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New power plant may mean millions for Palmdale


Palmdale expects to enter the nation’s “clean energy” sweepstakes with its new hybrid power plant which, upon completion, could inject $5 million annually into the local economy. There’s even the chance that, once the plant is sold to a private operator, Palmdale could receive upward of $27 million, which would allow for an expansion of general fund programs such as law enforcement and parks allotments. Commercial operation could begin this summer.

The power plant, officially the Palmdale Hybrid Power Plant (PHPP), is located south of East Avenue M in the northernmost region of Palmdale bounded by Sierra Highway to the west, East Avenue M (Columbia Way) to the north, and U.S. Air Force Plant 42 on the south and east. It is expected to produce just over 600 megawatts of electricity, or enough to supply power to about 500,000 homes and possibly help hold down the costs of generating electricity in the Antelope Valley.

By utilizing solar energy, the plant will combine the clean burning natural gas fired turbine technology (much more efficient than traditional coal-fired turbines), thereby resulting in a fully integrated “hybrid” design, reportedly the first of its kind in the world.

Briefly, here’s how it works: The combined-cycle equipment utilizes two natural gas-fired combustion turbine generators (CTG), two heat recovery steam generators (HRSG), and one steam turbine generator (STG). The solar thermal equipment uses an array of parabolic collectors to heat a high-temperature working fluid. This hot fluid is used to boil water to generate steam, while the combined-cycle equipment is integrated thermally with the solar equipment at the HRSG, and both will utilize the single STG that is part of the plant itself.

The plant will have a nominal electrical output of 617 megawatts; the solar thermal input will provide about 10 percent of the peak power generated by the plant during the daily periods of highest energy demand. The required natural gas is supplied via an 8.7-mile pipeline to be designed and constructed by the Southern California Gas Co. Because water is a premium asset in this part of the Mojave Desert, the steam turbine will be “wet cooled” using reclaimed water (treated effluent) from local wastewater treatment plants, employing what is called a “zero liquid discharge” system.

The plant is, in effect, part of two power projects in Kern and Los Angeles counties. According to Paul Caudill, president of MidAmerican Solar, “The Antelope Valley Solar Projects are already creating needed jobs and economic opportunity in local communities, while at the same time, providing direct, long-term environmental benefits. We look forward to continuing our involvement in the Rosamond, Lancaster and Palmdale communities.”

MidAmerican Solar owns the Antelope Valley Solar Projects, while SunPower is the designer and developer, as well as handling engineering, procurement and construction. The entire site measures 3,230 acres with the total cost estimated to be $950 million.

And it is about to be sold. A Seattle company, Summit Power Group LLC., is set to buy the rights to the plant for $27.4 million. Summit develops a variety of energy products, including “carbon capture” projects for enhanced oil recovery, natural gas, coal, wind, solar projects and other energy-intensive industrial projects.

Palmdale spent $18 million in 2007 to buy the land from Lockheed Martin and, if the plan is successful, about three dozen “high paying” jobs will come to Palmdale. “The sale of the power plant will generate millions of dollars that will be invested back in our community,” said Palmdale Mayor Jim Ledford in a statement last Spring.

“It will also create up to 600 high-paying construction jobs for the project that can take up to 30 months. The plant will infuse up to $5 million annually into our local economy, through the purchase of parts, supplies and items at local restaurants and retailers. Add to that the revenues generated by property and business taxes and it will have a tremendous positive economic impact for the region.”

City staff is moving ahead with the Summit proposal; the company was cited for its broad experience and familiarity with the California market and the fact that its proposal offered the most value to Palmdale. “Summit has worked on similar successful projects in California, across the country, and internationally,” said Palmdale director of Public Works Mike Mischel. “Beyond their experience, they have demonstrated a firm knowledge of an ever-changing market and atmosphere to make the project a success.”

Southern California Edison (SCE) has agreed to two long-term power purchase contracts for the Antelope Valley Solar Projects. Already, SunPower is installing its Oasis Power Plant product—a fully integrated, modular solar technology that is engineered to rapidly deploy utility-scale solar projects while minimizing land use. Solar panels will track the sun throughout the day, increasing energy capture by up to 25 percent. The electricity produced will reportedly displace about 775,000 metric tons of carbon dioxide per year, or the equivalent of removing about 3 million vehicles from the road over the next two decades.

