La Paloma files for bankruptcy - that pesky duck !

[Shannow]

http://www.reuters.com/article/us-la-paloma-bankruptcy-idUSKBN13V2PY

duck curve again, reducing daily profitability to the point that this much required peaker can't make money.

 

[Burt]

Maybe because it's not a peaker? This combined cycle plant can't start in the required ten minutes.

 

[Shannow]

The disruption of solar has meant that the requirement for "peak" non solar has moved later than the load peak has (and is) traditionally been.

So part of the traditional peak is now taken by solar.

The new thermal peak is steeper, and the total area under the curve to make money smaller.

So the disruptive technologies push out traditional, without being able to supply the market themselves...requiring way less efficient fast start technologies to be newly built (which they won't do until they make money).

Duck curve at work.

That 900MW needs 3,000MW (nameplate) of solar, plus storage, to replace its utility...and that's VERY expensive.

There IS no orderly transition using market forces.

 

[Shannow]

remember, natural gas is cheaper than ever ATM...

 

[Pop_Rivit]

 

[Shannow]

Oh, look...Pop_Rivit has something important to contribute !!!

 

[Bgallagher]

La Paloma is a pretty decent Mexican place in the town next to me.

 

[czbrian]

I think the plant was just over leveraged. My company manages both peaking plants and cogens in California and the plants are still profitable with the SRAC prices being in the toilet. When one of my private equity clients bought a plant in California around 5 years ago, the forecast they were getting for the market heat rate from consultants were just way out of line with what our own asset managers were forecasting. If you believed those forecast and leveraged the cash flows based on that, you would be in trouble today. I'm not going to feel sorry for any private equity group like Rockland betting on the direction of market prices.

 

[A_Harman]

Maybe La Paloma's owners should go to the California state government and ask for subsidies like are given to wind and solar.

 

[turtlevette]

Originally Posted By: Shannow
duck curve again, reducing daily profitability to the point that this much required peaker can't make money.


Duck curve? I seriously doubt solar can make a dent in any peak in California. The loads are massive. How old is the plant? A town here in mass scrapped a combined cycle unit in favor of a new one. Theyre like cars. Its cheaper to build new than throwing money at a worn out unit.

 

[Shannow]

Originally Posted By: turtlevette
Originally Posted By: Shannow
duck curve again, reducing daily profitability to the point that this much required peaker can't make money.


Duck curve? I seriously doubt solar can make a dent in any peak in California. The loads are massive.


What I suggested...

Originally Posted By: Shannow
The disruption of solar has meant that the requirement for "peak" non solar has moved later than the load peak has (and is) traditionally been.

So part of the traditional peak is now taken by solar.

The new thermal peak is steeper, and the total area under the curve to make money smaller.

So the disruptive technologies push out traditional, without being able to supply the market themselves...requiring way less efficient fast start technologies to be newly built (which they won't do until they make money).


Reality

http://reneweconomy.com.au/californias-duck-curve-has-arrived-earlier-than-expected-36106/

2013 predictions of California...note that generation requirements are moved out of daytime, and to peaks, requiring heavier ramps.

Less "area under the curve" means less MWh generated to cover the costs of the operation...simple...their price goes up, profitability goes down until they cease generation...

What actually happened

Originally Posted By: turtlevette
Theyre like cars. Its cheaper to build new than throwing money at a worn out unit.


Really ?

they are only going to be built new if they can make money, aren't they ?

If they are built, they will be simple cycle GTs with <30% efficiency (clean ???), and will only be built when power prices reach the point at which THEY will cover their costs.

 

[CT8]

Californians deserve the government they elect. Californians love to pay the corrupt government and its lobby.