Video


Wind and Solar Farms – Cultivating Renewable Energy Resources on Public Lands


June 9, 2014


Substantial opportunities exist to harness renewable energy on the public lands, but this potential does not occur without some challenges. BLM Renewable Energy Team Leader, Ray Brady, will explore how the BLM balances the need to generate clean electricity with the potential for adverse environmental impacts, land-use conflicts, wildlife concerns, cultural resource conflicts, and tribal concerns. This lecture will provide an overview of how the BLM has responded to the clean energy and renewable energy goals of Congress and the administration, and the future goals established by the President’s Climate Action Plan.


Ray Brady, BLM Renewable Energy Coordination Office


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Transcript

Malka Pattison: Good afternoon and welcome. I'm Malka Pattison, and welcome to the Office of Policy Analysis monthly seminar. Our speaker today is Ray Brady. He's the coordinator of BLM's Renewable Energy Office. Ray confirmed that he has been around even long than I have -- 43 years -- so he has a perspective not only renewables but BML's energy program. Be ready for a good discussion on the opportunities and challenges of renewable energy at BLM. Ray Brady: Thank you very much, Malka. I appreciate it. It's my pleasure to be here today, and thank you for showing up here as well. I also want to thank the guests that are on the webinar presentation with us today, as well. The topic of our discussion today is "Cultivating Renewable Energy Resources on BLM Public Lands." We're focusing on wind energy and solar energy development today, during this presentation, nut we'll also briefly touch on geothermal energy resources on BLM public lands, as well. BLM's portfolio of renewable energy resources includes not only wind and solar, but also our geothermal energy resources. Substantial opportunities exist to harness renewable energy on our public lands. But this potential only occurs with a large amount of effort and coordination with a variety of stakeholders, but also with the significant amount of environmental review and oversight that BLM provides on our public lands, to ensure our other resources are protected as well. What are some of the goals that have focused the priority on renewable energy development on our BLM public lands? The Energy Policy Act of 2005 Section 2:11 of the Energy Policy Act, provided a goal of 10,000 megawatts of non-hydro renewable energy projects on BLM's public lands by the year 2015. BLM has already accomplished this goal. We met that goal of 10,000 megawatts back in 2012. It shows the priority that we placed on renewable energy development on our public lands. The President in this administration has made it very clear that renewable energy, clean energy, is a priority of this administration. There is a US goal that the President established as part of the new energy for America program, of 10 percent of our electricity from renewable energy by the year 2012, and 25 percent of US's energy supply by 2025 met by renewable energy. The President in the State of the Union address in 2011, indicated by the year 2035 that 80 percent of America's electricity would come from clean energy resources. This is a US goal. The President's State of the Union address in 2012 indicated that allowable development of clean energy on public lands was to provide for power of three million homes. Those three million homes convert to about that 10,000 megawatt goal that BLM has already accomplished. The President signed an Executive Order 13604 that established some nationally significant infrastructure projects in the United States. Seven of those projects were renewable energy projects on BLM managed public lands. BLM has already approved those seven projects that were identified on the national list. Secretary Salazar when he came on board made it very clear that the Department of Interior is very clearly engaged in renewable energy. Our new energy frontier agenda included a Secretarial Order that was signed in 2009. This was the first Secretarial Order signed by Secretary Salazar, and clearly indicated that development of renewable energy was a department priority. The DOI goal was 10,000 megawatts by the year 2012, and BLM accomplished that. The President recently announced his Climate Action Plan. The Climate Action Plan clearly has a role for renewable energy, as well. The Climate Action Plan established a new goal -- 20,000 megawatts total of renewable energy by the year 2020. That would be sufficient power to power six million homes in the United States. BLM is currently on target to meet that goal. When we go back and look at some of these goals and challenges for the United States in clean energy, our current electricity generation capacity in the United States, over 50 percent of our electrical generation in the United States come from coal, approximately 20 percent from nuclear, 20 plus percent from natural gas -- and we've seen that continued to increase from year to year, as new natural gas supplies come on board. Hydro provides about seven percent of our electrical generation in the United States, and wind, solar and geothermal approximately three percent. Where will the 80 percent clean energy come from in the future, to meet the 2035 goal? There's some question of what the mix in coal will be in the future, and whether clean coal technology will be developed to continue to provide opportunities for coal to be a major contributor of our future clean energy supply. There's some question of the future from nuclear, as well, with concerns about safety of nuclear power plants and the ageing infrastructure