Green vs. Green

USA Today updates the rest of the USA today on the fight in the Mojave between the supporters of Tortoises for Global Warming™ and the anti-AGW environmentalists.

The headline and the first paragraph say it all:

Solar plans pit green vs. green
By Keith Matheny

Plans to create huge solar energy plants in the deserts of California, Arizona, Nevada and elsewhere in the West are pitting one green point of view vs. another.

The There’s really nothing new for those who have followed the controversy for the past two years, but the article does update the score: 9 projects approved and 2 pending (plus 2 approved in Nevada). It also mentions “More than a dozen other utility-scale solar projects are in the permitting pipeline in California, Nevada and Arizona.”

The article does briefly mention the controversy over Ivanpah — as well as its $1.37b in Federal loan guarantees — but not the planned IPO of its intended operator, BrightSource.

I’d commend Matheny (of the Palm Springs Desert Sun) for bringing this to a national audience, but Ivanpah alone has been covered a few dozen times in the New York Times. Still, any publicity on the issue is good for the public policy debate over the serious tradeoffs here between the predicted (although not provable) impacts on AGW or certain endangered species.

Cashing out on Mojave solar bonanza

BrightSource Energy — the Oakland-based builder and operator of California solar thermal plants — has filed for a $250 million IPO. The S-1 doesn’t say how many of the 94.3 million shares it plans to sell

According to its S-1, the company was losing $40+ million/year but last year losses rose to $71.6 million with cumulative net losses of $177.3 million. The company did end the year with $37.8 million in cash equivalents on hand. But the S-1 says “executing on our pipeline and expanding our business requires significant additional capital.”

The S-1 said that it‘s signed 14 contracts with PG&E and/or SCE to deliver 2.6 GW of solar capacity. The first of these is the Ivanpah project, with a gross capacity of 392 MW on 3,600 acres near Baker in the Mojave Desert, on the I-15 between Los Angeles and Las Vegas.

The S-1 says this is the first of the company’s projects, with construction begun in October 2010, the first phase due in 2013 and the remainder in 2014. The project received a $1.6b loan guaranteed by DOE, as well as $300 m in equity from NRG Solar, $168m from Google and $130m from BrighSource.

Veteran solar scribe Ucilia Wang sees this as a multi-million dollar bet on Ivanpah — and that seems like a good way to interpret it. The success of Ivanpah (and Coalinga Solar-to-Steam) are essential to getting financing for the remaining projects.

Some have questioned whether solar thermal (such as the BrightSource solar tower) can be cost competitive with PV in the long run. That’s not the real question: can BrightSource execute on its current plans (without internal or external delays) and deliver the contracted energy reliably?

Assuming there are no loopholes in the contracts, the Power Purchase Agreements are (by design) bankable revenue sources — representing the desperation of California utilities with the RPS gun to their head, buying from (thus far) the only gigawatt-scale game in town. Still, it’s hard to see how a successful IPO for BrightSource helps any of the PV companies, or for that matter those of the solar thermal operators who lag BrightSource by several years.

Tortoises for Global Warming (tm)

I’ve previously written about the perverse goals of some environmentalists and politicians to block RE development protect wildlife. or, worse yet, to save views in Cape Cod or the Mojave Desert. Some of the same activists who want government to force through spending and approval on RE facilities cringe when there’s a tradeoff between reduced CO2 emissions and other environmental goals.

The NYT’s green blogger, environmentalist Todd Woody, does an unusually good job of capturing both sides of this dilemma in his blog posting and article today about how more than 4 gigawatts of newly-authorized capacity (mostly solar thermal) will likely transform the Mojave Desert — despite repeated objections by the Sierra Club and other environmentalists.

The flashpoint of the Mojave controversy is the California Desert Tortoise. As Woody writes:

The protected desert tortoise has become the totemic animal for environmentalists fighting to ensure that the huge solar farms don’t eliminate essential habitat for the long-lived reptile and other wildlife, like the bighorn sheep and flat-tailed horned lizard.

The tortoise has been in decline for decades, and the rampant development of the desert – from casinos and strip malls to subdivisions and off road recreational vehicle areas – took their toll long before construction began late last month on the Ivanpah solar power plant, the first large-scale solar thermal project to be break ground in the United States in 20 years.

