Nevada's choice: Use natural resources to go green or perish

With its brilliant sunshine, whipping winds, geothermal hot spots and vast tracts of empty land, Nevada has long held promise as a potential center of green power.

But even after years of talk about how the Silver State can capitalize on its natural renewable resources, the state still gets just 10 percent to 12 percent of its energy from green projects.

So what will it take for Nevada's renewable-energy sector to take off, and could 2011 be the banner year green-power advocates have been waiting for?

Tom Fair, NV Energy's vice president of renewable energy, stops short of forecasting 2011 as a breakthrough year for green energy.

But he did say Nevada's renewable-power sector is nearing a tipping point that will yield big strides in the next couple of years.

Consider NV Energy's performance on meeting the state-mandated renewable-energy portfolio standard, which requires utilities here to obtain a specific share of their power from green sources.

NV Energy barely met the 9 percent threshold in 2008, Fair said. The minimum rose to 12 percent in 2009, and the utility fell short of that mark, reaching 10.5 percent. In 2010, the mandate will stay at 12 percent; company executives don't have final numbers yet, but preliminary data show the utility will surpass the year's standard, Fair said. What's more, NV Energy is set to easily exceed the 15 percent mark set for 2011. The standard is set to max out at 25 percent in 2025.

"There's no way to have a smooth increase over time, because you have projects that get delayed while others come on line," Fair said. "But we completed a number of projects in 2009 that will be fully operational through 2010, and we'll start to see the impact of all of these projects coming into play. I think we've turned the corner, I really do."

Kathleen Drakulich, an energy attorney and a partner with the Nevada law firm McDonald Carano Wilson, said 2011 likely won't be a breakout year for green power as long as Nevada lacks transmission lines to carry green power from rural generation sites to city markets where it's needed.

Green energy might not be poised for a big breakout in 2011, but Fair said he's looking toward 2013 as a signature green-power year. That's when NV Energy is scheduled to finish its One Nevada transmission line, or ON Line. The 235-mile line, scheduled to break ground later this year, will run from the company's Harry Allen Generating Station near Apex to its Robinson Summit substation near Ely. It will connect Nevada's northern and southern grids and allow NV Energy to use green energy generated in the countryside. NV Energy is building the line with New York-based electric developer LS Power, and NV Energy plans to use 100 percent of the $510 million, 550-kilovolt line's capacity.

"ON Line is a big step," Fair said. "It will unify the state and enable us to fully tap the rural renewable-energy resources of Nevada, wherever they may be."

Bolstering 2013's case is the 440 megawatts of green-power projects the Public Utilities Commission of Nevada approved in NV Energy's 2010 integrated resource plan, which outlines how the power company will obtain its electricity over the next 20 years. Developments included in the plan are geothermal, photovoltaic, wind and solar plants, including the state's first solar project with overnight thermal-storage capabilities. Combining those projects and ON Line sets the stage for 2012 and 2013, Fair said.

Drakulich agreed that ON Line will prove key to spurring renewable-energy growth in the Silver State.

"No one would go out into the middle of Nevada and build a 2,000-home development without a major highway through that development. There'd be no way to get to and from it," Drakulich said. "Renewable energy is the same way. You can't just put it in the middle of Nevada without the 'highway,' without the transmission line to deliver the power."

But maximizing Nevada's renewable potential will require going beyond ON Line, Drakulich added. The line will be an important component to providing Las Vegas and Reno with green energy, but if Nevada's officials and power developers really want renewable energy to flourish here, they'll need to add to ON Line, with additional transmission infrastructure linking the state's grids to substations in Idaho and the Eldorado Valley, south of Las Vegas. Linking to those points will give Nevada's power developers access to California's massive energy markets, Drakulich said.

Transmission lines alone won't do the trick, though.

Nevada's leaders must meet with California's officials to discuss how the Silver State might best serve the power needs of the Golden State, where a tough portfolio standard requires utilities to obtain 33 percent of their power from renewables by 2020.

"Our export market really is California. They have a tremendous need," Drakulich said. "We have to figure out if we can get there with transmission lines, and if they'll buy our power. They may not be able to meet their needs on their own, and that's where we'll come in."

Still, several hurdles could delay renewable energy's progress in Nevada in 2011 and beyond.

For starters, environmental opposition to renewable projects on federal desert land could slow green power's advance, Fair said. Citizens have the right to file lawsuits blocking projects, Fair said, and they frequently do so out of concern for wildlife -- especially when solar or wind projects are involved. It can already take years to guide even fast-tracked projects through the permitting and environmental-review processes required to build on federal land.

"To what extent can federal lands be used for renewable energy projects? The jury is somewhat out on that question," Fair said. "People in Washington support the industry and want it to happen, but some citizens are not particularly happy with the idea of having a lot of major solar facilities in the Mojave Desert. Maybe these kinds of challenges and obstacles can be overcome. We'll see in the next couple of years."

Fair added that it's difficult to forecast whether such licensing and legal issues are likely to ease appreciably. He did note that laws governing development on public lands are roughly 40 years old, and have changed little since policymakers wrote them.

Obtaining financing also presents an ongoing barrier to green power.

