First-ever public lands auction for solar power plants bombs
Soft Colorado energy market dampens enthusiasm for projects in San Luis Valley
FRISCO — Leases for fossil fuel development on federal lands in Colorado are selling like hotcakes, but the Bureau of Land Management wasn’t able to tickle anyone’s fancy for a handful of 1,500-acre parcels in the San Luis Valley slated for large-scale solar development.
Unlike rooftop or backyard solar power, utility solar projects are designed to generate power on the scale of a small fossil fuel power plant by concentrating the sun’s heat and boiling a liquid to drive turbines with almost zero greenhouse gas emissions.
The BLM held the San Luis Valley lease sale in October after laboriously mapping out solar energy zones around the Southwest as part of the Obama administration’s push for more renewable energy. On the home turf of former Secretary of the Interior Ken Salazar, the Colorado lease auction was intended as a showcase for the renewable energy push spearheaded by the cowboy-booted politician.
Overall, the Interior Department’s western solar plan designated 17 solar energy zones on about 285,000 acres of public lands for commercial-scale solar development. Since 2010, the BLM has approved plans for 27 utility-scale solar energy projects with a total capacity of more than 8,500 megawatts of clean, renewable energy — enough energy to power about 2.6 million homes with carbon-free western sunshine. There are another 70 applications pending.
Along with generating renewable power, Salazar and the BLM — which is part of the Interior Department Salazar headed until last year — hoped that solar energy development would help spur some economic benefits for the San Luis Valley, one of the most rural and poorest parts of Colorado.
The three parcels slated for development in the valley could have each generated about 150 megawatts of electricity — which is about enough to charge all the cell phones in Ghana for a year, according to Ghanaweb.com. Closer to home, it’s also enough juice for about 45,000 houses, give or take a few thousand.
After the BLM finished the mapping, there was some early interest in the parcels, said Ray Brady, the BLM’S national head of energy policy.
“That was the first solar auction that we held. It was the only area where he had applications filed. There were no others in any of the solar energy zones in six other southwestern states,” Brady said.
But just prior to the October auction, a move by Xcel spoiled the endeavor. Companies that were planning to bid for the use of federal land and sell solar power to the energy giant lost their enthusiasm when Xcel announced that it would not solicit any more proposals for solar power.
According to Brady, Xcel was so close to reaching its mandated target for Colorado’s renewable energy that the company had no more need for new capacity, creating a “very soft market” for solar. That, Brady said, “really dampened the interest.”
In the pre-auction phase, the BLM received nine applications and 27 inquiries and expressions of interest in response to a March 2013 solicitation, according to Vanessa Lacayo, a spokesperson for the BLM in Colorado. By the time of the auction, all applications had been yanked. Nobody even showed up.
That made for a strange vibe at the Lakewood BLM office where the auction was held, said Andrea Guajardo, executive director of Conejos County Clean Water, Inc.
“I noticed at the sign-in that I didn’t see any developers that had checked in,” she said, adding that the auctioneer went on to offer the parcels anyway.
The turnabout between the solicitation phase and the actual auction shows that, without assurances of future tax credits, and without buy-in from monopolistic energy providers like Xcel, the renewable energy market in Colorado is wavering, at least for large-scale projects. Bottom line: when it comes to the state’s power grid, there’s still a long way to go to complete the transition to the so-called “new energy economy.”
According to community activists in the San Luis Valley, there also were other challenges.
“When you look at where the electrical transmission lines and sub-stations that are now in the San Luis Valley, it makes a lot of sense to build solar on private property,” not federal land, said Christine Canaly, of the San Luis Valley Ecosystem Council.
“Not only do counties benefit from this tax base, but it just makes sense to build something where there is existing infrastructure,” Canaly added, noting that some residents of the rural communities raised questions about visual impacts that industrial-scale solar development — including transmission infrastructure — would have on the pastoral high desert valley.
“Now that these SEZ (Solar Energy Zones) lands have been designated by BLM, they will be available for solar development into the future, but the current political climate would have to shift in order for this to become a reality,” Canaly added.
Brady acknowledged those concerns and said the BLM is now launching a community planning effort to address potential visual impacts in the valley.
The BLM learned from the failed auction in Colorado. When it puts leases up for auction in Nevada in the next few months, the agency will offer a mix of parcel size. In Nevada, the agency already has nine solar development applications in hand.
If the BLM puts the San Luis Valley parcels up for another auction, the agency is expected to tweak its marketing pitch. Its best bet, Brady said, might be to emphasize the potential for power transmission south into New Mexico rather than here in Colorado.
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