that we have with many nuclear power plants that were built many years ago. What will be the future of nuclear in the US energy mix? As we've seen with natural gas, natural gas supplies are increasing which clearly anticipated that natural gas will continue to be a major contributor in the future for our electrical generation, exceeding 20 percent capacity that we currently have. Hydro -- we've probably developed most of our major hydro facilities, but there are opportunities for small hydro as well, and improved efficiencies for existing plants. However, significant changes in the percentage of that mix probably will not be realized. It will probably still be in the range of 7 percent, maybe 10 percent of our electrical generation. That provides some real opportunities for wind, solar and geothermal in the future. It's anticipated that that future capacity will exceed 10 percent. One of the other drivers for renewable energy development here in the United States are renewable portfolio standards that have been passed by many of the States. Eleven of the Western States have renewable portfolio standards. This has really been the driver for solar and wind energy development, especially in the Western States where BLM has a major public land ownership, acreage. BLM has done a variety of studies and environmental reviews for wind, solar and geothermal on our public lands. We've identified about 20.6 million acres of BLM land that's potentially available for wind energy development. We recently completed a programmatic environmental impact statement for solar energy development on BLM public land. We've identified 19 million acres that are potentially available for solar development. Within the 19 million acres, we've also identified some key development areas that we call "Solar Energy Development Zones." Those solar energy development zones represent about 300,000 acres. In addition to that, we've completed programmatic environmental reviews and impact statements on geothermal development on the public lands, as well. We have identified about 190 million acres of both BLM and forest service lands that are available for geothermal development. Let's look at where some of these resources are. When we look at the wind energy resource potential map, you see that a large amount of the wind potential is in the upper Midwest Great Plains estates, including Texas. Not much of that land is Federal land. Most of the wind development that we're seeing, occurred in the United States to date, has been on non-Federal land, on private lands, the vast majority of that in Texas and the Great Plains. However, there's significant potential. A large amount of the potential is in our offshore lands, both in the Atlantic and the Pacific. The Bureau of Ocean Energy Management within the Department of Interior has a role and responsibility for leasing our offshore lands for wind energy development. There are several leases that have already been issued in the Atlantic. The BLM resource is more scattered throughout the Western United States. Current capacity on BLM land is about two percent of the wind capacity that's been built in the United States on BLM land. So you see, the vast majority of the wind development is not on BLM land, here in the United States. Solar potential. Solar is a totally different picture. As you see the solar potential is focused in the desert southwest of the United States. The vast majority of the land in those western states, especially Nevada, Arizona, Southern California, is federal land. BLM has been a major player in providing opportunities for solar development in the United States. Geothermal development. Again the vast majority of our geothermal resource potential is in the western states where we have large amounts of federal land ownership. Let's look at the authorities that BLM uses to authorize solar and wind development, as well as geothermal development on our public lands. Solar and wind energy projects are authorized under the authority of the Federal Land Policy and Management Act. This is BLM's enabling legislation and they're authorizes right of way authorizations on our public lands. Geothermal is considered very similar to a mineral resource and handled very similar to how oil and gas is handled on our federal lands. It's authorized under the Geothermal Steam Act amended by the Energy Policy Act of 2005. We issued geothermal competitive leases very similar to oil and gas leases. This is a slide that generally shows what some of the provisions of solar and wind energy authorizations on the BLM lands involve. These are right of way authorizations. Solar and wind companies are required to pay cost recovery to BLM for the processing costs of processing these applications. There is no acreage limit on a solar wind energy authorization. The acreage will depend on the size of the project. So a small megawatt sized project will involve smaller acreage, a larger utility scale solar wind project hundreds of megawatts in size would involve substantial amount of additional acreage. There's no term limits. Generally, we issue solar and wind energy authorizations for 25 to 30 years. The reason for those long term terms is that solar and wind energy companies will enter into Power Purchase Agreements with utilities to buy the electricity generation and those Power Purchase Agreements are generally negotiated for a 25-year term. So our solar and wind authorizations are generally in the term of 25 to 30 years. Those authorizations have the right of renewal. They're subject to terms and conditions that are defined by BLM through our Environmental Review Process. There are rental payments. They're made on an annual basis for wind and solar