Article

Land of the free?

Just east of the Columbia River Gorge National Scenic Area on the Oregon-Washington border, one can't drive down I-84 without noticing turbine after turbine peeking out from the crest of the hills. But even as wind farms in Oregon and Washington set a new record for power production in August 2009, renewable energy developers are looking to lay claim on the latest prime spots for power projects. While solar and other renewable energy companies are anxious to take advantage of federal grants, state tax credits and plentiful opportunities thanks to state renewable energy portfolios, gaining access to suitable land is tougher than ever.

Just east of the Columbia River Gorge National Scenic Area on the Oregon-Washington border, one can't drive down I-84 without noticing turbine after turbine peeking out from the crest of the hills. But even as wind farms in Oregon and Washington set a new record for power production in August 2009, renewable energy developers are looking to lay claim on the latest prime spots for power projects.

While solar and other renewable energy companies are anxious to take advantage of federal grants, state tax credits and plentiful opportunities thanks to state renewable energy portfolios, gaining access to suitable land is tougher than ever. And the next few years could be critical, as new technologies try to prove themselves and federal and state land agencies wrestle with the red tape of green-lighting a clean energy infrastructure.

For companies looking to build large-scale renewable energy projects, figuring out where to put them is a lot less glamorous than demonstrating a new technology or scoring high-profile utility deals. It may be less exciting to talk hectares than heliostats, but developers are finding that land use and its attendant legal and permitting issues are a sticking point... more [truncated due to possible copyright]  

Just east of the Columbia River Gorge National Scenic Area on the Oregon-Washington border, one can't drive down I-84 without noticing turbine after turbine peeking out from the crest of the hills. But even as wind farms in Oregon and Washington set a new record for power production in August 2009, renewable energy developers are looking to lay claim on the latest prime spots for power projects.

While solar and other renewable energy companies are anxious to take advantage of federal grants, state tax credits and plentiful opportunities thanks to state renewable energy portfolios, gaining access to suitable land is tougher than ever. And the next few years could be critical, as new technologies try to prove themselves and federal and state land agencies wrestle with the red tape of green-lighting a clean energy infrastructure.

For companies looking to build large-scale renewable energy projects, figuring out where to put them is a lot less glamorous than demonstrating a new technology or scoring high-profile utility deals. It may be less exciting to talk hectares than heliostats, but developers are finding that land use and its attendant legal and permitting issues are a sticking point for their projects.

Case in point: stimulus funds. Two big-deal American Recovery and Reinvestment Act programs that would pour billions of dollars into renewable energy development include time requirements for construction commencement.

And the clock is ticking. The Department of Energy's loan guarantee program, which would support up to $60 billion in projects, requires construction to begin by the end of September 2011. Meanwhile, a Treasury Department program that offers a grant for 30 percent of project costs in lieu of tax credits requires construction to commence by the end of 2010.

The deadlines "are tomorrow" for developers of large-scale projects, says Katherine Gensler, manager of regulatory and legislative affairs for the Washington, D.C.-based Solar Energy Industries Association (SEIA). "That's a make or break thing for developers," Gensler says of scoring stimulus dollars.

As the deadlines creep closer, many developers are waiting for federal and state permitting agencies, such as the Bureau of Land Management (BLM), to review their applications. As for how long it could take to get the go-ahead, no one is quite sure. "So far we don't have a good answer for how long it takes because zero [utility-scale solar] projects have received a permit," Gensler says.

In general, as developers, utilities and government agencies look to bring more renewable energy online, there are a slew of legal and regulatory issues they must address. Some are familiar, as they mimic the questions that would arise when developing a conventional power plant. But some are new, and will require permitting agencies to deal with issues they may not have seen before, says Karen McGaffey, an attorney specializing in renewable energy law at Seattle-based Perkins Coie, where about 35 attorneys are focused on energy, she says. She notes that lawyers with other specialties, such as patent law, may increasingly find themselves working on renewable energy projects.

