Renewables: An update on where we stand

Long before it was fashionable, northern Nevada was quietly investing in renewable energy projects that are paying great dividends to Nevadans today. We signed our first contract for geothermal power in 1983, and just this past year NV Energy surpassed a remarkable threshold of one gigawatt of renewable energy under contract. It doesn't take a mathematician to know that a gigawatt is a lot of energy. In our case, we've now increased our self-generated and contracted capacity to 1.2 billion watts of renewable energy.

For those who like specifics, our statewide renewable energy portfolio includes 23 geothermal projects, eight solar projects, five biomass/biogas projects, five small hydro projects, one waste heat recovery project and two wind projects. That makes 44 projects in all, with a total nameplate megawatt rating of 1,240 megawatts or 1.2 gigawatts.

Thanks to the geothermal resources in northern Nevada and EDAWN's Economic Development Council member companies like Ormat Technologies and Enel North America, Nevada's geothermal production is second only to California. If you measure it on a per-person basis, Nevada leads the nation in the use of geothermal energy.

We're proud of our solar energy growth accomplishments as well. In recent weeks, NV Energy was referenced in the respected Solar Electric Power Association's 2009 Utility Solar Rankings study as having the nation's fourth highest cumulative solar watts-per-customer. That's up from a sixth-place ranking in 2008. And on a state-by-state comparison, Nevada has more installed solar energy capacity per person than any other state in the nation.

Such progress does not happen by chance, and 2009 was a milestone year in renewable energy. This progress helps position Nevada and Greater Reno-Tahoe as a center for clean energy and helps support NV Energy and our economic development partners, including EDAWN, to recruit and expand clean energy technology companies to our region. Here are some examples:

* Overall, the renewable plants in our portfolio produced 22 percent more energy and energy credits than was produced in 2008;

* Three new geothermal plants here in northern Nevada, totaling 120 megawatts, were completed and began operating for our customers;

* Our renewable energy team succeeded in bringing 10 new projects under contract, totaling 491 megawatts of renewable capacity (seven are pending Public Utilities Commission of Nevada approval);

* We reached agreements for nearly 200 megawatts of new solar thermal and new solar photovoltaic energy to be developed for our customers;

* We increased our wind-energy potential for our customers significantly with a 150-megawatt wind project that is under development in eastern Nevada; and

* We accelerated our "request for proposals" process for renewable energy, increased the opportunities for renewable developers and shortened the timeframe to reach contractual agreements.

Additionally, earlier this year we completed a new and exciting partnership with Waste Management at its Lockwood landfill just southeast of Reno. Most of us don't think much about what we throw away, but Waste Management will use a series of wells at their landfill to power a state-of-the-art turbine generator. That generator, in turn, will provide more than three megawatts of renewable energy to our customers. This project is pending approval, but we're hopeful that our customers will begin benefitting from this energy by late next year. What's even more impressive is that this process can run on a 24-hour cycle similar to our base-load plants and actually cleans the gas that is normally vented to the atmosphere.

Again, we're proud of our success and our economic development partnerships with more than 30 separate companies that have significant renewable energy operations in our state. But, the best is yet to come, as we will continue to accelerate our efforts to meet the legislated mandate of 25 percent in 2025.

I would be remiss if I didn't address a related "elephant-in-the-room" question about how we are doing to meet the constantly increasing Nevada Renewable Portfolio Standard. The short answer is that we met the standard in 2008, but came up short in our southern Nevada territory in 2009. I will share a few ongoing challenges all companies have with meeting such standards, but wanted to emphasize on the front end that the stair-stepped standard had increased 33 percent from 2008 to 2009. The good news is that we continue to meet the specific solar energy requirement each year, and we are on track to make up the 2009 shortfall, as well as meet the 2010 standard by the end of this year.

Challenges associated with constructing new renewable energy plants range from financing difficulties, to site permitting, to project cancellations, to those that do not perform as expected. In 2009, for example, two geothermal projects that were expected to contribute toward our Renewable Portfolio Standard were canceled. Some of Nevada's geothermal projects produced less than expected, primarily because of difficulty encountered in finding and extracting the resources at project sites. Three wind projects that were expected to be online in 2009 and 2010 also were canceled. And, less than a quarter of the projects we have under contract fully met their energy production targets in 2009. Naturally, these challenges are to be expected in such a rapidly growing segment of the energy business.

While Nevada's renewable energy project success rate is not unique, NV Energy has aggressively stepped up its renewable energy procurement process to compensate for problems associated with cancelations, delays or under production.

These truly are exciting times in the energy business. Expanding our renewable energy initiatives and investments is a central aspect of NV Energy's three-part energy supply strategy. And, we could not do it without our many high-quality business partners, and without such organizations as EDAWN and the organization's dedication to recruiting and expanding quality companies in our part of the state.

Mary Simmons is vice president of external affairs for NV Energy and serves on the Economic Development Council of the Economic Development Authority of Western Nevada.


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