Update of Lawsuits Impacting Major Solar Projects in the California Deserts

A test to solar energy projects, on environmental grounds
By Todd Woody
New York Times
Posted: 02/25/2011 06:18:11 PM PST
Updated: 02/25/2011 06:18:14 PM PST

SAN FRANCISCO — Just weeks after regulators approved the last of nine multibillion-dollar solar thermal power plants to be built in the Southern California desert, a storm of lawsuits and the resurgence of an older solar technology are clouding the future of the nascent industry.

The litigation, which seeks to block construction of five of the solar thermal projects, underscores the growing risks of building large-scale renewable energy plants in environmentally delicate areas. On Jan. 25, for instance, Solar Millennium withdrew its 16-month-old license application for a 250-megawatt solar station called Ridgecrest, citing regulators’ concerns over the project’s impact on the Mohave ground squirrel.

At peak output, the five licensed solar thermal projects being challenged would power more than 2 million homes, create thousands of construction jobs and help the state meet aggressive renewable energy mandates. The projects are backed by California’s biggest utilities, top state officials and the Obama administration.

But conservation, labor and American Indian groups are challenging the projects on environmental grounds. The lawsuits, coupled with a broad plunge in prices for energy from competing power sources, threaten the ability of developers to secure expiring federal loan guarantees and private financing to establish the projects. Only one developer so far, Oakland-based BrightSource Energy, has obtained a loan guarantee and begun

Like so many of California’s troubles, the industry’s problems are rooted in real estate.

After President George W. Bush ordered public lands to be opened to renewable energy development and California passed a law in 2006 to reduce carbon emissions, scores of developers staked lease claims on nearly a million acres of Mojave Desert land. The government-owned land offered affordable, wide-open spaces and the abundant sunshine needed by solar thermal plants, which use huge arrays of mirrors to heat liquids to create steam that drives electricity-generating turbines.

But many of the areas planned for solar development — including the five projects being challenged — are in fragile landscapes and are home to desert tortoises, bighorn sheep and other protected flora and fauna. The government sped through some of the required environmental reviews, and opponents are challenging those reviews as inadequate.

"There’s no good reason to go into these pristine wilderness areas and build huge solar farms, and less reason for the taxpayers to be subsidizing it," said Cory Briggs, a lawyer representing an American Indian group that has sued the Interior Department and the Bureau of Land Management to stop five of the solar thermal plants. "The impacts to Native American culture and the environment are extraordinary."

The risk that the suits will succeed in blocking construction could make it more difficult for the builders to get federal loan guarantees or attract private financing.

Officials with the Loan Programs Office of the Energy Department did not respond to requests for comment. However, department guidelines classify litigation risk as a significant factor to be considered when qualifying renewable energy projects for a loan guarantee.

Brett Prior, a solar analyst with GTM Research, a market research firm, said commercial lenders also viewed the suits as a negative. "In general, there are more projects chasing project finance than there are funds available, so the investment banks can be selective when deciding which projects to support," he said. "Projects with lawsuits pending will likely move to the back of the queue."

The conflict over the California projects has already accelerated a shakeout among competing solar technologies.

Tessera Solar announced recently that it has sold its 709-megawatt Imperial Valley solar dish project, which had become the target of two lawsuits. The buyer, AES Solar, develops power plants using photovoltaic panels like those found on residential rooftops. The move follows Tessera’s sale of its 663.5-megawatt Calico solar dish power plant in late December a week after the company lost its long-standing contract with utility Southern California Edison. Calico is the subject of three lawsuits and the project’s new owner, a New York firm called K Road Power, said it plans to abandon most of Tessera’s solar dishes and instead deploy photovoltaic panels.

Solar thermal developers never expected to run into such difficulties. But federal law requires projects proposed for public lands to undergo extensive environmental review and allows citizens to sue to enforce those laws. Three of the four solar thermal power plants that have escaped legal challenge are planned for private land.

The Sierra Club and a union group filed separate petitions Dec. 30 with the California Supreme Court to overturn the California Energy Commission’s licensing of the Calico project, alleging the 7.2-square-mile power plant would devastate the imperiled desert tortoise and other wildlife.

"The task at hand is to bring clean energy online, which includes large-scale renewables," said Bill Corcoran, the western regional director for the Sierra Club’s Beyond Coal campaign in Los Angeles. "But as we looked at all of the fast-track projects, Calico was far and away the most harmfully located project."

Meanwhile, an American Indian tribe, the Quechan, obtained a federal court injunction temporarily halting Tessera’s 709-megawatt Imperial Valley Solar Project, near the Mexican border. The Quechan say the Interior Department did not adequately consider the impact of the project on its ancestral lands and on wildlife that figure in the tribe’s creation story.

The American Indian group represented by Briggs, La Cuna de Aztlan Sacred Sites Protection Circle Advisory Committee, on Dec. 27 filed suit seeking an injunction against five solar thermal power plants on similar grounds. Besides the two Tessera solar farms, it seeks to block the 370-megawatt Ivanpah power plant from BrightSource, the 1,000-megawatt Blythe project from Solar Millennium and the 250-megawatt Genesis Solar station from NextEra Energy Resources.

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