TODAY’S STUDY: HOW TO OPEN UP NEW ENERGY ON WESTERN PUBLIC LAND

Western Region Renewable Energy Markets: Implications for the Bureau of Land Management
Scott Haase, Lynn Billman, and Rachel Gelman, January 2012 (National Renewable Energy Laboratory)

Executive Summary

At the request of the U.S. Department of the Interior (DOI) and the Bureau of Land Management (BLM), the National Renewable Energy Laboratory conducted an analysis to estimate the gap between the renewable energy (RE) generation supply and demand in the western states, and how that impacts BLM activities in this sector. The purpose of this analysis is also to provide DOI and BLM with an overview of RE markets, transmission planning efforts, and the role of BLM RE projects in the electricity markets of the 11 states (Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming) that comprise the Western Electricity Coordinating Council (WECC) Region.

Without new policies at either the state or national level, and without the extension of special federal programs3that support the development of renewable electricity facilities, current state renewable portfolio standards (RPS) requirements will remain the primary driver for new RE deployment in the western United States. The quantitative portion of this analysis is based on RPS-driven demand, because projections for that demand are available. Other market drivers will also play a part in motivating investment decisions, such as the voluntary consumer market, other federal and state incentives of various types, utility decisions driven by improving RE economics and transmission availability, and other policies that arise from the desire of some states to diversify their economies and create green jobs. Modeling the impacts of these other drivers was beyond the scope of this analysis.

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In total, the WECC states in 2010 generated more than their total RPS requirement for RE [53,500 gigawatt-hours (GWh) generated compared to 49,500 GWh required for RPS policies]. To analyze the possible gap between demand and supply in RE in 2020, three datasets were compared: one for demand and two for supply. The comparison was made in terms of capacity, rather than generation, to meet the needs of the BLM.

• The source data for future demand was taken from analysis by Lawrence Berkeley National Laboratory (LBNL) of state RPS requirements (Barbose 2011), and includes projected RE generation required in 2020 to meet today’s RPS requirements. The total RPS-required demand for WECC states in 2020 is estimated to be 134,000 GWh. To convert this generation requirement into a demand in terms of capacity, three different approaches to capacity factors were used: LBNL’s approach based on an average capacity factor of 50%, a scenario using a lower capacity factor (26%), and a scenario using a higher capacity factor (53%). These different approaches estimated that WECC states in 2020 may require installed capacity in the range of 28,000 MW to 46,000 MW, as shown in Table ES-1. This required capacity does not include RE demand that may result from voluntary consumer demand or other types of market drivers. Various market factors could increase or decrease these market estimates. States could revise RPSs downward or electricity demand could decrease in the future. As a point of reference, nationwide voluntary consumer demand markets totaled 35,000 GWh in 2010.

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• One source of data for supply was the current (2010) installed capacity of RE in WECC states. Actual installed nameplate capacity in December 2011 was about 18,400 MW (SNL 2011b), as shown in Table ES-1.
• The other source of data for supply was taken from planned projects as tracked by SNL Financial (SNL 2011a). Only planned projects that are under construction or in advanced development4were included in this analysis; the planned capacity of these projects totals about 18,900 MW. The output from planned projects was assigned to states based on the location of the power purchaser, if known (about two-thirds of the planned capacity); if not known, the output was assigned to the state where it is planned to be located (about one-third). Some larger power purchasers sell their power across several states. In those cases, a recent analysis (Hurlbut 2011) examining each utility’s power purchase agreements was used to apportion the output. The sum of actual installed capacity today and planned capacity is about 37,000 MW, as shown in Table ES-1.
• Compared to the range of required RE capacity, Table ES-1 shows that the gap between demand and supply in 2020 ranges from a potential oversupply of 8,000 MW to an unmet demand of 9,000 MW. Because the demand estimates were only based on meeting RPS requirements, other types of market drivers, as mentioned above, should also be investigated within each state, to present a more complete picture of 2020 demand.

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The BLM is required by the Energy Policy Act of 2005 to approve 10,000 MW of non- hydropower renewable energy to be located on public lands by 2015. To date, the BLM has approved or authorized more than 5,200 MW of RE on federal lands.5 Another approximately 8,000 MW in advanced development is included in the BLM list of 2011 and 2012 high priority projects. Based on this list and the progress made in 2011, the BLM appears to be on track to meet its EPAct goal of authorizing 10,000 MW by 2015, and indeed is likely to accomplish this goal by late 2012 or early 2013. The 5,200 MW of approved or authorized BLM projects represent 11%-18% of the projected capacity additions needed to meet RPS requirements in WECC states by 2020.

It should be noted in Table ES-1 that California is the primary driver for RE development across the WECC, representing over half of projected 2020 demand. California’s demand has in-state as well as regional implications for transmission, and its policy environment moving forward will be a critical influence on future RE supply/demand balance.

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The transmission portion of the analysis concludes:

• In total, WECC’s highest priority (“foundational/common case”) transmission projects would add more than 5,500 line miles, which may ultimately improve the viability of some of BLM’s planned projects (WECC 2011).
• The interagency Rapid Response Transmission Team, initiated in 2011 through the U.S. Council on Environmental Quality, recently announced a coordinated and expedited permitting process for seven pilot transmission lines. Five of these lines are located in the western United States, and the BLM is the lead agency on four of these five lines. The focus on these lines represents a concentrated effort to connect potential renewable energy supplies with loads in the northwest and in southern California.
• Most of the BLM’s priority wind and geothermal projects are within 20 miles of existing transmission lines; most of BLM’s priority solar projects are within five miles of existing transmission lines. The analysis of whether there is capacity available on these lines, or whether they could be upgraded, has not been undertaken at this time.
• In general, new RE development projects sited close to load centers are less likely to be impacted by constraints of the current transmission infrastructure over the next 10 years; however, for more remotely sited RE projects, which will likely include some of the BLM projects, additional transmission infrastructure will be required. The additional 19,600 miles of new transmission lines (between 115 and 500 kV) currently planned for WECC states will support some of the expansion required for RE deployment required to meet western state mandatory RPS requirements. In some cases, the cost of some renewable resources located remote to load may offer the potential to reduce overall costs to ratepayers of meeting RPS requirements (WECC 2011).

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Suggestions for the BLM Renewable Energy Program

Based on the analyses of supply and demand in WECC states, and BLM’s interests in leasing land for RE projects, a number of specific suggestions are provided below to advance BLM efforts in this sector.

Update the RE project list. The information on BLM projects presented in this report changes frequently. Reviewing and updating the status of the projects on the master RE project list will help BLM prioritize necessary actions. The BLM Washington office has recently issued a call for information and data for geographic information systems (GIS) analysis of the wind and solar projects that the BLM’s state and field offices are tracking. This information will be useful for updating the status of projects for FY12.

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Focus on high-value project sites. In addition to the approved and high priority projects, BLM has received applications for more than 58,000 MW of renewable energy projects on public lands. The integration of BLM RE projects with planned transmission lines (especially the five pilot lines) will take on greater significance over the next few years, and BLM lands within potential interconnection distance of these lines are likely to see increased interest by industry, provided that these lands also meet all other suitability criteria for development. Further, any suitable BLM lands that are located close to load centers in states that are falling short of RPS requirements, or are located in regions that can potentially export to California, may see increased interest from developers. BLM should consider screening these lands, the solar energy zones, and other regions undergoing landscape-level planning (e.g., the Desert Renewable Energy Conservation Plan [DRECP], the West Chocolate Mountains Renewable Energy Evaluation Area, and the Arizona Restoration Design Project), against criteria designed to identify prime sites for future competitive leasing requests.

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Work with other federal agencies and developers to facilitate project siting. A number of federal agencies, including other DOI bureaus and agencies, the Department of Defense, Department of Homeland Security, Department of Agriculture, Department of Energy, and Department of Commerce are interested in deploying renewable energy technologies to meet their internal mission goals. As specific examples, the Environmental Protection Agency’s RE-Powering America’s Land program seeks to promote the development of renewable energy projects on brownfield sites such as abandoned mining lands, landfills, and contaminated lands. The Bureau of Indian Affairs and many tribes are working to develop renewables on tribal lands. Developers are also targeting state, local, and private lands. Similar to the approach being taken by the BLM’s Restoration Design project in Arizona, BLM could benefit from continuing to work cooperatively with other agencies and industry to identify and better understand the optimal suitable locations for development, regardless of land ownership.

Site projects to help support critical national needs. Similar to the strategy of siting RE to take advantage of drivers and interests of other agencies and private developers, there may be opportunities to increase the strategic value of BLM’s RE projects by co-locating in prime areas that would also support national or regional energy security and resiliency, and support national environmental goals. As an example, BLM projects could be sited in locations that, in an emergency situation, could help supply power for critical loads such as water pumping and treatment facilities, hospitals, military installations, National Guard facilities, critical substations, radar sites, data centers, and other high value loads. In some cases, BLM may choose to work with the developers and recommend a shift of the BLM projects to other locations in the region that may offer greater strategic advantages. Continuing to avoid projects on environmentally sensitive lands will support national environmental goals. GIS and additional landscape level planning analyses such as those being undertaken by the DRECP and WECC’s Environmental Data Task Force can help identify these specific locations and opportunities. Specific examples and case studies could be assessed in greater detail.

Identify options to integrate projects into existing fossil fuel generation. Siting RE projects near old, retiring or seldom used fossil fuel plants takes advantage of existing infrastructure and potential synergies. For example, BLM lands located near existing coal or gas plants may be candidate sites for solar thermal plants that are constructed from the outset to integrate fully into existing facilities. The National Renewable Energy Laboratory (NREL) and the Electric Power Research Institute recently completed an initial screening of fossil fuel plants that may be suitable for solar augmentation (NREL 2011). However, additional detailed work is needed in this area.

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Conclusions

Absent new policy drivers and without the extension of the DOE loan guarantee program and Treasury’s 1603 program, state RPS requirements are likely to remain a primary driver for new RE deployment in the western United States. Assuming no additional policy incentives are implemented, projected RE demand for the WECC states by 2020 is 134,000 GWh. Installed capacity to meet that demand will need to be within the range of 28,000-46,000 MW.

BLM projects that are currently authorized or approved should provide 11%-18% of the total capacity (9% of the generation) needed to meet the 2020 RPS requirements across WECC. If all of the currently authorized and 2011/2012 high priority BLM RE projects are deployed, RE projects on public lands will support 35% of the 2020 total requirement for new RE capacity.

With 5,200 MW of RE authorized or approved, and approximately 8,000 MW of additional 2011 and 2012 high priority projects, the BLM appears to be on track to meet the EPAct 2005 requirement of approving 10,000 MW of RE on public lands by 2012.
Most of the BLM’s priority wind and geothermal projects are within 20 miles of existing transmission lines; most of BLM’s priority solar projects are within five miles of existing transmission lines. New RE development projects sited close to load centers are not expected to be constrained by the current transmission infrastructure over the next 10 years; however, for more remotely sited RE projects, which some of the BLM projects will likely be, additional transmission infrastructure will be required. The additional 19,577 miles of new transmission lines (between 115 and 500 kV) currently planned for WECC states will support some of the expansion required for RE deployment required under western state mandatory RPS.

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Based on the analyses of supply and demand in WECC states, and BLM’s interest in leasing land for renewable energy projects, the following suggestions may be helpful for BLM:

Update the renewable energy project list. The information on BLM projects presented in this report changes frequently. NREL suggests that at least once per year, BLM go through its master project list and obtain updates on the status of the projects on its books. The BLM Washington office has recently issued a call for information and data for GIS analysis of the wind and solar projects that BLM’s state and field offices are tracking. This information should be useful for updating that status of projects for FY12.

Focus on high-value project sites. The integration of BLM renewable energy projects with planned transmission lines (especially the five pilot lines) will take on greater significance over the next few years, and BLM lands within potential interconnection distance of these lines are likely to see increased interest by industry. Also, any BLM lands that are located close to load in the desert southwest in states that are potentially falling short on RPS requirements may see increased interest from developers. BLM should consider screening these lands, and the solar energy zones and other regions undergoing landscape-level planning, against criteria designed to identify prime sites for development of competitive leasing requests.

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Work with other federal agencies and developers to facilitate project siting. A number of federal agencies, including other DOI bureaus and agencies, the Department of Defense, Department of Homeland Security, Department of Agriculture, Department of Energy, and Department of Commerce are interested in deploying renewable energy technologies to meet their internal mission goals. As specific examples, the Environmental Protection Agency’s RE-Powering America’s Land program seeks to promote the development of renewable energy projects on brownfield sites such as abandoned mining lands, landfills, and contaminated lands. The Bureau of Indian Affairs and many tribes are working to develop renewables on tribal lands. Developers are also targeting state, local and private lands. Just as BLM has done with its Restoration Design project in Arizona, the BLM could benefit from continuing to work cooperatively with other agencies to identify the most suitable locations for development, regardless of land ownership.

click to enlarge

Site projects to help support critical national needs. Similar to the strategy of siting projects to take advantage of projects and interests by other agencies and private developers, there may be opportunities to increase the strategic value of BLM’s renewable energy projects by co-locating in areas that would support national or regional energy security and resiliency, and support national environmental goals. As an example of this, BLM projects could be sited in locations that, in an emergency situation, could help provide power supply for critical loads such as water pumping and treatment facilities, hospitals, military installations, National Guard facilities, critical substations, radar sites, data centers, and other high value loads. In some cases, BLM may choose to work with the developers and recommend a shift of the BLM projects to other locations in the region that may offer greater strategic advantages. Continuing to avoid projects on environmentally sensitive lands will support national environmental goals. GIS analysis can help identify these specific opportunities.

Identify options to integrate projects into existing fossil fuel generation. Siting renewable energy projects near old, retiring, or seldom used fossil fuel plants takes advantage of existing infrastructure and potential synergies. For example, BLM lands located near existing coal or gas plants may be candidate sites for solar thermal plants, including those with thermal storage, that are constructed from the outset to integrate fully into existing plants.