Sunday, June 13, 2010

Agency Announces Rental Rates for Solar Power Plants on Public Land

The federal Bureau of Land Management has announced the rental fees it plans to charge for any solar power plants constructed on public lands – and they aren't cheap.

A 400-megawatt solar photovoltaic power plant installed in Riverside County, California, for example – where a number of solar power plants have been proposed – could be required to pay as much as about $3.5 million a year under the bureau's fee structure.

"Publishing this rental schedule moves our nation closer to creating a new energy frontier – one that relies more on renewable, clean, energy sources," said Bob Abbey, director of the Bureau of Land Management, in a news release. "We are providing the solar energy industry the level of certainty it needs about the costs associated with projects on the public lands and ensuring a fair return to American taxpayers for the use of their public lands."

The bureau recently had 175 active applications under environmental review for large-scale solar power projects proposed on public lands in six western states. Fourteen solar projects are undergoing "fast-track" reviews that follow the same procedures as others but are expedited to allow the projects, if approved, to qualify for economic stimulus funding before the end of 2010 under the Recovery and Reinvestment Act.

Rhone Resch, president and chief executive of the Solar Energy Industries Association, said in a prepared statement that "while oil and gas companies have received more than 74,000 permits to operate on federal lands in the past two decades, utility-scale solar developers have received zero. We applaud Interior Secretary [Ken] Salazar and BLM Director Abbey for achieving this milestone and taking another step toward the clean-energy future that the American public wants." A recent poll showed about three-fourths of Americans support putting solar power plants on public lands, he said.

The Bureau of Land Management is required under the law to collect annual rent payments for right-of-way authorizations on public lands. The law stipulates that the rents reflect fair market value.

The solar rental schedule was developed by the bureau, the Department of the Interior and the Department of Energy. It consists of a "base rent" that will be charged for the amount of acreage taken up and a "megawatt capacity fee" based on a plant's power output.

The rent per acre will vary from county to county and is based on values published by the National Agricultural Statistics Service. Examples range from $313.88 per acre in Riverside County, Calif., and Yuma County, Ariz., to $15.70 per acre in Pima County, Ariz.; Mineral County, Nev.; and Hidalgo and Luna counties, N.M. Most of the land managed by the bureau is in 12 Western states.

The capacity fee will be charged annually once a power plant begins operations, but will be phased in over a five-year period. The fee will start at 20 percent the first year, then rise to 40 percent the second, 60 percent the third, 80 percent the fourth, and 100 percent in the fifth year and every year thereafter. Solar power plants are expected to have typical lifetimes of 25 years or more. The nation's oldest utility-scale solar photovoltaic and solar thermal power plants, both in California, are now about 26 years old, and continue to operate.

The capacity fee will vary depending on the type of solar technology used in a power plant. It is based on a formula that includes the production efficiency of the electricity generation and the average return on a federal 20-year bond.

For solar PV technology -- the type also used on homeowner and small-business rooftops – the fee will be $5,256 per year per megawatt of capacity.

For concentrated photovoltaics, which use mirrors or lenses to focus light onto semiconductor materials, and for concentrated solar thermal plants, which use the sun to heat up materials to run generating turbines, the megawatt capacity fee will be $6,570 if the plants have no way to store significant amounts of heat to continue to produce electricity when the sun isn't shining.

For concentrated solar plants with storage capacities of three hours or more, the fee will be $7,884 per megawatt per year.

As an example, the bureau said, the capacity fee for a 400-mw photovoltaic installation would be $2,102,400 annually. If the plant were in Riverside County, Calif., and occupied 4,410 acres, its base rent would be $1,384,211, and the combination in the first year would total $3,486,611. Total fees would be higher for concentrated solar plants.

Power plants using all types of solar technologies are proposed on bureau-managed lands in Riverside County and other locations in California, Arizona, Nevada, New Mexico, Colorado and Utah, but none have been approved.

The policy takes effect immediately, the Bureau of Land Management said.

See the original article here

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