"Ten years ago it's the kind of thing they might be doing for dot-coms," McGaffey says.

The situation is similar in the Southwest, says Franc Del Fosse of Phoenix-based Snell and Wilmer, which has about 30 attorneys working on energy-related matters, including representing utilities, power producers and project developers. It's not that renewable energy projects are inherently thornier than conventional power plants, he says. But questions may arise as permitting agencies bump up against new and unfamiliar technologies.

"With any technology [or project] there will be particular issues that arise," McGaffey says. Between conventional power plants and renewable plants, "the legal issues aren't different, it's about facts and circumstances. ... In the future I think it will be more an issue of applying legal rules to new circumstances. I think more agencies will find themselves dealing with issues they've never dealt with before."

But one area in which renewable energy may create unique legal issues is in requiring agencies to balance broad environmental benefits with specific environmental consequences, McGaffey says-a situation that may see environmental groups on both sides of an issue.

Land use or no use?

Large-scale power projects of any kind are almost always met with resistance, and renewable energy projects are no different. Concerns over the long-term impacts of such developments on human health and the environment must always be answered. And while most people recognize the big picture benefits of renewable energy, individual projects have consequences. For now, permitting bodies usually take a case-by-case look at such issues, though as more projects come up for consideration and agencies gain more experience, it may be possible to develop rules and guidelines for common issues.

In general, observers say land-use issues aren't necessarily holding up projects, but the lengthy process of figuring out the land-use details for renewable energy projects is something that's still being sorted out by federal and state agencies and developers alike.

Conventional energy projects, including coal and hydro, have benefited from their share of federal subsidies and access to cheap public land. But the renewable energy industry, thanks to a heightened awareness of climate change and reducing U.S. dependence on foreign energy resources, has access to millions of acres of land-not to mention abundant offshore territory-owned by BLM.

Gold rush

The quest for prime real estate for renewable projects, both public and private, in the United States is perhaps most visible in the Southwest, as solar developers look for places to deploy massive utility-scale projects. Many are looking to the region's abundant public lands: As of mid-2009, the BLM said it had received applications for 470 renewable energy projects. Of those, 158 were for solar projects, which would be capable of producing 97,000 megawatts (MW) of power if they are all completed.

"I wouldn't call it a land rush, but there are a lot of people out there looking for sites," says David Lazerwitz, an attorney and partner in the Environmental Law Department at Farella Braun + Martel in San Francisco.

The challenge for solar developers looking for a location is matching up solar resources with other infrastructure needs, such as transmission, while looking for any issues that could scuttle a potential project, Gensler of SEIA says.

In April 2009, the Natural Resources Defense Council launched an online mapping tool aiming to identify public land in the American West that is either off-limits or potentially problematic for renewable energy projects.

The organization decided to create the map after developers came to the organization asking where not to go, according to NRDC land program director Johanna Wald. It was also timely because it came as federal officials were pushing for the establishment of renewable energy zones, which would identify areas suitable for power generation and transmission projects.

But while the color-coded map may offer developers a heads-up about where not to go, figuring out where to build is still a complicated process, and one that federal and state governments are looking to streamline.

In June 2009, Interior Secretary Ken Salazar announced a series of "fast-track" initiatives intended to speed up the federal permitting process. Aiming to identify federally owned land with prime solar resources and minimal conflicts with other natural resources such as wildlife, the initiatives include creating two dozen Solar Energy Study Areas in six Western states, which could be capable of supporting 100,000 MW of solar power, according to BLM. The agency plans to fully evaluate the areas to allow for "landscape-scale planning and zoning." Developers proposing projects of at least 10 MW could qualify for priority processing.

Among the companies that are farthest along in their bids to construct utility-scale solar projects on federal land is Houston-based Tessera Solar. Its two planned concentrating solar thermal systems are slated to break ground in the Mojave Desert in late 2010, which gets the projects in under the wire for stimulus funds.

