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October 21, 2014

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DAILY MEMO::

Neighbor’s open door a boon to Nevada

Beyond the Sun

Nevada’s renewable energy industry is breathing a sigh of relief after attempts by California’s legislature to ban renewable energy imports were smacked down by Gov. Arnold Schwarzenegger.

Last week he scuttled attempts by his state’s legislature to require California utilities to acquire all or most of their renewable energy from plants in California. The Governator’s Sept. 15 executive order also, in effect, mandated that his state’s utility companies acquire 33 percent of their energy from renewable sources by 2020.

It amounted to a twofold boon for Nevada’s fledgling renewable energy industry, increasing the amount of renewable energy California utilities must pass on to customers while simultaneously opening the door for that energy to be produced in Nevada.

“Given the difficulty of building projects in California, if that state is going to meet its needs it’s going to need to get power on a regional basis,” said Geothermal Energy Association Executive Director Karl Gawell.

Renewable energy developments are cheaper and easier to get off the ground in Nevada than they are in California, renewable energy experts said. A lot of that has to do with population. Public lands are used more heavily in California than in Nevada, and Californians generally don’t like the idea of energy plants overtaking their recreation space. Land use appeals and lawsuits from hiking clubs and off-road-vehicle riders as well as nearby residents can delay projects in California for years. That’s less likely in Nevada, which has millions of acres of wide open land, Gawell said.

Nevada also has a less stringent regulatory structure. On public lands, the Bureau of Land Management’s environmental review process is usually all that’s required. And with fewer people to give input or file lawsuits, it usually takes less time. Nevada is also attractive because it has low business taxes in general and even lower taxes for renewable energy developers.

“We’ve always looked at Nevada as a great place to do business,” said Keely Wachs, spokesman for solar developer BrightSource Energy, who went on to explain that one of the reasons is “it’s close to California where there’s also great demand.”

Solar developers and insiders say they’re cautiously optimistic about how Schwarzenegger’s moves will affect them. The California Air Resources Board hasn’t indicated how it plans to implement his executive order.

But solar developers aren’t holding back on Nevada projects while they wait. Most companies planning new solar, wind and geothermal plants in the Silver State have said they plan to export at least some of the electricity they generate to the Golden State.

The BLM has received applications to develop dozens of renewable energy plants on land it administers in Nevada. All together, these plants would generate far more energy than is needed to meet Nevada’s renewables portfolio standard of 25 percent by 2025.

Gov. Jim Gibbons said through a spokesman that Schwarzenegger’s announcement came as no surprise and that he welcomes the opportunity for Nevada to export energy to neighboring states once the state reaches energy independence.

Senate Majority Leader Harry Reid’s take: “California clearly has plenty of electricity demand so with the right economic development strategy and strong public-private partnerships, we really have a great opportunity to sell affordable and clean power into that market. That means creating lots of new Nevada jobs.”

Renewable energy plants built to export energy would also generate millions of dollars in state revenue from geothermal leases on federally administered land. Half the money from land leases on geothermal plants goes directly to state coffers. New geothermal leases have generated more than $24 million for Nevada since 2007 and Congress is expecting to debate legislation this fall that would extend those revenue-sharing rules to solar and wind energy leases.

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