However, as Woody also notes, the new plants will provide resources, funding and data to better understand the tortoise and how to preserve it. (In other words, much as building a shopping center sometimes funds archaeological digs that otherwise would not have happened.)

The article suggests that the controversy is far from over. In the short run, it may get stronger as Gov. Brown appoints one or more wildlife environmentalists to replace Schwarzenegger appointees who consi entire favor RE over wildlife. In the long run, the actual evidence gathered by the newly-funded scientists should resolve the debate one way or the other.

America's RE problem: consistency, not dollars

Over the weekend, the NY Times ran an article summarizing the great building boom of utility-scale solar projects for the Mojave desert that has been approved in the past 60 days.

It minimized the difficulties the developers have faced getting federal, state and local approvals, and instead focused on the gun to their head: the looming expiration of federal subsidies.

As reporter Todd Woody wrote:

The Ivanpah plant is the first of nine multibillion-dollar solar farms in California and Arizona that are expected to begin construction before the end of the year as developers race to qualify for tens of billions of dollars in federal grants and loan guarantees that are about to expire. The new plants will generate nearly 4,000 megawatts of electricity if built — enough to power three million homes.

But this first wave may very well be the last for a long time, according to industry executives. Without continued government incentives that vastly reduce the risks to investors, solar companies planning another dozen or so plants say they may not be able to raise enough capital to proceed.

“I think we’re going to see a burst of projects over the next two months and then you’re going to hear the sounds of silence for quite a while,” said David Crane, chief executive of NRG Energy, on Wednesday after he announced that his company would invest $300 million in the Ivanpah plant.
…
With both Democrats and Republicans promising to rein in the federal budget, it is unclear whether lawmakers will extend the programs in any form. “That could stall a number of projects and even lead to the failure of some,” said Ted Sullivan, an analyst with Lux Research, a consulting firm in New York.

Reading this in my Sunday Merc was eerie, because it exactly echoed what I read Saturday night about the beginning and end of the first wave of Mojave solar thermal development during the 1980s, where the nine plants of the Solar Electricity Generating Systems developed by Luz International once accounted for 95% of the world’s solar electricity generation capacity.

Writing in a technical report for Sandia National Laboratories, Luz’s former business development VP, Michael Lotker, summarized how the company was repeatedly forced to plan its projects in between the institution of subsidies (such as RE tax credits) and their expiration. Often this meant that a 18 month project had to be completed in ten months — and in one case seven months — as the company was squeezed between knowing that the credit was available and the deadline for generating electricity before the credit expired.

Knowing that Luz had a gun to its head, investors, suppliers and even the unions exploited the company’s desperation knowing that it had to agree to almost any terms to make the project happen. As a result, the company ran out of money, which helped discourage any future company from taking the risks that it did.

If the government is paying for something — whether directly via procurement contracts or indirectly via tax subsidies — it has a strong interest in helping its suppliers (in this case of renewable energy) improve their efficiency. More efficiency is a win-win — either the government can get more of it supplied or it can get the same quantity at a lower price. So with the unpredictable, irregular or erratic policy — such as “temporary” credits renewed one year at a time — pushes up costs both for the firms and the society that is subsidizing those firms.

Both Woody’s story and the earlier report by Lotker highlight an important point for US renewable energy policy: the most important thing (as with any policy that impacts business) is consistency and predictability.

Temporary pause in policy schizophrenia

On Wednesday, the California Energy Commission approved the 250MW Beacon solar plant . This 2000 acre project about 17 miles north of Edwards Air Force base is in Kern County, at the West edge of the Mojave Desert.

The plan is the first utility-scale solar thermal project approved in California since 1990, and when complete would nearly double the 350 MW of solar thermal capacity near Kramer Junction.

On the one hand, I’d like to be encouraged. The CEC claims to care about greenhouse gasses, renewable energy, keeping generating capacity (and operating jobs) in state, etc. etc.

On the other hand, it’s far easier for a government agency to say “no” in our litigious, regulation-driven society. Whether it be the impact of wind generation on luxury home views or migrating birds, competing values often are used to sabotage reasonable efforts to create long-term green energy infrastructure.

