In September 2024, I wrote that the U.S. would soon be dotted by abandoned, orphaned wind and solar projects, similar to historical mining and oil and gas extraction assets. It was a prediction built on two primary factors: the history of every heavy industry, and a 15-20-year anticipated asset life for renewable energy facilities. Combine those two things, and res ipsa loquitir — the thing speaks for itself.
Unfortunately, this prediction appears not to have been quite as apparent to planners, developers, and policymakers. More established industries are often required to establish pre-paid disposal trust funds when building a new facility. This has generally not been required for wind or solar farms. This means we can expect a massive call for funding to dispose of or replace wind turbines and solar panels in the next 10-20 years.
When existing and planned turbines and solar panels reach their end of days, owners of these assets will likely mimic their historical energy and mineral extraction cousins and leave them to rot in place, becoming tomorrow’s orphaned oil and gas wells and mines. This is an unfortunately normal aspect of human behavior that could turn today’s “green” energy projects into tomorrow’s environmental hazard.
The gigantic Ivanpah Solar Electric Generating System in the Mojave Desert is emerging as an example of this phenomena. Despite producing far less power than expected at a price quadruple the cost of a new solar installation, California regulators are requiring Pacific Gas & Electric Company (PG&E) to keep this project in operation.
This is due to another aspect of human nature — continuing to pursue a failed strategy because of previous large investments. This is known as the sunk cost fallacy. And boy have these investments been heavy.
The Ivanpah solar plant has a construction price tag of $2.2 billion. It began operations in 2014 after receiving investments from Google, NRG Energy, and BrightSource Energy, a $1.6 billion loan guarantee from the Obama administration, a $535 grant from the U.S. government, a 30% annual federal tax credit, and the strong support of then-Governor of California Arnold Schwarzenegger.
While it seemed like a good idea at the time, it turns out that the concentrated solar power technology didn’t work as hoped. The array of 350,000 mirrors that was supposed to focus sunlight onto boilers atop centrally located towers were better at killing thousands of birds than efficiently producing electricity.
This is pretty normal when attempting innovation. Sometimes good ideas don’t work in the real world. In this case, the writing was on the wall before construction — Google stopped investing in November 2011 because the price of photovoltaic solar systems (the current industry standard) was plummeting.
PG&E wants to terminate its power purchase agreement with the plant to save customers money. It’s clear this solar asset is doomed. There are only two real questions at this point:
1. When, if ever, will it be properly abandoned, and the land returned to its natural state (or used for a different kind of project)?
2. Who will pay for this abandonment and reclamation?
While many of these solar farms are currently owned or operated by companies with strong credit, there is a long and ugly record of companies with high credit ratings losing financial strength over time. There is also an equally long and ugly record of companies with strong credit ratings selling assets and subsidiaries with large liabilities to entities with limited financial resources and poor credit.
Prefunded disposal trust funds, such as the ones required for oil and gas or mining projects — are rare for wind or solar farms. A prefunded disposal trust was not required for the Ivanpah facility.
The likelihood of a future of abandoned turbine and solar farms is increased by the unreliable political nature of tax credits and mandates that have driven wind and solar development in recent years. Someone will have to pay out of pocket for projects like Ivanpah, and it would be smart policy to require prefunding or a sinking fund for disposal of other green energy assets — especially ones that haven’t been approved yet. Their useful lives will come to an end, and being ready for that inevitability would be good.
This essay is part of a series from Thomas Kalb, Director of the Coastal Bend Midstream Program at Texas A&M University-Corpus Christi, examining issues, policies, and considerations impacting how we produce and use energy.
Let’s Clear the Air has received permission to publish this article on behalf of Thomas J. Kalb.
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