Go West, clean megawatts
Nevada stakes its renewable energy future on California.
On one of the blazing screens of Valley Electric Association's control room in Pahrump, Nev., an image pops up of what looks like a glowing rail yard on Mars: Gunmetal train cars lined up on silver tracks, the whole scene set neatly on a shimmering brown slope. Valley Electric's CEO, Tom Husted, erupts with enthusiasm at the sight. "There it is!" he exclaims. "ARES. Heard of it?"
Pronounced like the name of the Greek god of war, ARES stands for Advanced Rail Energy Storage. The concept is simple: When excess power comes off an energy source that's not always available – solar, say, or wind – that power, rather than going to waste, is used to move the rail cars up a hill to a storage yard. Then, after the wind stops or the sun goes down, the cars descend, generating electricity via regenerative braking.
ARES is the new, new thing in energy storage. It has never been put to work on a full-size electrical grid. The world's first grid-scale system will be built about three miles northeast of Pahrump on a long alluvial fan coming down from the nearby Spring Mountains.
An unincorporated town of 36,000 in northern Nye County just east of Death Valley, Pahrump is not a place you'd expect to find an energy utopia; the very name evokes the sorrowful report of a circus tuba. In Paiute, however, the word means "water in the rock," a place with a plentiful desert aquifer, where the snow on distant Mount Charleston reflects the Mojave Desert's banded sunset. Valley Electric's territory, which stretches for nearly 7,000 square miles along Nevada's western edge, boasts some of the best clean-energy resources in the world: Sunshine beaming down on a mid-elevation desert; steady, perennial winds; sulfurous steam that wafts up from fumaroles in the chalky earth, sure clues to the geothermal bounty that lies beneath.
"We believe those natural resources in Nevada that are developed properly and responsibly can mean to Nevada what other natural resources are to other states," Husted says. In other words, Nevada could indeed become, to paraphrase U.S. Sen. Harry Reid, the Saudi Arabia of renewable energy.
A couple of years ago, Husted counted up his applications for interconnection into the 350 miles of transmission Valley Electric owns, and realized that 3,000 megawatts of renewable electricity was under development in the utility's territory. "Three thousand megawatts," he says. "That's two times the output of Hoover Dam." Obviously it wasn't all for Nevada's 2 million residents. "It was to get to the markets," Husted says, "and those markets are in California." So in early 2013, Valley Electric left the Nevada in-state electrical market and made its system data and circuits available to California's grid operators; the few hundred megawatts currently generated within its territory travel south to connection points near Las Vegas, where they blend into the system managed by the California Independent System Operator.
ARES could be the perfect complement to those wind and solar megawatts. Steven Greenlee, a spokesman for the California grid authority, describes the electricity market as a continuously circulating "infinity pool" that needs to be maintained at a certain level; that effort gets trickier as more intermittent resources come online. A storage scheme like ARES would be like having a large tank next to that pool, ready in case the level dips too low. California's utilities have been ordered to add storage to their infrastructure by 2016, the better to balance a grid buffeted by wind and doldrums, sun and clouds. ARES CEO James Kelly says he hopes to have the Nevada project online just in time.
The idea seems so simple. "I'm shocked no one has thought of this before," I tell Valley Electric's system operator, Clay Calhoun, a friendly, blue-eyed man in his 30s, brimming with enthusiasm for the slick technology around him. "That's how it works," he replies. "Sometimes people win Nobel prizes for incredibly simple inventions." The possibility was always there; someone just had to put the pieces together when the world was ready.
You might say the same of Nevada's clean energy resources. It's all been here for eons. Someone just had to have a reason to harness it.
Right now, that reason is California. Husted is betting that as California utilities jettison out-of-state coal plants to meet their state's 33 percent by 2020 renewable mandate, they'll snap up contracts for carbon-free power. Southern California Edison, one of California's three for-profit utilities, has already signed on to buy power from two southern Nevada solar plants to supply about 70,000 customers for 20 years. The Los Angeles Department of Water and Power will buy a similar amount of electricity from a solar plant on the reservation of the Moapa Band of Paiutes, about an hour's drive east of Las Vegas.
