Nevada says no public bonds for Faraday due to shaky finances

Faraday Future FFzero1 concept car

Faraday Future plans to build a $1 bn electric car plant in North Las Vegas. However, Nevada Treasurer Dan Schwartz says the state will not issue $120 mn in bonds to pay for supporting power lines, water mains, and roads until he is convinced Faraday owner Jia Yueting has the money to build the plant.

The crux of Schwartz’s concern is Jia’s reliance on equity-backed loans, a financing strategy that could leave Nevada taxpayers vulnerable to the whims of China’s volatile stock market. Jia has pledged 87 percent of his holdings in Leshi Internet Information & Technology — his flagship firm — for cash he then plowed back into his companies, regulatory filings show.

The stock, whose trading was halted in Shenzhen for the first five months of 2016, has dropped 11 percent since it resumed trading June 3, a move that heightens Schwartz’s fear that a margin call could prevent Jia from funding the plant.

Las Vegas solar power booms for business, not so much for homes

Mandalay Bay solar power
Mandalay Bay solar power

Cox Communication in Las Vegas now powers much of their downtown data center with solar power, ditto for an auto auction subsidiary. In addition, MGM has 20 acres of solar photovoltaic panels of the roof of the Mandalay Bay Convention Center. With the obvious advantages of rooftop solar, you’d think residential solar would be booming too, but no. NV Energy, owned by Warren Buffett’s Berkshire Hathaway, has at least temporarily poleaxed that, because profits. You know Warren, right? He’s that supposedly kindly old folksy gent from Nebraska who unaccountably has a reputation for being different from the rest of the exploitative hedge fund pirates. Hopefully a ballot initiative will poleaxe him back.

An initiative petition to amend the state constitution to end the monopoly of NV Power is being circulated. Matt Griffin, attorney for Nevadans for Affordable Clean Energy Choices, said Friday he did not know how many signatures had been collected but he was confident the question would qualify for the ballot.

If passed during this election and again in 2018, the measure would permit other electric companies to apply to serve Nevadans.

Back to the business solar installations and upgrades.

The two arrays actually went online several months ago. They have been shouldering about 65 percent of the power load for Cox Communication’s downtown data center and about 62 percent of the load for Manheim Nevada’s operation, project engineers said. On a long day of intense sun like Monday, that output jumps to more like 80 percent at the Cox data center.

Meanwhile across town, MGM Resorts is getting ready to power up an expansion of its solar array atop the Mandalay Bay convention center, which is being touted as the largest rooftop solar field in the nation.

With the addition of about 5,000 photovoltaic panels set to go online by the end of the month, the entire project covers about 20 acres of roof and can produce up to 8.3 megawatts of electricity when the sun shines.

“That’s about as much as you need to power Monte Carlo at full peak,”

Texas is the top wind power state

Top wind power states 2014
It generally surprises people when they learn Texas is the biggest producer of wind power. I mean, don’t Texans bathe in crude oil while foaming at the mouth about renewable energy? Well, actually, no. Texas has always been smart about energy. They import no electricity because they generate all they need. So, say you’re a Texas rancher who thinks treehuggers are silly. Then the nice man from the wind power company says we’ll pay you a tidy sum if we can put wind turbines on land you aren’t really using much. Will you say, Hell yeah! Well of course you will.

Wind speeds vary throughout the United States. Wind speeds also vary throughout the day and from season to season. In Tehachapi, California, the wind blows more frequently from April through October than it does in the winter. This is a result of the extreme heat of the Mojave Desert during the summer months. The hot air over the desert rises, and the cooler, denser air above the Pacific Ocean rushes through the Tehachapi mountain pass to take its place. In a state like Montana, the wind blows more frequently during the winter.

Fortunately, the seasonal variations in California and Montana match the electricity demands of the regions. In California, people use more electricity during the summer for air conditioners. In Montana, people use more electricity during the winter.

Wind power projects with one or more large wind turbines were located in 39 states in 2014. The five states with the largest generation of electricity from wind in 2014 were Texas, Iowa, California, Oklahoma, and Kansas.

Commercial-scale rail energy storage coming to Nevada

The ability to store power so it can be instantly converted to electricity is essential to the stability of the grid. Pumped hydro, using excess energy to pump water uphill into a storage lake where it can be released to instantly power turbines, is a reliable way to store power without using batteries. Startup ARES just got the ok to build a rail energy storage system in Nevada using the same idea. Extra power is used to send two electric locomotives and four 8,600 lb. rail cars 5.5 miles uphill. To generate electricity, the train is released and it generates power as it goes downhill.

This initial system is 50MW, which is substantial. ARES says it can scale to 1 GW, and a 500 MW system would only cost $20 more than this 50 MW project. One big advantage is there are no life cycle limits or degradation of the system because there are no batteries to wear out.

Electricity powers an electric motor in a locomotive that hauls a heavy load up hill. Sitting at the top of the hill, the rail cars store energy. When the energy is needed, the cars are released to roll down hill and the electric motor runs in reverse to generate electricity.

The same electro-mechanical principle that powers the ARES system supplies the regenerative braking power in electric vehicles like a Toyota Prius:… When an induction motor that powers a train or car is reversed, it produces electricity.

SunEdison bankruptcy highlights renewable energy problems

solar photovoltaic
The biggest problem renewable energy faces is greedhead, reckless management taking on huge debt for the company in a delusional attempt to grow-or-die. This is aided and abetted by Wall Street and hedge funds who, at least initially, profit handsomely from underwriting the debt or buying it. Company executives get juicy stock options, so it’s in their personal self-interest to do whatever they can to boost the stock price. However, little or any of this is healthy for the long-term prospects of the company.

The latest renewable energy company to disintegrate is SunEdison because no one could ever have predicted that ginormous debt, questionable and opaque accounting practices, and a relentless focus on short-term goals like goosing the stock price to pay for mor acquisitions, could ever lead to disaster. Until it does. SunEdison stock has dropped from $32 last summer to 34 cents. Lots of the blameless employees will no doubt lose their jobs and vendors may go under too.

Renewable energy has a bright future, as long as the companies grow slowly and sanely. It can be done. It must be done.

There is a timeless element to SunEdison’s swift demise: an executive with an Icarus complex chasing a fast-growing market embarks on an aggressive strategy fueled by cheap debt. Soar. Crash. Burn. Repeat.

Yet the collapse raises a bigger question: Can renewable-energy companies be profitable? Can green make green?

The answer, of course, is yes. Just as soon as they cross over a fundamental hurdle: finding a strategy that actually works.