The CEC is hardly done, as there are many other projects planned for the Mojave, with ideal insolation due to low humidity and low latitudes, and located near the demand (and transmission facilities) of the LA metropolis.

Even if the CEC is reasonable, there is still the threat of federal regulators (or politicians) making land use decisions to rule out these ideal locations for what should become gigawatts of RE capacity.

So this week's outcome is a step in the right direction. But it’s only one step of many.

Route 66 views are more important than clean energy

The NYT report Tuesday covered several angles I hadn’t seen on Sen. Diane Feinstein’s bill to block solar energy development in the Mojave Desert.

First, it said that Feinstein’s concerns is not protecting flora and fauna, but aesthetics — having solar panels out there would look ugly. Of course, to renewable energy advocates the prospect of large facilities satisfying the energy needs of entire cities is quite attractive — and this is certainly not something that has discouraged the Germans or Spaniards. (Perhaps the senator should travel more). But this is also the argument that is often made against windmills on ridgelines.

Secondly, the article noted that even the prospect of legislation has killed the idea of developing solar farms in that part of the Mojave. In the face of uncertainty — high political risk — solar entrepreneurs have stopped working on projects for the area. When we teach business, we normally think of political risk as something that happens in third world countries, but of course it’s a problem in any context where the government is heavily involved in the market.

The article summarized a visit by Feinstein and her entourage to prospective solar sites in the Mojave:

As conflicts over building solar farms in the Mojave escalated earlier this year, Mrs. Feinstein trekked to the desert in April. …

The presentation over, the entourage rolled on to the next solar project site to hear the developer’s pitch. Mrs. Feinstein gave the developers a hearing but was not moved by their arguments, according to five people present on the tour. The senator seemed concerned about the visual effect of huge solar farms on Route 66, the highway that runs through the Mojave, they said.

Third, while this is an awful idea — legacy-building by a US senator who will be 79 when her current term expires — few Californians (union, solar, environmentalists, government officials) are willing to say so for fear of political retaliation. (Again, another example of why governing based on political influence and whim rather than policy is a terrible idea.)

Fourth, despite what renewable energy advocates said about George W. Bush, a Bush-era effort pushed for more solar development in the Mojave and other Southwestern deserts to meet society’s energy needs with renewable energy. (I guess the common thread is that if there’s something private industry could build to provide more energy, the former oilman was in favor of it.) The NYT makes it clear that Obama and particularly Feinstein are placing much more emphasis on conservation than Bush did.

So in the end, the indictment of the Feinstein plan comes from one of the few people who’s powerful enough to stand up to the senator — the namesake of a martyred US senator and nephew of the most popular Democratic president of the past 50 years:

“This is arguably the best solar land in the world, and Senator Feinstein shouldn’t be allowed to take this land off the table without a proper and scientific environmental review,” said Robert F. Kennedy Jr., the environmentalist and a partner with a venture capital firm that invested in a solar developer called BrightSource Energy. In September, BrightSource canceled a large project in the monument area.

This proposal is among the worst examples of NIMBY-ism. Society wants and needs renewable energy, but various interests game the system to say “sure, but not in my back yard.” Laws are passed based on the intense opposition, overriding a more diffuse public need; hearings will be about saving the views and the flora and fauna, not the difficult it creates for meeting the state and country’s renewable energy goals.

As RFK Jr. notes, the Mojave is the best solar land in California and perhaps the world. There are many other scenic desert vistas in the United States — but further from large power-hungry metropolitan regions.

Perhaps Californians might have to drive to Utah or Arizona or New Mexico to see such vistas — or into one of the thousands of acres of existing monuments in California. But if it were put to a vote of California voters, I think the decision would be overwhelmingly in favor of using the desert for renewable energy rather than a monument to one senator’s political clout.

Feinstein strikes a blow against renewable energy

Setting up a fight with Governor Schwarzenegger, Senator Diane Feinstein (D-Calif.) today introduced legislation to restrict development on more than 1.3 million acres of the Mojave Desert. (WSJ says 1.7 million). The proposed legislation would create two new national monuments, national wilderness and extend two existing national parks.

