Renewable energy faces uphill battle

The Colorado House is expected to approve a bill soon that will keep wind rights tied to property rights – unlike subsurface mineral rights, which can be bought and sold separately.

The bill is largely uncontroversial, and it does little more than put a policy on the books that makes intuitive sense for utility companies as well as state and local governments. Such a policy – to avoid a “split estate” for land and wind rights – is already in place in many other Western states.

Overall, though, wind energy – and renewable energy in general – has a still-shaky future in Colorado. Even though the state continues to put renewable-friendly policies in place with procedural ease, roadblocks remain. For starters, there’s still resistance to the development that large-scale renewable energy requires — namely, transmission lines.

And then there’s the Republican-dominated Congressional decision to let go of a 30 percent tax break for wind; without that, say industry experts, wind is unlikely to be competitive with more traditional – and less progressive – forms of energy.

It’s unclear who in Colorado first fronted the idea that wind rights should be separated from property as mineral rights are, said Andy Karsian, legislative coordinator for Colorado Counties Inc., a group that supports county commissioners. But the backlash was broad and decisive.

In a scenario of a split estate for wind, “if you put up a grain silo on your land interfering with my wind, I could sue you,” Karsian said. “If I sold the land, the other landowner would have to realize I could hold on to the wind interest on that land. The complexities of it are insane.”

Karsian can see why some states, like Texas, have grappled with whether to create split estates for wind: “It’s economic development,” he said. “You are able to create an economic engine in a rural part of your state.”

But most states with wind resources have opted for the simpler option of keeping wind rights tied to the land, and the vast majority of Colorado stakeholders appear to be on board with the bill that would get that policy on the books; no one has expressed opposition.

He said the move is a small step toward greasing the wheels for wind energy, and renewables in general. But there are bigger hurdles to overcome.

All powered up, and no place to go

Various projects are under way across the region to develop wind, solar and other forms of renewable energy. Among them are the Cimarron solar project in northern New Mexico, the Kit Carson wind project in central Colorado and the Colorado Highlands wind farm in northeastern Colorado. Those are all projects of Tri-State, a wholesale electric power supplier serving – despite its name – Colorado, Nebraska, New Mexico and Wyoming. Together, the projects are expected to generate over 180 megawatts (mW) of energy, enough to power the equivalent of over 50,000 homes.

And in some areas of the state, utilities are working to strengthen or expand transmission lines to connect new energy projects. Tri-State is building a line between Burlington and Wray, on Colorado’s eastern edge where Kansas and Nebraska meet. Another transmission project has gotten started near Telluride, though it’s slow going because crews can only work in the summer months.

Closer to home, Tri-State Generation and Transmission Association is proposing the San Juan Basin Energy Connect Project, involving a single, 230-kilovolt transmission line from the Farmington area to Ignacio, Colo. That project is winding its way through environmental review.

Transmission lines are a necessary but costly reality for Colorado’s utilities, with price tags approaching $1 million per mile. Trouble is, there are plenty of other areas in and around Colorado where wind and other renewables could be built out – but where there are no transmission lines to carry the energy.

“Colorado is strongly challenged for transmission lines by our geography,” Karsian said. “Because we’re right on the edge of the Western energy grid, we’re really limited on where we can send our power. We need to send it to the Front Range.”

But in order to do that, utility companies would have to get power lines across southeastern Colorado, specifically through the now-famous land of billionaire Louis Bacon, who has remained stanchly opposed. Tri-State hasn’t stopped brainstorming ways to get power lines to the region – they say transmission is needed there even for the sake of regional power stability – but Xcel Energy has given up for now.

“It became way too complicated,” says Xcel spokesman Gabriel Romero. “It just wasn’t worth it.”

Expensive future?

Romero said the distribution of power through adequate transmission lines is a definite challenge. But from where he’s sitting, there’s an even bigger one looming: money.

The longstanding federal tax credit for wind power expired at the end of 2011 – and so far, Congress has made no moves to renew it.

“You’re talking about a 30 percent tax credit for builders of wind farms,” Romero said. “That’s huge.”

He said with the subsidy in place, wind has been comparable in price to natural gas. Without it, it’s possible that utilities will begin passing up opportunities to buy wind power in favor of cheaper alternatives, leaving wind-energy builders high and dry.

For Xcel, such a scenario is not such a big deal; the investor-owned company is easily on track to meet its state-mandated goal of generating 30 percent of its power from renewables by 2020, with wind power it’s already secured at great prices – including a 400 mW wind farm expected to go online in the next year west of Denver. But plenty of people could lose jobs if the wind industry takes a significant hit, he said.

“I think it would be highly unlikely that [the feds] don’t find some way to subsidize the wind energy,” he said.

“That’s a really large number of people who will be out of work, assuming they’re going to have to start closing plants. All you can really do is speculate.”

What’s brewing close to home?

Besides the large-scale renewable-energy projects that are springing up across the state, many smaller ones are ramping up locally. Here are a few home-grown examples: La Plata Electric’s 5.8-megawatt Williams Four Corners waste-gas plant was one of the first significant distributed renewable-energy projects, alongside the 4-megawatt Trailblazer waste-heat recovery plant in Holyoke.

La Plata Electric is building a photovoltaic project at the Durango uranium waste disposal site. At 4.5 megawatts, the facility will generate enough energy to power about 1,000 homes.

San Miguel Power and the Clean Energy Collective have partnered to develop a one megawatt, community-owned solar facility in Paradox Valley; it could be completed by summer.

Wind generation, small hydroelectric projects and biomass production make up a growing renewable portfolio at Empire Electric Association in Cortez. Earlier this year, Empire added a 72-kilowatt Red Wagon Energy project, on a 1-acre site in Mancos.

From April 2012.