authorizations on our public lands. We have no authority for collection of royalty payments but our rental collections and our rental schedule is based upon the megawatt size and capacity of a solar wind facility. We have an acreage fee depending on the acreage size of the authorization. We have a megawatt capacity fee based upon the megawatt size of the facility as well. BLM bonds all of our solar and wind authorizations on BLM public lands to ensure that the federal government does not assume a risk for the development of that project on the public lands. A hundred percent of the revenues that are generated from these operations go to the General Treasury. This is just a quick slide on geothermal provisions. I'm not really going to go through geothermal very much. I'm going to try to focus on wind and solar but as I indicated geothermal is authorized under the Geothermal Steam Act. It's handled very similar to oil and gas leases, same types of provisions. For authorizations on BLM land, we have -- and these are recent authorizations since 2009 -- we've approved 16 solar projects specifically on BLM public land. I'm going to talk about some other projects that are what we call Connected Action Projects where BLM has approved off-site facilities associated with the project. We've approved 36 wind projects since 2009. We currently have over 800 geothermal leases, 72 of those leases are in production status. This is a quick snapshot of the permitting process. As you can see it has many steps in the process. Any of our activities on BLM public lands are first reviewed under our land use planning guidelines with BLM. The Wind Programmatic EIS that we completed in June of 2005 with basically a BLM land use planning exercise to allocate our BLM public lands to areas that were appropriate for wind energy development. Solar Programmatic EIS was completed in October 2012. That is also a BLM land use planning document that identified in designated lands for appropriate solar development. BLM continues to prepare local BLM land use plans and additional land use plan amendments based upon a review of other resource values on our BLM public lands. We require pre-application meetings from applicants before we process a wind or solar application. There's a plan of development that's submitted for solar and wind development. As I indicated previously, we enter into cost-recovery agreements. We are involved in significant consultation and coordination with our sister federal agencies, as well as other state agencies in the permitting process as well. Fish and Wildlife Service has really been at the table with us in addressing fish and wildlife issues related to solar and wind energy development. We are working very closely with state Game and Fish agencies and other state permitting authorities. We have obligations to consult with our Native Americans and tribal constituents as well in a consultation process. We screen our applications for those projects that appear to have the least resource conflicts and try to prioritize processing those applications that have the fewest resource conflicts. We conduct site-specific NEPA reviews on every project. Many of those projects have been prepared at the Environmental Statement Level of NEPA compliance. But in some cases where the resource conflicts are reduced and we can tier to previous planning efforts and previous NEPA reviews, we can tier to a lower level of NEPA analysis and streamline the permitting process. We issue a Right of Way Authorization for both solar and wind projects. As I indicated previously we have bonds that are required for all these projects and then we conduct active inspection and enforcement activities on those projects to ensure they're complying with the terms and conditions of the authorizations. These are a couple of slides on the geothermal leasing process, very similar to oil and gas. The geothermal development process, which may involve drilling of additional geothermal wells, as well as construction of a power plant facility associated with that geothermal project as well. This is a summary of what we've done since 2009. We have solar projects, wind projects, and geothermal projects that were prioritized by BLM to help streamline the process. Since 2009, we've approved 52 solar, wind, and geothermal projects. To put those 52 projects in context, those 52 projects, the projects that have been constructed to date or that are under active construction right now, those companies have committed substantial capital investments in these projects. The total estimated capital investments to date for those projects that have been constructed, exceed $8.6 billion in capital investments, for those projects that have been constructed to date. There are several projects that are still pending construction or are just starting construction. Those additional projects of those 52 that were approved, represent another $28 billion of capital investments that the solar, wind, and geothermal companies have committed to for development of these projects. So, the $8.6 billion and the $28 billion, represents over $36 billion of capital investments that solar, wind, and geothermal companies have committed to, to these projects on public lands. As I've indicated, we've tried to streamline the process. Historically, in the past, many of these large types of energy projects would have taken years to permit. Many of these projects that involved environmental impact statements may have taken three, or four, or five years to complete NEPA reviews for these projects. This represents some of the projects. If you look at kind of the scope and scale of these, many of these have been completed in less than 24 month time