The 12- to 18-month federal land application process hasn't held up the projects, though, and is just one factor in determining the projects' timelines, says Tessara spokeswoman Janette Coates.

But not all developers view access to cheap public land as the best solution, and many are looking to tap private land options, as well. Given the uncertainty of federal land development, private land can potentially offer an expedited process. Developers still face environmental permitting issues but through lease arrangements of purchases, they can get interest in property more quickly, Lazerwitz of Farella Braun + Martel says.

Public lands, however, have real allure, especially for large solar projects. BLM can offer large tracts of flat land with valuable solar resources and transmission access. Getting enough land from private sources could require dealing with multiple landowners, an issue most wind developers are quite familiar with.

In seeking locations for their plants, Tessera explored the possibility of private land. Oakland, Calif.-based BrightSource, the other solar company that is as far along in the federal permitting process as Tessera, has opted to seek both public and private lands, and in 2009 made a deal with a Nevada-based land developer to deploy its solar power tower technology on private land [see "Power of two," Sustainable Industries, May 2009].

But while the company awaits permitting for its planned plants on public land-slated to produce 2,600 MW of power for Pacific Gas and Electric (NYSE; PCG) and Southern California Edison (NYSE: EIX)-eSolar in August 2009 fired up the country's first solar power tower: a 5 MW plant in California's Antelope Valley.

By siting its projects on parcels of privately owned land that have already been disturbed, Pasadena-based eSolar says it is avoiding some of the conflicts that may ensnare other utility-scale renewable projects.

In Washington, where wind power replaces solar as the region's top renewable power generator, problems can arise because areas with rich wind resources are not near load centers, and are seen as not necessarily benefiting the local population, says Stephen Posner, compliance manager for the state's Energy Facility Site Evaluation Council (EFSEC).

Established in the 1970s to balance public interests with the need for new energy production, EFSEC evaluates any proposed plant greater 350 MW and makes recommendations to the governor about whether to approve or deny projects. Renewable developers also have an option of going through EFSEC, rather than local processes.

Alternative energy projects of any size can choose to go through the board and do so for two primary reasons, Posner says. First, if a project is expected to be controversial at the local level, or to be opposed by local officials, a developer may opt for the EFSEC process. "We have the authority to preempt local government decisions," he says. The council "gives the state the jurisdictional authority to look at the bigger picture."

Secondly, if there is a legal challenge to a project that has gone through EFSEC, the case goes directly to the state supreme court, rather than winding its way through the lower courts.

That's what happened recently with the proposed Houston-based Horizon Wind Energy's Kittitas Valley Wind Power Project in Central Washington, one of four wind projects that EFSEC has either reviewed or is reviewing. The 100-MW wind farm initially applied for permits in 2003. Slated for development on mostly private ranchland, it drew opposition from area residents concerned about turbines' proximity to homes.

After the project was approved by EFSEC and Gov. Christine Gregoire in 2007, a legal challenge led to the Washington State Supreme Court reviewing the case, and in late 2008, a ruling to uphold the governor's approval. Expected to cost about $250 million, commencement of project construction is currently dependent on securing purchasers for the project's electricity, Horizon chief development officer Andrew Young says. The approval process for the project was longer than usual, but Horizon-which operates more than 2,300 MW worth of wind farms-is able to ride through delays by maintaining a diverse portfolio of projects, Young says.

Despite the current uncertainty of securing land for renewable projects, observers say the process may get easier as new policies are implemented. And once early projects reach completion, they're likely to pave the way for future projects as business and government learn the ropes of getting large-scale renewable sources online. The BLM and other agencies may be grappling with how to deal with a barrage of applications, but there's a lot of political drive to figure out how to regulate and govern the process, Lazerwitz says.

Coates agrees. "It's a learning process for everyone."


Source: http://www.sustainableindus...

OCT 5 2009
http://www.windaction.org/posts/22508-land-of-the-free
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