Federal control of state lands both helping, hindering Nevada’s “green economy”
According to recently updated data from NV Energy, since the stimulus passed in February 2009, imported nuclear energy generated over 328,000 megawatt hours of electricity for Northern and Southern Nevada customers, whereas solar, wind, and biofuel sources combined to produce less than 212,000 megawatt hours.
NV Energy imports nuclear energy from the San Onofre Station in Southern California and the Palo Verde Station in Arizona, despite the political muscle that state political leaders devote to fighting the nuclear energy industry.
"We use much more nuclear than people want to admit," said Paul Seidler, executive director of the Nevada Alliance for Defense, Energy and Business, a research division at the University of Nevada, Las Vegas. "At some points during the year, particularly during peak demand times, we're using over 100 times more nuclear than we're using solar or other types of [renewable] energy."
Solar generation industry lobbyists have hosted fundraisers for Senate Majority Leader Harry Reid and then secured federal subsidies.
Even so, says Seidler, solar power may never replace the need for imported energy in Nevada. That's because no matter how much money is invested, a solar plant will never produce as much "baseload," or minimum amount of power, that nuclear plants do.
"The economy hasn't helped, but we haven't really seen a return on our investment yet in many of these subsidized plants," Seidler said.
Specifically, solar is not showing a big return. According to the 2010 Stimulus Profile of Nevada, the most recently available federal report, 8.8 million taxpayer dollars have gone into new solar projects in Nevada so far. Yet NV Energy's "Power Content" labels for the last two quarters suggest the new solar suppliers generated less than 200,000 megawatt hours for the entire state. Also, projections from the Energy Information Administration show that solar energy will cost almost twice as much as nuclear power in the future. Compared to the cost of natural gas or coal power, solar energy fares even worse.
These numbers are troubling for Nevada since the Solar Energy Industries Association ranked the Silver State as the No. 1 state in the country for installed solar energy capacity. If Nevada is heavily invested in solar energy, which the EIA projects will be more than two or three times as costly as competing power sources, energy economists naturally question if the rest of the country will bear those costs.
"If our goal is to be a free market and let the market sort everything out, we [nevertheless] have all of these subsidies that do different things," said Stephen Brown, an energy economist and current director of the Center for Business and Economic Research at UNLV. "So we're not really pursuing a free market, we're not really pursuing energy security, and we're not really pursuing climate policy."
The high subsidy costs, coupled with rising energy prices, puts a "hidden stranglehold" on the economy, according to Seidler.
"The last thing we want to do is saddle ourselves with a large energy bill," he said. "We don't want to make arbitrary investments into areas where we could get into a lot of trouble."
According to Bob Boehm, director of energy research at UNLV, subsidized energy projects have an easier time obtaining land development rights, since 90 percent of Nevada's land is federally owned.
"Since we [Nevada] have much less privately owned land, it's tougher for companies to take the traditional route in developing a piece of property," said Boehm, "but because we have so much federally owned land, it's easier for the Feds to say what we should and shouldn't do with it."
Former state energy director Jim Groth acknowledged the difficulty in land development in his 2009 "Status of Energy in Nevada" report to then-governor Jim Gibbons:
"The large amount of federal ownership makes it difficult for even privately owned lands to be developed for renewable energy production since many sites must be accessed through federal lands," Groth wrote in the report. "The impediments to developing federal lands and accessing private lands must be removed to enable Nevada to live up to the expectation of becoming the ‘Saudi Arabia of Solar.'"
Even ENN Mojave Energy Corp., a Chinese solar manufacturer that is seeking approval from Clark County to build a factory in Laughlin, needs help from Reid to obtain a federal waiver to develop on the land. According to the Las Vegas Sun, Reid met with the company during his secretive trip to China in April.
Without Reid's help, the company wouldn't have such an easy approval process.
"In a lot of these [energy] cases, [Reid is] the difference maker," Seidler said.
Brown added that due to the subsidies, Nevada suffers from an "entrepreneurship problem," since private entrepreneurs can't obtain funds as easily as politically selected companies.
"In theory, entrepreneurs would be encouraged by a state with so many clean energy promotions," Brown said. "However, some companies received large amounts of [federal] stimulus and other companies received different federal grants, so it's difficult to know exactly what you'd get."
Whether Nevadans receive a return on their investment in clean energy will depend on cost-competitiveness, something politicians shouldn't control, according to Seidler.
"The challenge is seeing if we can make some of these technologies cost-effective," Seidler said. "We're in a position to do this, but we need the best technology to win because it's the most effective, not because it had the most [federal] funding thrown at it."