period. We've really prioritized these projects. We've committed our resources, our manpower resources, and time resources to focus on these projects, and tried to streamline the projects that we have approved. I want to do a quick photo journey to give you an example of what some of these projects look like. We've got some photos of the Spring Valley Wind Project that was approved in 2010. This project, construction has been completed, and the project is operating. It's 150 megawatt wind project in Nevada. This is the first authorized wind project in the State of Nevada. The Ocotillo Wind Project in California. This is an operating wind project now. That project was approved in May 2012. It's a 315 megawatt wind project in Southern California. The Silver State Solar Project in Nevada. It's one of the smaller solar projects that we've approved, 50 megawatts. It was approved in October of 2010. This was the first solar project that came online. The first solar project that had been approved on BLM public lands. The last project that I'll show some slides for is the Ivanpah Solar Project in Southern California. This is a 370 megawatt solar power tower facility approved in October of 2010. This is the largest solar project that's operating on BLM public land to date. However, there are other projects that will be coming online when construction is completed. This is a picture of the Spring Valley Wind Project in Nevada. It's in East Central Nevada, near the Utah State line. You can see the wind turbines in the distance, in the valley floor below the mountain front. This is the Ocotillo Wind Project. This is in Southern California. This is now near El Centro, California, along the Interstate Highway going from El Centro to San Diego. This is the Silver State Solar Project in Nevada. This is located South of Las Vegas. This is a photovoltaic solar facility. We're now working on Phase II of this project. Phase II of the project was approved just this year, and the company has started construction of Phase II in the project. This project, Secretary Salazar went out and helped dedicate the flipping the switch on this solar project, and helped install some of the solar panels on this facility as well when he was here. I've got a couple of pictures of the Ivanpah Solar Project. This is a very large project, 370 megawatts. What you see here in the view are three power towers with a field of mirrors around each of the power towers. Those mirrors reflect the sun energy back onto the top of the power tower, heats the water that's at the top of the tower, generates steam. The steam then runs steam generators to regenerate electricity. These are three power towers, total megawatt capacity, 370 megawatts. This is the field of mirrors around one of the power towers. The total number of mirrors at this facility is 340,000 mirrors installed around the three power towers. I briefly talked about the Solar Programmatic EIS, and wanted to say a few additional words regarding it. We did prepare a Programmatic Environmental Impact Statement to look at solar development on BLM public lands. That EIS was completed in 2012. As part of that Programmatic EIS, we designated 17 solar energy zones, just over 280,000 acres. These are focused areas, where we're going to clearly try to encourage solar development to occur within these 17 solar energy zones. We also identified lands outside the solar energy zones as variance lands that we would consider applications on an application-by-application basis, with additional environmental reviews for those lands outside the solar zones, but our work is focused within the solar energy zones. As I indicated, we have 17 solar energy zones. We're currently working on a regulation that would provide for competitive leasing within those solar energy zones. However, until those regulations are developed, and they're currently at OMB pending review, until those regulations are finalized, we have developed an interim process, that we're making some parcels of land within the solar zones available on an interim competitive basis. We have a competitive auction that's coming up, to offer six parcels within one of the solar energy zones in Nevada. That auction will be held on June 30th, the end of this month. We're hoping for a very successful competitive auction. The Power Utility in Nevada has announced that they will be making an offer to purchase some additional solar capacity in the State of Nevada. We have several companies that are lining up that would like to compete, to have an opportunity to develop some of that BLM land within the Dry Lake solar energy zone in Nevada to compete for that offer that the Utility in Nevada will be making the later part of this year. Some of the values of designating these solar energy zones is that we've upfronted a lot of the permitting process. We've completed NEPA analysis, when we did the Programmatic EIS. Therefore, site specific NEPA reviews should be streamlined for individual projects within the SEZs. We've already done Section 7 Consultation for each one of the 17 SEZs with the Fish and Wildlife Service. We've already completed our Section 106 Compliance Efforts. We've developed a Programmatic Agreement with the individual SHIPPOs, and the individual states to address Cultural Resources Management. We already initiated our Tribal Consultation procedures for each one of the 17 SEZs. We've engaged the public in defining where those 17 SEZs are, and what the appropriate mitigation measures would be for development within those SEZs. We developed site specific design features or stipulations that would be required for any development within those areas. We've developed offsite mitigation plans within the SEZs. We're