January 26, 2009

Southern California utilities eye Inland desert as energy goldmine

The Press-Enterprise

Inland Southern California's desert backyard is ground zero in the state's efforts to cut back on polluting fossil-fuel-burning power plants and lead the nation's conversion to renewable energy.

For decades the region has been recognized for its rich renewable resources, from wind in the Coachella Valley and Tehachapi Mountains to the Salton Sea's underground reservoir of geothermal power to some of the most intense desert sunshine in the world.

Spurred by a state-imposed renewable energy requirement, now all of the major utilities in California -- Southern California Edison, Pacific Gas and Electric and San Diego Gas and Electric -- are scrambling to sign contracts to purchase electricity from new projects planned in the Imperial Valley and Mojave Desert.

"Because the California desert, particularly the Mojave Desert, is such a great place to develop solar and because of the proximity of large urban areas, there is probably more solar development going on in Southern California than anywhere else in the world," said Terry O'Brien, the California Energy Commission's deputy director of siting, transmission and environmental protection.

The task of transforming the state's energy structure to accommodate renewable power is huge and can't be done quickly. "We are transforming the electricity system in a way that hasn't been done before," said O'Brien.

Renewable energy provides about 12 percent of California's energy needs. State officials do not expect that investor-owned utilities will meet a legislated mandate to supply 20 percent of their customers' power needs with renewable energy by 2010.

"We should get close in 2012," said Dave Hawkins, lead renewable power engineer for the Independent Systems Operator, the agency responsible for maintaining the reliability of the state's energy grid.

Still, the push to renewable energy is intensifying with a state and national campaign to fight global warming and forge energy independence from foreign oil producers.

Gov. Arnold Schwarzenegger issued an executive order calling for 33 percent renewable energy in California by 2020 and said he will sponsor legislation to make that target a legal requirement for public and private utilities.

Currently, municipal utilities are exempt from the state renewable energy portfolio mandate and have set their own goals.

Andy Horne, Imperial County's deputy chief executive for natural resources development, hopes jobs generated by a burst of renewable energy development will trim that county's 23 percent unemployment.

Horne said in the past he has seen corporate interest in renewable energy investment track with oil prices. Rising oil prices kindled interest in renewable energy that quickly dimmed when oil prices fell, making renewables less competitive with conventional coal and gas generation.

But this time as oil prices fall, the interest in renewable generation is holding strong because utilities must continue buying to comply with the law. "I think this is a different ball game," Horne said.

Economic Constraints

Meeting a 33 percent renewable goal by 2020 will require adding 20,000 megawatts of renewable power to the state grid -- enough to supply about 15 million homes.

That calls for the construction of $60 billion in generation facilities and $6 billion in new transmission, more than half of that in Southern California, said Dave Olsen, coordinator of the Renewable Energy Transmission Initiative

Olsen said that task force of stakeholders, including state regulatory agencies, the energy industry and the Sierra Club, is determining the most effective and least environmentally destructive places to locate renewable energy-generation projects and the transmission lines to serve them.

Environmental concerns about protecting the desert are making it difficult to get these projects built. Also a freeze in the financial markets already has prevented at least one geothermal company from obtaining capital to start construction on an approved project in the Imperial Valley.

"The economy is working against what we are trying to do," said Robert M. Doyel, lands branch chief with the U.S. Bureau of Land Management.

Many Applicants

California is fielding a deluge of renewable-energy proposals. The federal Bureau of Land Management has 154 applications from prospective solar, wind and geothermal power developers requesting access to almost 1.5 million acres in its California Desert District that includes parts of San Bernardino, Riverside, Imperial, San Diego and Kern counties.

Not all the applications will become operating power plants. Greg Miller, the bureau's renewable-energy program manager for that district, said many wind companies want only to test the resource.

Miller said besides, the process of getting approval is so daunting that it is likely some applicants will give up. Part of the delay, he said, stems from the bureau's inexperience with vetting solar projects planned for federal lands.

"Because solar energy development on BLM land is so new, there are many issues cropping up that we have to address on the fly," he said. The myriad of issues, he said, range from the impact on desert tortoises to potential desert erosion. Also, he said the bureau is not staffed to deal with the flood of applications.

In an effort to weed out speculators, the Independent System Operator late last year required a hefty deposit from applicants waiting for transmission connection -- with the result that about half the projects dropped out.

Simplifying Steps

The governor and state legislators are trying to speed the development of renewable-energy projects by consolidating the approval process, which is now fragmented among numerous state, federal and local government agencies.

"Simply setting a goal isn't sufficient unless we aggressively remove barriers to siting and transmission and actively encourage the industry here in California," said State Assemblyman Paul Krekorian, D-Burbank.

Krekorian is co-sponsor of Assembly Bill 64, which would, among other things, establish a single state agency in charge of approving renewable-energy generation and transmission projects.

Schwarzenegger in November ordered state agencies to work together in reviewing renewable-energy projects. He also signed a memorandum of agreement with the federal Bureau of Land Management and the U.S. Fish and Wildlife Service for state and federal agencies to jointly streamline the approval process for such projects in the Mojave and Colorado deserts.

Transmission arguably remains the biggest obstacle to the development of renewable energy because of the need to carry electricity many miles from remote areas where it is produced to population centers.

Larry Grogan, a former Imperial County supervisor and longtime energy industry consultant, said "the first ones (renewable projects) with resources and financing will get onto the transmission lines and the rest will have to wait."

O'Brien of the California Energy Commission said clearly more lines will have to be built for all the new generation planned by 2020.

Sunrise PowerLink, a $1.9 billion, 120-mile transmission line designed to bring wind, geothermal and solar power from the Imperial Valley to San Diego won approval last month from the Public Utilities Commission after a three-year struggle by the developer, San Diego Gas & Electric.

That transmission line was approved after it was rerouted around a state park. It is expected to go into operation in 2012.

The Los Angeles Department of Water and Power also faces opposition to its plans to route transmission from the Imperial Valley to Los Angeles.

Geothermal Gem

"In my opinion, Imperial County will be the renewable capital of the country," said Vince Signorotti, vice president of land management for Terra-Gen, a renewable-energy development company looking for solar and geothermal sites in the area.

The Imperial Valley's most valuable resource, the experts say, is a rich underground reservoir of hot water near the Salton Sea. Steam extracted from briny water is pushed through turbines to produce electricity.

Currently about 400 megawatts of geothermal electricity is produced in the Imperial Valley and an estimated 2,000 megawatts of additional power remains to be tapped.

Mark T. Gran, vice president of Cal Energy, the largest geothermal plant operator in the Imperial Valley, said in anticipation of the new transmission the company plans to double its current geothermal energy production at the Salton Sea, building an additional 50-megawatt plant each year for the next dozen years.

Southern California Edison is a major customer of geothermal energy produced at the Salton Sea. The company is also building a $2 billion transmission project, with anticipated completion in 2013, to spur development of up to 4,500 megawatts of wind power in the Tehachapi region.

Southern California Edison Vice President Stu Hemphill said the company is relying on a provision in the state mandate that allows utilities that can't deliver 20 percent renewable energy to its customers next year to make up the shortfall by contracting to buy power from projects still on the drawing board.

"The question is how many of them will actually deliver and when," Hemphill said.