Power Purchase Agreement for failure to produce the contracted power.
This outcome was a huge hit for everyone’s involvement, especially for nearby attractions, like Las Vegas casinos and hotels, which season depends on this. Of course, users go to alternative go-to online casinos on their mobile devices (you can find it here), but that wasn’t the experience they were looking for, nor the pitch-black one. They want a cold drink in one hand and the other hand for smashing those buttons.
Besides that, the plant suffered malfunctions in its beginning. It began operation in September 2015 but went off-line in October 2016 due to a leak in a molten salt tank. It returned to process in July 2017.
Bankruptcy
Because of that, Tonopah then defaulted on repayments to the $737 million loan guarantee by the DOE. Since then, SolarReserve got forced to cease operations. Finally, in 2020, Tonopah LLC filed for Chapter 11 bankruptcy with the United States Bankruptcy Court in Delaware. Tonopah still owes $425 million on its DOE loan but concluded a settlement according to which the department will recover at least $200 million, subject to court approval. So naturally, this whole episode shook investors’ confidence in CPSs worldwide.
On December 3, 2020, the Chapter 11 bankruptcy reorganization plan got confirmed by the court. As the result of this plan’s confirmation, Cobra now has operational control of the plant. Cobra Energy Investment LLC is a division of Spanish construction company ACS Group and Banco Santander, S.A.
Newsessentials Blog 
Posted on November 5, 2021
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