March 17, 2012

California lawmakers explore desert ‘green’ zone

Written by K Kaufmann, The Desert Sun, 17 March 2012

The weather in the Coachella Valley performed perfectly for the kick-off of Assemblyman V. Manuel Pérez’s renewable energy tour Friday, with a brisk wind spinning through hundreds of turbines in North Palm Springs as if on cue.

Pérez, D-Coachella, was in town with a small busload of state legislators and area energy leaders as part of a fact-finding mission for his Select Committee on the Renewable Energy Economy in Rural California.

After the Palm Springs stop, the group headed to Imperial County for tours of a solar project in Niland and a geothermal plant in Calipatria, followed by a public hearing in El Centro.

Assemblymen Das Williams, D-Santa Barbara, and Jose Solorio, D-Santa Ana, were also on the tour, where the main topics were promoting more renewable energy development and green jobs in the region and focusing on any roadblocks in the way.

“I prefer we build here, keep jobs here,” Pérez said.

Fritz Noble of Wintec Energy, a company that pioneered wind farms in the San Gorgonio Pass 30 years ago, pointed to ongoing concerns about lack of transmission lines.

“Transmission constrains maximum generation,” he said. “We have projects we’d love to do, but we can’t.”

Devers-Palo Verde 2, a new transmission line Southern California Edison has under construction to hook up with large-scale solar projects east of the Coachella Valley is already at capacity, he said, and it’s not expected to come on line till next year.

“The queue is clogged,” he said.

At the hearing in El Centro, Neil Millar, director of infrastructure development for the California Independent System Operator, which controls power flows on the grid, confirmed that he has applications for grid connections from renewable energy projects totaling more than 46,000 megawatts.

Some of the other issues raised during the day:

• Natural gas: A repeated theme during the day was the growing threat to renewable energy development from the plunging prices of natural gas.

In the past four years, natural gas prices have fallen from $12.50 per million British thermal units – the standard measurement for natural gas – to $2.30, said Jonathan Weisgall, vice president at MidAmerican Energy Holdings Company, who spoke at the hearing in El Centro.

“It’s crowding out renewable,” he said.

“This is a very risky business,” agreed Mark T. Gran, vice president for community relations for CalEnergy Operating Corporation, which runs 10 geothermal plants near the Salton Sea. “When utilities go out, they’re looking for the cheapest price. “

The irony, he said, is that geothermal power provides stable, reliable power, filling in the gaps of intermittent solar and wind and making fast-starting natural gas peaker plants less necessary.

• Incentives needed: While most solar and wind developers have accepted the end of federal renewable energy incentives, such as the Department of Energy loan guarantee program, they are worried about state incentives, such as the property tax exemption for solar projects.

At the Sun Peak solar project in Niland, a 23 megawatt project coming on line in April, Pérez heard from company CEO David Rennie that he and other solar developers are already worried that the exemption won’t be renewed when it expires in 2016.

Without the incentive, “we don’t know if we’re going to be able to finance,” he said.

• The mix: Renewable energy producers said California’s aggressive goal to produce 33 percent of its power from renewable by 2020 was working in driving solar, wind and geothermal development in the state.

But they said, utilities are not balancing the kinds of power they are buying to keep reliable supplies on the grid.

Andy Horn, director of natural resources development for Imperial County, suggested a carve-out in the state’s renewable energy standard to ensure utilities had to balance their solar and wind supplies with geothermal.

“We think geothermal should be given equal consideration,” he said. “It can be brought on line.”

The utilities are supposed to buy energy on the basis of “least cost, best fit,” Weisgall said. “The role of the investor owned utilities is to look at value. Cheap is not necessarily value.”

Pérez said state policies might be able help keep the state’s renewable energy supplies diversified, but they would have to be carefully balanced to ensure affordable electric rates.

“We can’t intervene where it hurts the market, where it hurts families,” he said.

URL to article: