An April 17 online auction thought to be one of the first of its kind will offer the bankrupt Maricopa concentrated solar power plant in Peoria, which uses a rare solar-thermal technology.
Solar equipment frequently is auctioned from bankruptcies, but not this type, said auctioneer David Barkoff of Heritage Global Partners, which is handling the sale for the bankruptcy trustee.
"Power plants or power-generation equipment, yes, (we auction) lots of it," he said. "But I don’t think a solar-thermal power plant has come online for sale ever."
Last September, Stirling Energy Systems Inc. of Scottsdale filed bankruptcy, and the 1.5-megawatt demonstration project at 8475 N. 75{+t}{+h} Ave. in Peoria was closed.
The company that was running the power plant with a license to the technology from Stirling Energy, Maricopa Solar LLC, also declared bankruptcy and now is liquidating the power plant. But not the intellectual property to build and run it.
Stirling used a complex technology with mirrors focusing the sun’s heat on an engine in the middle of each dish. The engines converted the heat energy into motion, and the motion was used to make electricity.
Stirling built six of its so-called SunCatchers in New Mexico at Sandia National Laboratories, and then the larger demonstration plant in Peoria. Stirling’s plans to build tens of thousands of SunCatchers in California and Texas never were fulfilled.
Other companies use similar "dish-Stirling" technology, but they are far less popular than flat, black solar panels now common on rooftops. And Stirling’s competitors’ dishes are not identical to those in Peoria.
Maricopa Solar’s assets were listed at between $50,000 and $100,000 in its petition for bankruptcy. Barkoff said that the opening bid would not be disclosed until the auction, and he declined to estimate what a buyer might pay for the equipment.
Bidders must pay $25,000 just to register for the sale, but that’s only the beginning of the complications they will face if they buy the power plant.
The plant took about four months to build, but the buyer must sign a contract agreeing to remove all of the equipment no later than April 26, within nine days of the auction, according to the bankruptcy court order authorizing the sale.
Each of the solar dishes stands nearly 40 feet tall, meaning potential bidders need lots of vacant land, a crane and plenty of transportation to move the dishes.
The dishes are connected to the power grid, so the buyer must also coordinate with Salt River Project to safely de-energize the facility and take the equipment, separating it from SRP’s transformers and other equipment.
The power plant also is connected to a small pipeline of flammable hydrogen gas compressed to 3,000 pounds per square inch, and the gas lines must be purged with nitrogen before removal, according to the 42-page decommissioning plan buyers will be required to follow.
And there’s another catch: The plant’s instruction manual will be sold separately.
On March 15, the bankruptcy trustee for Stirling Energy Systems filed an objection to the sale of any "confidential information" in the upcoming auction, stating that those assets belonged to Stirling, not the Maricopa Solar affiliate auctioning the power plant.
The bankruptcy judge approved the objection, apparently preventing the sale of any documents that would explain how the complex machines work, including operation and maintenance manuals, specifications for the power plant’s weather stations, hydrogen stations, communications, computer hard drives and even the SunCatcher product descriptions.
Angela Abreu, a lawyer in New Jersey representing the Stirling trustee, confirmed that Stirling considers the intellectual property from the company to be assets owned by Stirling.
She said the company is working on a plan to sell those assets, but she would not say how or to whom.
Lothar Goernitz, the trustee for Maricopa Solar, said he would prefer that Stirling offer the intellectual property along with the solar equipment, which he is responsible for liquidating. But he said Stirling’s bankruptcy trustee did not want to sell the information along with the equipment.
"If (a buyer) wants to use the intellectual property and copyrights and whatnot, yes, they are going to have to deal with Stirling Energy Systems," he said. "But I have not come to the conclusion that there is no way that someone will come and buy this, disassemble it and use it."
He said he has been contacted by a variety of interested buyers, including some from overseas that could use the power system in remote areas. He also said that because other companies use similar dish-Stirling technology, that a buyer might not need the manuals to use the plant or parts of it.
"If you had 20 of these dishes in Sudan … this would be a much more proficient way of generating electricity," he said. "There are places in the world where this technology makes some sense. The obvious economic concern is how to disassemble it, relocate it and set it up that is cost productive."
Barkoff said 16 parties have signed non-disclosure agreements, which allows them to see details of the equipment.
Barkoff would not say how many have paid the $25,000 to become registered bidders, but he said he has had interest from educational institutions, technical colleges, utilities and scrap-metal dealers.
"Obviously, that is the worst and last alternative, to have it melted down for scrap," Goernitz said.
So who might be interested in the plant?
"That’s what I’m trying to figure out," said Patrick Phelan, an engineering professor at Arizona State University.