The renewable sector is still feeling the aftereffects of the credit crunch that followed Wall Street's 2008 investment-bank meltdown. Finding the capital to build a project is as nettlesome these days as maneuvering the federal permitting process can be, though Fair said he expects tight investment markets to loosen as the economy continues to recover from its recession.

Drakulich agreed that permitting and financing will remain equally big issues for renewable projects. Building essential transmission lines relies on a lot of moving parts, all of which must come together to make a project happen, she said. A developer who wants to build transmission infrastructure must launch the permitting process at the same time he's trying to find green-power developers who'll commit to buying capacity on the line. With those commitments in hand, he can pursue financing. Drakulich called it a "two-way tie" as to whether permits or funds are tougher to come by these days.

"Transmission is not, 'If you build it, they will come.' It's on the other end of the spectrum," she said. "You have to get all of the subscriptions lined up before the creditor will say you'll get any money. Permitting is time-consuming because of all the federal land we have in Nevada."

Green-power builders must also grapple with today's political climate, which has grown less friendly to energy subsidies and tax credits. With some forms of federal aid set to expire in coming months and years, developers could find themselves unable to finish a planned project that would have relied on financing help from government agencies, Fair said.

And then there's the simple matter of resources.

Developers don't always discover the abundant power source they expect when they begin exploring an area for its green potential -- say, the proposed geothermal well that doesn't find enough steam heat, or the wind corridor that's too variable to provide affordable, steady energy. There's no policy or financial fix for that kind of problem, Fair said.

Fair said he's hopeful that myriad forms of green power will enjoy a bright future in Nevada. The industry's success will help the state diversify not only Nevada's economy, but its power sources, and any trend that reduces Nevada's reliance on a single major energy base -- in the Silver State's case, natural gas -- will help insulate consumers from fluctuating commodities prices, he said.

Building on the state's renewable-energy resources will also generate jobs and position Nevada as an important exporter of an important future power source, Drakulich added.

"People need to invest in something to help this state recover," she said. "We're looking to bring in industries with a pulse, and green energy happens to be one of them. At the end of the day, we have to put people back to work, and we have to create sources of revenue in this state. If we're creating an export market, it's not going to cost Nevadans anything."

Contact reporter Jennifer Robison at jrobison @reviewjournal.com or 702-380-4512.

WHAT’S NEW AND UPCOMING

Most of the renewables talk in Nevada revolves around solar-photovoltaic panels, geothermal wells and wind farms. But the state does claim its fair share of pioneering projects, such as NV Energy’s Goodsprings waste-heat recovery plant, which refashions exhaust from a natural-gas compression station and uses it to power a 6-megawatt generating station near the California border. When it opened in the fall, the Goodsprings plant was the first of its kind in Nevada. Here are some other innovations in the works across the state:

• Municipal solid waste to energy.This form of power generation uses a two-step process to convert post-sorted solid waste into ethanol using a plasma arc, or a laser, that essentially vaporizes the matter into a little pile of ash.

“It’s like something you’d see in a movie,” said Kathleen Drakulich, an energy attorney and partner in the Nevada law firm McDonald Carano Wilson.

Fulcrum Sierra BioFuels, a Nevada subsidiary of Fulcrum BioEnergy of California, is developing a $120 million, 21-megawatt waste-to-energy plant in Storey County, outside Sparks. The plant will yield ethanol that will go to gasoline retailers, who would then mix the blend into their fuels during the times of the year when ethanol requirements increase.

The plant is scheduled to come on line in late 2012. It should eventually produce 10.5 million gallons of ethanol a year, as well as 16 megawatts of renewable electricity. Fulcrum is talking with the U.S. Department of Energy about loan guarantees to help pay for the plant.

• Landfill gas. Waste manager Republic Services has asked Energenic subsidiary CC Energy to design, build, own and operate an 11-megawatt gas-to-energy facility at Republic’s Apex regional landfill, about 20 miles north of Las Vegas. Methane gas extracted from wells as a by-product of the landfill will be scrubbed and forced through a turbine generator to yield power for NV Energy’s customers. The project is scheduled to come on line in the fall.

• Concentrating solar power with storage. The biggest problem with the sun? Well, it sets. That tendency for solar light to disappear overnight can make it tough to incorporate solar power as a primary energy source.

Enter SolarReserve, with its Crescent Dunes Solar Energy Project near Tonopah. Crescent Dunes would be Nevada’s first solar plant with the capacity to store sun power overnight. The development would use an array of mirrors to focus the sun’s rays on a concentrating tower. As molten salt coursed through the tower, the salt would capture heat from the reflected sunlight. The plant would then store the heated salt in tanks until utilities tapped it for consumers. That storage would make solar energy available after dark.

Crescent Dunes is slated to be the nation’s first commercial solar power plant using salt storage to distribute energy after the sun sets. Its 100-megawatt capacity would be able to power as many as 75,000 homes during peak power periods. NV Energy has agreed to buy the power from Crescent Dunes.

SolarReserve is aiming to have the plant up and running sometime in 2013.

