Interior Dept. approves first solar projects on federal lands

By Juliet Eilperin and Steven Mufson
Washington Post Staff Writers
Wednesday, October 6, 2010

The Interior Department approved the first solar projects on public lands Tuesday, a move aimed at shifting the type of energy development on federal property in the years to come.

The two ventures green-lighted in the Californian desert - the Imperial Valley and Chevron Lucerne Valley solar projects - could provide energy for hundreds of thousands of homes, though neither would start generating electricity for more than a year, at the earliest.

"We have opened up a new chapter on renewable energy on our public lands in America," Interior Secretary Ken Salazar told reporters in a conference call, adding that when it came to producing energy on federal lands, "the president asked me to change the game."

Salazar's upbeat pronouncement follows a dismal summer of scrutiny, in the wake of the Gulf of Mexico oil spill, of the way his department has handled offshore oil regulation.

But it belies the worry among renewable-energy executives and some environmentalists that the administration is not moving swiftly enough to deliver on its promises for solar and wind energy development.

Those projects still face hurdles. The Imperial Valley solar project, for example, hinges on a new multibillion-dollar transmission line that crosses sensitive habitats.

Many companies also have complained that the administration has been slow to issue promised loan guarantees. The Solar Energy Industries Association says that only one loan guarantee has been issued under Section 1705 of the federal program and that 13 others are still "conditional."

Another section, called the Financial Institution Partnership Program, has also resulted in just one loan guarantee. One applicant that has been awaiting approval for nine months is the 905-megawatt Caithness Shepherds Flat wind power project in Oregon, the largest under construction in the world. It has already ordered General Electric turbines and sealed sales contracts with utilities.

Energy Department spokesman Stephanie Mueller said the department has made "commitments" for $23 billion worth of projects. "We will continue to increase the pace with which we approve these projects while ensuring that we are spending taxpayer dollars responsibly," she said.

Renewable energy projects must start before Dec. 31 to qualify for federal grants under the American Recovery and Reinvestment Act. Earlier this year, Bureau of Land Management Director Bob Abbey testified that the agency hoped to sign off on 34 such projects before the end of 2010; on Tuesday, BLM officials said they may approve 14 at most.

"We're making progress, but I think we have a long way to go," said Jim Lyons, senior director for renewable energy at Defenders of Wildlife, an advocacy group. Lyons noted that federal incentives such as tax credits and loan guarantees are often little help to the kind of startup companies hoping to develop on public lands. "An outright grant can be critical to ensuring their viability as a company," he said.

The solar-thermal project in Imperial Valley would rank as one of the world's largest solar projects, providing as much as 709 megawatts of electricity from 28,630 solar dishes that could power 212,700 to 531,750 homes. The 45-megawatt Chevron Lucerne Valley project, which will occupy 422 acres compared with Imperial's 6,360 acres, will use photovoltaic solar panels to provide electricity to 13,500 to 33,750 homes.

The Imperial Valley project has sparked controversy among environmental groups, in part because it could imperil habitat for the desert's flat-tailed horned lizard and bighorn sheep. After several groups filed a formal protest this summer, the company behind the project - Arizona-based Tessera Solar - made several concessions, including promising to set aside 6,000 acres for the two species and to use wastewater from a nearby water-treatment plant for its operations.

Lyons called the venture "far from ideal" but added that, "viewed as a pilot project, we can live with it."

On a practical level, though, the Imperial Valley project has secured transmission lines for only 300 of its planned 709 megawatts of power.

"We know transmission is a huge issue," Salazar told reporters.

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