He said the greatest value would be the dishes themselves, which could possibly be retrofitted to another solar application not using the Stirling engines.
Companies like Southwest Solar Technologies in Phoenix are working with similar mirrored dishes to heat air and force it through turbines, which can be backed up by more traditional natural-gas-burning facilities.
But it’s unclear if such a company could use Stirling’s dishes, he said.
"I think it would be great to have one or two of these (for the university)," he said. "If we could set up one with the Stirling engine, and maybe another one side-by-side using another technology, that would be interesting and certainly useful."
He said he thinks it is unlikely that anyone would want to purchase the entire plant and relocate and restart it.
"I would not want to," he said. "But if someone has the need for a bunch of dishes, say 60, you could probably get them at a bargain-basement price."
The intellectual property would certainly be valuable to a competitor using similar technology, he said.
"If indeed someone wants to pursue the Stirling engine, I’m sure they learned a lot of lessons along the way, especially from a manufacturing point of view," he said.
Failed plans
Stirling Energy Systems had deals to build some of the largest solar power plants in the world using its dishes and sell the power to California utilities. Its Imperial Valley project was intended to produce 750 megawatts of power; another near Barstow, Calif., named Calico, was to produce 850 megawatts.
One megawatt is enough power to supply about 250 homes at once, when a power plant is running.
The 1.5-megawatt Peoria project was intended to demonstrate the dishes worked and that the company had a supply chain that would manufacture the dishes for the big California projects and another in Texas.
But the company ran into a variety of problems. In 2008, it got a $100 million investment from Dublin-based NTR plc. But by early 2011, it had sold the California projects to other developers who would use more traditional solar panels for the projects, and NTR wrote off its investment in Stirling.
Along the way, BNSF Railway Co. sued the Department of the Interior for approving the Calico power plant, saying the SunCatchers were a danger to train conductors on the tracks cutting through the proposed power plant.
"The SunCatchers are dangerous because they collect and emit solar radiation into the environment," the complaint said. "Available scientific studies have established that a single SunCatcher is hazardous to human receptors, such as but not limited to train crews on BNSF’s mainline."
Other companies have used the so-called dish-Stirling technology, including Infinia Corp. of Washington state, which has several of its dishes installed in Casa Grande at a Frito-Lay snack-chip factory. Its dishes are much smaller than Stirling Energy’s.
During a recent tour of that Frito facility, visitors were able to walk directly under the mirrored dishes without harm.
But Phelan said that the dish-Stirling technology has mostly fallen out of favor as prices for solar panels have come down in the past two years.
"It was a technology that was pursued quite vigorously by the Department of Energy and several companies," he said. "The conclusion was that it seemed to be impossible to manufacture these systems to operate reliably for a long period of time, and you can’t manufacture them cost-effectively, especially compared to solar photovoltaic (panels)."
One of the problems with dish-Stirling technology is that in some designs, the equipment heats up to temperatures greater than 1,000 degrees Fahrenheit, he said.
"Every day, the sun comes up, it hits the hot end of the engine, and it operates the rest of the day, then cools off at night," he said. "Every 24 hours it goes through this huge thermal cycle, and it causes a thermal-fatigue issue with the expansion when it’s hot and contraction when it’s cold again. It’s really difficult to make a system like that last a long time without a lot of maintenance."
Unknown performance
Salt River Project agreed to purchase the power from the Stirling demonstration project in Peoria starting in 2009, saying at the time that it hoped to learn whether the dish-Stirling technology held any promise.
Officials would not say how much they paid for the power other than to say they paid a premium for the renewable energy.
According to financial statements filed with the bankruptcy court, Maricopa Solar brought in $162,555 in revenue in 2011, before it shut down in September of that year. It earned $273,502 from when it opened in December 2009 through 2010.
But without knowing what SRP paid per kilowatt-hour of electricity, it’s impossible to determine exactly how well the plant operated based on those figures.
SRP officials said they are bound by a confidentiality clause and can’t discuss whether the technology was reliable. They are not interested in buying the plant at auction or working with any potential buyers to purchase power from the facility again.
"At this point, our concern is there is no one to provide parts," said John Hetrick, manager of sustainability policy and programs. "If anything starts breaking, there is no way to replace it because Stirling has gone out of business."
He said that SRP is not prejudiced against dish-Stirling technology and has even been contacted by Infinia in the past week to discuss working together.
"We have traditionally been technology agnostic," Hetrick said. "The goal for us is to find opportunities to provide customers with sustainable resources at the lowest possible cost. If they come to us and show the levelized cost of energy is competitive, and our engineers review their technology, we would certainly consider it."