• Integrating it all. Buying renewables from 40 or 50 sources, and working those renewables into the state’s existing energy infrastructure, is harder than it sounds. To handle the job, NV Energy is conducting studies on seamlessly incorporating green power from varied and variable sources into its mostly natural gas-powered generating mix.

Among other factors, the studies will evaluate the operational effects solar power might have on the electric grid, and where the existing grid can best absorb and distribute solar energy. Plus, they’ll evaluate backup sources of power for when renewables flag (such as when the sun sets).

“Variability is something we need to make sure we can accommodate and know how to deal with,” said Tom Fair, NV Energy’s vice president of renewable energy. “We need to keep our power supply reliable.”

NV Energy hopes to finish its analysis by the middle of 2011.

“This will be a path-breaking effort that will benefit not just Nevada, but the rest of the country as well,” Fair said. “Nevada and Las Vegas are a laboratory for a lot of this. These studies will help us set the stage for what comes in 2015 and beyond.”

JENNIFER ROBISON / LAS VEGAS REVIEW-JOURNAL

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Comments

Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.

1. Thomas.Atwood Feb. 24, 2011 | 11:26 a.m. Report Abuse

   They will probably put a layer of pea gravel down to prevent soil erosion. They don't want dust swirling all over dirtying up their solar panels. Problem solved.

2. Tom.Reynolds Feb. 21, 2011 | 12:41 p.m. Report Abuse

   Let us also not forget that emissions aren't the only way humans can damage the environment. Probably the most pervasive and long-lasting form of human damage, for example, is soil erosion due to removal of ground cover. I wonder if anyone has looked at potential effects of removing the ground cover from thousands of acres in Nevada, in order to build solar facilities? I know I've heard people claim that there were plans to plant native foliage under the solar panels, but I don't believe those plants would survive with the sun totally blocked by the solar panel. I think you'd end up with a little bit of vegetation around the panel edges, and a WHOLE lot of bare, uncovered ground just waiting for the soil to be washed away by runoff.

3. Alvinjh Feb. 21, 2011 | 12:10 a.m. Report Abuse

   Are you "rational" yet? Gas prices climbing toward the administrations goal. $5.00/gallon and they think you'll be "rational" by their definition. Ride the bus. Buy a "smart" car.
   
   Wonder what they'll do about all the fat people? Walking helps. Too much cheap food. Make them "rational" too? Raise food prices.
   
   Liberals. It's what they do.

4. wilmacarter77 Feb. 20, 2011 | 11:34 p.m. Report Abuse

   It is fantastic time to refinance home mortgage. As Clark Howard says it is very tough to find these low rates for long time. Search online for 123 Mortgage Refi they found me THE lowest possible rate.

5. Thomas.Atwood Feb. 20, 2011 | 10:34 p.m. Report Abuse

   What an odd headline -- go green or perish? There is nothing in the article to substantiate that assertion. A better title would be Nevada's Future in Green Energy Looks Bright. Mr. Fair and Ms. Drakulich paint a very optimistic picture -- a win-win scenario of job creation, resource utilization and economy diversification................. I really don't understand the naysayers who complain about subsidies. Every type of energy -- coal, oil, atomic, renewable are all subsidized. At least with geothermal, solar and wind these are resources we have here in the state of Nevada................... Some people worry about the amount of land it takes to build solar generating plants. Ten years ago nobody would have cared about a few thousand acres of sage and tumbleweeds. Suddenly its an environmental issue, but you can be sure the environmentalists will work it out. Unlike some of the other energy producing industries, environmentalists are capable of working together to achieve a common goal.............. Bottom line: I drove by the gas station today and the price was $3.31/gal! You can bet that when it hits $5 or more those electric and hybrid vehicles will look mighty attractive. We will need electricity from every conceivable source to meet the demand.

6. 70aarcuda Feb. 20, 2011 | 8:38 p.m. Report Abuse

   Under my plan your electrcity rates will skyrocket....
   
   barrack hussien obama..nov. 2, 2008

7. un employed Feb. 20, 2011 | 5:05 p.m. Report Abuse

   bla bla bla i will find another place to live you can keep your podunk mormon buddies and your illiterate illegal aliens together you can build your utopia that you think you deserve .have fun nevada

8. Cherokee.Mankiller Feb. 20, 2011 | 4:56 p.m. Report Abuse

   I hope that vegaslee wasn't aiming my way... I'm not kicking the idea, rather we should be embracing it. Trouble is, we've got this enviro agenda that is so hypocritical that it would make the Pharisees look like paragons of integrity. Drilling for the geothermal wells, building the generation plants, and the transmission lines would put thousands of now out of work construction types back to work. So would maintaining the wells. But the greenies, despite their calls for cutting back on using fossil fuel, will try to block any and every attempt to bring this to fruition.

9. mrability Feb. 20, 2011 | 4:25 p.m. Report Abuse

   welcome to low level simple minded greedy and soon to fail nevadumb

10. vegaslee Feb. 20, 2011 | 3:22 p.m. Report Abuse

    Have to love it. All the RJ posting energy experts always show up. With all this talent you would think we would be the best in the nation at something. ;-) You all are good at kicking others idea's, do you have any that will work ?

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