But whether California utilities can buy enough electricity from Nevada to nourish a thriving new industry is no sure thing. It might be tough just to get that power to market. The lines down south are close to full; other lines don't stretch to the remote sources of energy. North of Pahrump, Husted says, geothermal wells have been drilled and capped for want of transmission.
Transmission "is sort of a chicken-and-egg thing," says Paul Thomsen, director of the Governor's Office of Energy in Nevada. "A utility wants to put generation where transmission is, but transmission doesn't go where there isn't generation." Sometimes a utility invests in transmission based on the future value of a new plant, but even that doesn't always go as planned. In 2007, NV Energy planned to construct a sprawling coal-burning facility near Ely, Nev. The utility would have leveraged the plant's future profits to build a 235-mile-long, $500 million transmission line to transport the plant's power south to Las Vegas and beyond. When NV Energy canceled the plant in 2009, the transmission went with it.
In 2009, however, Sen. Reid resurrected that line with an item in the American Recovery and Reinvestment Act guaranteeing $2 billion in loan backing for transmission devoted to renewables. The One Nevada, or "ON," Line, went into service this year. The first independent producer to wheel power over its wires, Ormat Technologies of Reno, sends electricity from its new Don A. Campbell geothermal plant to Southern California.
Both Husted and Thomsen cite the ON Line and Ormat's new plant as encouraging developments. Husted, however, has an even better idea: A proposed 300-mile line called the Nevada West Connect, which he speaks of as if it already exists. "We believe it's good not just for Nevada, not just for Valley Electric, but for California." Like coal and natural gas, geothermal produces always-on power, not subject to the vagaries of weather. As California dumps coal and turns to renewables, geothermal demand could soar and investors might rally around to build transmission.
Or not. Drilling a geothermal well is expensive, and its power-producing capacity isn't certain until drilling is complete. A Canadian company called Nevada Geothermal (now Alternative Earth Resources) nearly defaulted on an Energy Department loan in 2011 when a project came in five megawatts weaker than promised. Another geothermal company, Terra-Gen, explored, drilled and secured transmission rights at a site in Churchill County, Nev., near a plant that's been sending electricity to Southern California Edison for a quarter of a century. Three years in, the utility that had agreed to purchase the power, Pacific Gas & Electric, pulled out. After all, why go to Nevada for clean power when there's plenty available at home?
In 2011, California Gov. Jerry Brown's renewable energy director, Michael Picker, wrote a letter to the Western Electricity Coordinating Council detailing all the new renewable energy that California had planned within its borders. Spurred by stimulus funds and fast-tracking from the Interior Department, California had signed off on 11 new solar plants; he projected that by the end of 2011, 10,000 megawatts of new generation would have cleared federal and state approval.
In light of that, Picker had some concerns as to whether electricity imports would degrade California's own energy market. In Picker's estimation, California, with all its new utility-scale and rooftop solar, should be exporting electricity to its Western neighbors, not the other way around.
So far, that hasn't happened. While solar on California rooftops doubled last year, it still satisfies a tiny fraction of the state's total demand. And many large-scale solar plants in California were canceled due to costs, environmental impacts or both.
One example is the Calico Solar Project, which was in development in the Cady Mountains, 37 miles east of Barstow, Calif. Developers at K Road Solar burned through three different technologies before mounting concerns over bighorn sheep and tortoises delayed the project so long that they gave up. They did, however, manage to salvage one commodity – a power purchase contract with the Los Angeles Department of Water and Power. With that in hand, K Road went to Nevada. The plant once known as Calico has since been bought by First Solar of Tempe, Ariz., and will soon occupy 800 acres on lands managed by the Moapa Band of Paiutes.
No matter how many pictures you see of the Reid Gardner Generating Station in Moapa, Nev., or stories you read about children with asthma and adults with lung cancer, nothing prepares you for how close the coal-burning plant towers over the schoolyards and playgrounds on the Moapa Reservation. "We're about 600 yards away right here," says Darren Daboda, the tribe's former chairman and current environmental analyst, sitting in his office in a flat stucco building on the main road through town. The plant is technically outside the reservation's boundaries, "but there are no boundaries when it comes to air," Daboda says.