Fights over the appropriate use of the California desert are as old as the modern environmental movement — at least 40 years. The fight has traditionally been to protect flora, fauna and their associated habitat from traditional enemies such as military tanks (at the sprawling Army’s Fort Irwin and the Marine’s Twentynine Palms bases) and off-road vehicles.

However, what’s new is that these proposed restrictions are aimed squarely at using the California desert for renewable energy generation. With few clouds, southerly latitudes (35°-36° North), and located 50-100 miles from downtown LA, the Mojave is ideally situated for providing solar power for the 13 million people in metropolitan Los Angeles, as well as the larger five-county Greater Los Angeles that holds half the state’s population.

It is thus not surprising that America’s first significant utility-scale solar energy plant — the Kramer Junction Solar Electric Generating System — was developed in the Mojave more than 20 years ago. In addition to this 165 MW solar thermal facility, a new 553 MW facility is planned by the same operators to sell renewable energy to PG&E.

Other parts of the Mojave are well suited for wind energy. The Tehachapis (at the west end of the Mojave) are one of California’s two major wind energy producing regions, along with the Altamont Pass east of Oakland.

Some might wonder whether renewable energy is an unintended victim of restrictions aimed at off-road vehicles, but public statements in the LA Times report make it clear that the damage is quite intentional:

During a tour of the area Sunday, David Myers, executive director of the Wildlands Conservancy, scrambled up a rocky hill at the base of a row of snaggletoothed mountains freckled with clumps of brittlebush.

"Heroic country, isn't it?" he said. "Just a few months ago, there were plans to cover this entire landscape with solar and wind farms. Instead, with this legislation, we are striking a balance with the insatiable demands of population growth."

Establishing a national monument or wilderness is one of the most bureaucratic approaches that could be imagined to restrict renewable energy development: it’s not “striking a balance,” but slamming on the brakes. With the Federal protections in place, environmentalists will be able to delay or block renewable energy development for years if not decades.

California has told utilities they need to buy one third of the state’s electricity from renewable power sources by 2020. Thus the state has the proper motivation to strike a balance between two competing environmental goals — carbon-free energy production and habitat protection — in the way the Feds never will.

It would have been nice if California could have created its own state park in this region to mediate such a balance. However, that approach might have suffered the same problem as the federalization of the Mojave. Last summer, the legislature passed SB 679 (vetoed by Gov. Schwarzenegger) which would have required any land taken for non-park use be replaced by additional land — also discouraging use of the land for renewable power generation. As the governor wrote in his veto message:

Under existing law, the Director of Parks … may sell, exchange, and acquire State Park property deemed necessary for the extension, improvement, or development of the State Park system. Whether it is roads, water and energy infrastructure, or areas necessary for the installation of renewable energy facilities, maintaining the flexibility of the current process is absolutely necessary as the state continues to strive to meet its infrastructure needs for a growing population.

Up until this point, the interests of wildlife environmentalists and global warming environmentalists have usually been aligned, with rare exceptions like birds dying in the Altamont Pass windmills. These two sets of competing values — habitat protection vs. renewable energy production — need to be reconciled through open debate and our public policy process. I think the proper place to do so is at the state level, not in Washington DC. California has a proud record of being at the forefront of the environmental movement for more than a century (think John Muir).

Utility scale solar power stations will be an essential part of any realistic effort to achieve the mandate of 33% Renewable Portfolio Standard energy by 2020. Such an effort — harnessing private industry to replace fossil fuels burned every day to support our society — is more concrete than all the hot air spewed by so-called “green” politicians over the past decade. Saying you support restrictions on greenhouse gasses and renewable energy but blocking renewable energy development is dissembling even by the low standards of career politicians.

Update 4:30pm: The actual map released by Sen. Feinstein today makes it clear that most of the area being restricted is on the Eastern edge of the state. (The exception is the proposed “Sand to Snow National Monument” (an odd name) west of Joshua Tree, which seems to include ridgeline land that could be a potentially valuable wind generation region just north of the existing Palm Springs wind farm.)