California has established a “renewables” goal of 33 percent by 2020. This will mean installation of many additional wind and solar projects which can be unreliable and expensive. The new Palmdale plant—with a modern “rapid-start” and flexible configuration—will provide a needed buffer against intermittent renewable energy sites, thereby increasing reliability of the SCE grid as well as holding down costs. The plant is said to have undergone the most extensive environmental review in the nation, with the California Energy Commission stating in its decision to permit construction: “The Conditions of Certification also assure that the project will neither result in, nor contribute substantially to, any significant direct, indirect, or cumulative adverse environmental impacts.”

“Instead of taking oil from thousands of miles away, we’re taking the sun,” said Gov. Jerry Brown. His move two years ago to promote clean energy standards statewide may create more “cleantech” jobs, as utilities race to secure contracts with renewable energy power providers. “This is about California leading the country and America potentially leading the world.”

There’s also good news from the Department of Energy which awarded Sun Power and NRG Solar a $1.2 billion conditional loan guarantee for the California Valley Solar Ranch, a 250-megawatt power plant to be built in San Luis Obispo County. The plant is expected to create about 350 jobs and generate enough power for 60,000 homes.

With the new hybrid plant, Palmdale may have avoided a so-called “catch” associated with recently-constructed energy plants. A handful of cities and towns in the Midwest during the early 2000s bet their fortunes on a coal-fired power plant shortly before the domestic oil and natural gas boom hit its stride. They thought the plant could protect against wild electricity price swings, but, instead, construction cost increases, lower natural gas prices and other factors have erased any competitive advantage.

The towns invested in Prairie State Energy Campus, a massive $5 billion plant just outside of Marissa in southern Illinois. More than 200 cities and towns are buying power through the project, but one town, Marceline, Mo., northwest of St. Louis, is reeling. The 2,000-person town has only $40,000 left to make three payments of about $100,000 a month.

The Great Recession hit five years ago, depressing expected growth in demand for electricity. Then “fracking” and other advanced drilling techniques brought down the cost of natural gas for energy generation. That meant towns were stuck with paying for coal-fired power that is more expensive than electricity available on the open market. A big change took place in the U.S. oil boom and natural gas production through horizontal drilling or hydraulic fracturing (“fracking”). As a result, wholesale natural gas and electricity prices were at 10-year lows last year.

Palmdale is not immune to delays and cost overruns. Sometimes land disputes or environmental concerns (the Antelope Valley is a protected habitat for the kit fox and the desert tortoise) can bring forth unforeseen problems. “We had to do an analysis of the flora and fauna,” Ledford said at the beginning of construction. So far, the various protected critters—seen and unseen—have not posed a problem for a potential investor. Around the start of construction, Palmdale saw a 9 percent drop in sales tax and a 45 percent decline in construction fees and permits. Ledford said at the time that major Antelope Valley employers paid more for power in California than in other states.

“Lockheed Martin pays twice (as much) for power in California than it does in Dallas-Fort Worth. We are going to work on that and, hopefully, reduce that cost.” Reducing huge energy bills, Palmdale officials believe, could persuade large corporations like the defense giant from leaving town.

Palmdale has entered into a Power Purchase Agreement (PPA) with PsomasFMG, which will install solar shade structures in the parking lots of some city facilities, selling the resulting energy to the city at a discounted rate. It is anticipated that, in the first year, Palmdale will purchase the energy for approximately $283,500, resulting in a savings of $63,000.

Through the life of the 20-year PPA, Palmdale will spend about $7.8 million for the energy, saving another $1.4 million based on conservative estimates. The city will also retain the rights to renewable energy credits.

“A lot has happened in the energy marketplace over the past five years,” Mischel explained further. “Summit has the pulse of what is needed in terms of producing electricity, lowering emissions, ensuring the continued success of renewable energy sources and making it all happen in an economically viable manner. Those who remember the ‘brown-outs’ of the late 1990s and during the energy crisis of 2000-2001 know that we don’t want to go down that road again.”