Daboda, 44, is a large, soft-spoken man with a broad face and a persistent smile; he wears a Tilley hat indoors and out. When he was chairman, he was instrumental in wooing solar developers; now, he's in charge of ensuring that the three solar facilities planned for the 71,000-acre reservation are done in an environmentally responsible manner. He has also led protests against the coal plant, which has sickened Moapa's residents for 49 years. The opposition got a big boost in 2012, when the plant's biggest customer, the California Department of Water Resources, declined to renew its contract. Now, after many broken promises, Daboda and his allies have almost won: Three units of Reid Gardner will be shut down this year; the fourth will go in 2017.
Unlike the Navajos, who get millions of dollars in revenue from coal plants on their land, the Moapa get nothing from Reid Gardner. NV Energy (then Sierra Pacific) reneged on early pledges to hire from the reservation. The plant's demise is nothing but a win for the tribe – especially since it leaves behind transmission to Southern California, with room on the lines for solar power.
And the reservation is an ideal site for solar, protected from wind and rain on two sides by low mountain ranges. "It fits in with our desire to be good stewards of the land," Daboda says. It's an economic opportunity for the Moapa in a way the coal plant never was, generating lease income along with construction and maintenance jobs in a place with astronomically high unemployment.
Unfortunately, First Solar's success doesn't guarantee Moapa's solar energy future. Two other projects in development on the tribe's lands have yet to secure buyers. Even though Nevada lawmakers last June outlawed new coal generation, Nevada's largest utility, NV Energy, probably won't want solar from Moapa: The utility has already met the state's modest, and loophole-ridden, renewable energy standard. California won't buy more either, at least not now – utilities are on track to meet the 2020 goal.
In fact, it's possible that renewable energy projects in Nevada will go the way of coal-fired power in Nevada, which was poised for a boom in the early aughts. Natural gas prices had spiked, and California's utilities were crawling from the wreckage of the Enron-induced energy crisis. Dozens of new coal plants had been scheduled around the West, four in Nevada; some were meant to export power to ailing California. That almost none of them went forward might serve as a cautionary tale: There is obvious peril in planning for the fickle California market. California is changing in ways that energy developers eyeing Nevada may not yet understand.
Michael Picker, now at the California Public Utilities Commission, still believes California might someday export electricity, but not in the same way that other states now serve as energy colonies to California. Instead, he expects that as utilities build or procure more wind and solar, they'll have excess electricity at certain times to trade among states. They can do that most efficiently if Western grid managers have the flexibility to move watts back and forth wherever and whenever they're needed – a regional "energy imbalance market."
As it happens, there's one in the works: In February of last year, the Utah-based utility PacificCorp, which serves parts of six Western states, began collaborating with the California Independent System Operator on a shared system that would update generator and consumption data every five minutes, so power can shift around where demand rises. California has already been doing this for years within the state; now that coordination may expand throughout the West.
An energy imbalance market that included Nevada might not kill Valley Electric's, or Nevada's, energy hub ambitions. Paul Thomsen of the Nevada state Energy Office thinks it actually behooves the state to get involved. "If we can develop a scenario in the Western United States that isn't push/pull – that can allow power to flow to California when they need it, or to Utah when they need it – then we get into a cooperative discussion," says Thomsen. "Maybe when (California) has excess solar, we can get that at a very attractive price. Other times when California has a huge demand, instead of firing up a (natural gas-fired) 'peaker' plant, we can send you geothermal."
Or power from a storage system like ARES.
Back in the swanky Pahrump control room, Tom Husted and Rick Eckert, Valley Electric's chief operating officer, say they like the energy imbalance market concept just fine. "It's a step in the right direction," Eckert says. It just doesn't go far enough. They want transmission that sends power from Valley Electric's territory straight through to California.
That's what will draw renewable energy development here, where it's welcome and hence cheap and fast to develop. That's what will lower electricity rates for the nonprofit cooperative utility's 45,000 members. And that's what will drive economic development to, as Husted puts it, "a county with the highest unemployment rate in a state with the highest unemployment rate in the country.
"We believe we have a huge economic opportunity to develop this vast resource in the West," he adds. "And that's a very strong belief."