Tuesday, April 3, 2012

World's Largest Solar Plant, With Second Largest Ever Department of Energy Loan Guarantee, Files For Bankruptcy



World's Largest Solar Plant, With Second Largest Ever Department of Energy Loan Guarantee, Files For Bankruptcy.(ZH).Solyndra was just the appetizer. Earlier today, in what will come as a surprise only to members of the administration, the company which proudly held the rights to the world's largest solar power project, the hilariously named Solar Trust of America ("STA"), filed for bankruptcy. And while one could say that the company's epic collapse is more a function of alternative energy politics in Germany, where its 70% parent Solar Millennium AG filed for bankruptcy last December, what is relevant is that last April STA was the proud recipient of a $2.1 billion conditional loan from the Department of Energy, incidentally the second largest loan ever handed out by the DOE's Stephen Chu. That amount was supposed to fund the expansion of the company's 1000 MW Blythe Solar Power Project in Riverside, California. From the funding press release, "This project construction is expected to create over 1,000 direct jobs in Southern California, 7,500 indirect jobs in related industries throughout the United States, and more than 200 long-term operational jobs at the facility itself. It will play a key role in stimulating the American economy,” said Uwe T. Schmidt, Chairman and CEO of Solar Trust of America and Executive Chairman of project development subsidiary Solar Millennium, LLC." Instead, what Solar Trust will do is create lots of billable hours for bankruptcy attorneys (at $1,000/hour), and a good old equity extraction for the $22 million DIP lender, which just happens to be NextEra Energy Resources, LLC, another "alternative energy" company which last year received a $935 million loan courtesy of the very same (and now $2.1 billion poorer) Department of Energy, which is also a subsidiary of public NextEra Energy (NEE), in the process ultimately resulting in yet another transfer of taxpayer cash to NEE's private shareholders.
As Bloomberg notes: "The company joins Energy Conversion Devices Inc., a U.S. solar manufacturer that suspended production last year; LSP Energy LP, the owner of a natural-gas-fired power plant in Mississippi; Ener1 Inc., maker of lithium-ion batteries for plug-in electric cars; solar-panel maker Solyndra LLC; and energy storage company Beacon Power Corp. (BCONQ) in bankruptcy."
And so central planning fails again, and again, and again, and again. But it sure will be better with the centrally planned monetary (and in the absence of a working Congress - also fiscal) policy. Because this time it really will be different.
From Reuters:
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.

Blythe is about 220 miles (354 km) southeast of Los Angeles.

"We have been working with Solar Trust of America for a couple of years in getting this project going," David Lane, Blythe's city manager, said in an interview. "Although the project is not in the city limits, we are the only city within 100 miles. My sense is that with the large investment in what was to have been the world's largest solar power plant, someone somewhere will buy it and build it."
At least someone's reputation will be tarnished as a result of this latest epic failure of the Obama administration to misallocate capital :
Solar Millennium said it has been sued by former Chief Executive Utz Claassen over public statements by company representatives that he claims have damaged his reputation and left him unable to find a job. Solar Millennium said the lawsuit would not directly affect its insolvency proceedings.Epic embarrassment. And not even a full year ago.
But before that, of course, we had the funding of the plant with a $2.1 billion loan guarantee from the US Department of Energy, the second largest ever, smaller only than Georgia Power's $8.33 billion loan guarantee.Hmmmm........Obama: "All the Choices We've Made Have Been the Right Ones"Read the full story here.

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