The proposed national wilderness and the Mojave Trails National Monument border the Mojave National Preserve and the east side of Fort Irwin, including plots of sunny land near major electric transmission lines. As the WSJ reports:

The Mojave is particularly attractive because it not only offers nearly uninterrupted days of bright sunshine in a sparsely populated area, but lies near a major electric-transmission corridor from California to Nevada.

In addition to the I-15 corridor to Nevada, the restrictions would overlap the I-40 and Route 66 corridors to Arizona. If, as the WSJ notes, a major environmental concern for large renewable energy plants is building new roads to access the plants, then the corridors along these three national highways should be a high priority for energy development.

We’ll see how “balanced” this proposal is when we hear from the governor and electric utilities. My guess that solar entrepreneurs will be too scared to openly oppose the Feds, in case the legislation passes and they have to beg the Feds for the right to develop in one of the national monuments.

Environmentalists against solar energy

Normally when it comes to environmental policy, the renewable energy industry is on the side of the angels. A rare exception is Sen. Diane Feinstein’s imminent proposal to block off portions of the Mojave Desert from renewable energy projects.

As the AP summed it up:

California's Mojave Desert may seem ideally suited for solar energy production, but concern over what several proposed projects might do to the aesthetics of the region and its tortoise population is setting up a potential clash between conservationists and companies seeking to develop renewable energy.

Nineteen companies have submitted applications to build solar or wind facilities on a parcel of 500,000 desert acres, but Sen. Dianne Feinstein said last Friday that such development would violate the spirit of what conservationists had intended when they donated much of the land to the public.

Feinstein said she intends to push legislation that would turn the land into a national monument, which would allow for existing uses to continue while preventing future development.

The main focus on the controversy has been on solar energy. The Mojave is the site of America’s first commercial-scale solar (thermal) energy system, the nine plants of the Solar Electricity Generating Systems dating back to 1985. The 354 MW capacity were once the largest in the world.

However, the desert is not far from the wind farms of the Tehachapi Pass, which with more than 4000 turbines is said to be the 2nd largest collection of wind generators in the world (after the Bay Area’s Altamont Pass). Depending on the boundaries, the monument might impact either wind generator or transmission.

While exacerbated by the increased clout of environmentalists in the White House and and Congres, the controversy has been simmering for a while.

Nearly 12 months ago at the Yale Climate Change Conference, Gov. Schwarzenegger blasted environmentalists. It was in the context of the San Diego’s planned powerline to Imperial County, but it would also apply to this month’s dispute:

One energy expert the other day said that the California Mojave desert which is a vast space with thousands of square miles is one of the best spots on planet earth for solar power plants. Pacific Gas & Electric wants to put three huge solar plants right there. And the whole world the Germans, the French, the Canadians, the Japanese they all want to come out to California and put solar power plants in the Mojave desert and in other places. The only thing is that the problem is getting that new energy to the power grid because of environmental hurdles.
…
What they have here is a case of environmental regulations holding up environmental progress. I don't know whether this is ironic or absurd. But, I mean, if we cannot put solar power plants in the Mojave desert, I don't know where the hell we can put it. (Applause)

Ladies and gentlemen, this is the real world. We have to make some tradeoffs. I think both the environmental activists and their opponents cannot let "perfect" become the enemy of "possible," because the fact of the matter is nothing is perfect. Solar still needs transmission lines.

The governator is well-informed. For now, utility-scale plants appear to be the future of solar energy generation in California (if not the Southwest), and those plants require land that has high insolation, proximity to population centers and transmission lines back to those cities.

Moving the panels out of California will increase the transmission costs — both in terms of capital costs and transmission losses. It will also make it harder for California utilities to meet their 2020 renewable energy mandate.

Even the progressive editorialists of LA Times are skeptical:

We'll withhold judgment on Feinstein's monument proposal until she actually produces it -- the senator is still studying which lands to protect in a swath between the Mojave National Preserve and Joshua Tree National Park. The decision-making process presents a welcome opportunity for dialogue about balancing the need for renewable power with the need to conserve sensitive lands.

Yet perhaps it's possible to love the desert too much; if we go too far in protecting it from solar development, those wide arid spaces promise to become a lot wider in the scorching future.