working on developing long-term monitoring programs as well. Our proposed rule that we're working on, also includes some financial incentives to encourage develop within those solar energy zones as well, and to preclude other types of uses that may occur in these solar energy zones. We've also withdrawn the solar energy zones for other types of mineral entry, including mining claims, to preclude any conflicts that might occur in the future so that those areas are dedicated and focused towards solar energy development. I gratefully mention the Competitive Rule. The Competitive Rule is currently at LMB going through review. That Competitive Rule, we hope to have published before the end of this year, go through the public comment period, address any public comments that we receive, and then finalize a final rule probably in 2015. The scope of that role will include the procedures for offering lands through a competitive leasing process, will include a nomination process, very similar to how oil and gas, and geothermal is handled on our public lands, and provide for a competitive bidding process to make those lands available through a competitive process. With that, I'd like to conclude my presentation, and open it up to some questions from the audience here, as well as from our webinar participants also. Malka: Let's start with questions from a local. Any questions? Audience Member: Hi, Ray. One of the things that peaked my interest, was you said that you were offering the applicant incentives to develop lands for solar energy. What type of incentives is BLM looking at? Ray: As I indicated, one of the financial obligations that companies have when they have an authorization to be on public lands is the rental payment. One of the proposals that we have in our proposed rule is to have a delayed payment schedule for leases that we would issue and designate to leasing areas. Then we would have a different rental schedule and payment plan for leases outside of solar energy zones, for example. So that would be one incentive is to provide for a delayed payment of rentals for leases within the SEZs. We're also looking at the competitive bidding process and see if we can provide some opportunities for discounts for the bidding process. This is a very similar process that BLM developed for offshore wind leases, as well, that if a company is better qualified, if they have a PPA, or a Power Purchase Agreement in hand, they're more likely to proceed ahead with development on a more quickly time frame. There are some economic advantages to having a PPA or other things in place by a company that has a lease. We feel that there are opportunities to provide, possibly, some discounts to the bidding process for those companies that are better prepared to proceed ahead. So those would be some examples. Malka: Any questions from the Internet? No. OK, we're going to monopolize. Audience Member: Hi, thank you. The first thing I want to say is, being from Nevada, thank you for pronouncing it correctly. Audience Member: Because it's very rare that we see that far from the state. I had a couple of different questions. The first one is minor I think. In regards to the solar tower, you mentioned that there is some use of water, so is that considered purely solar or is that also considered like a hydro hybrid source of energy? Ray: There's a variety of different solar technologies. There's the PV technology, photo voltaic technology, which is basically the solar panels. There's a very small amount of water use for PV facilities. There's some water use during the construction period to keep dust down while they're constructing the facilities. Occasionally, they will wash the PV panels, some of the projects that we have right now they haven't even washed the panels because they haven't seen any reduction of the generation capacity even with the thin film of dust on the PV panels. Very small water use for PVs type of solar technology. The other technology that we've talked about here is concentrated solar power which is the solar power towers, is one example. That is a closed-loop system for the water that's being circulated to generate the steam. There are two types of cooling methods that are used in a steam generated power plant facility. You can either use wet cooling to cool down the water that is used during the steam generation process or you can use dry cooling. Because of concerns about the amount of water that would potentially be used by a water-cooled system, most of these solar facilities, the concentrated solar power facilities that are generating steam, most of those have gone to dry cooling to significantly reduce the amount of water requirements for a solar facility. Audience Member: Perfect, thank you. If I may, a second question which is a different type of question. We discussed a little bit about the tribal development and in line with that thought, my experience is with an Indian country and solar products with regards to tribes. One of the major hindrances to that is the development of transmission lines. My question for the BLM perspective is how much is that is a limitation for the BLM or how much of it is a consideration for creating new projects and what is the thoughts about others being able to tap into those transmission lines after they're established? Ray: Well, specifically for opportunities for renewable energy development on tribal lands, BLM has placed a very high priority. BLM does not permit the facility on the tribal lands. That's a process that as you know, BIA and the tribes jointly work on. So BLM does not permit the facility on the tribal lands itself. However, BLM has placed a very high priority on facilitating the approval process for the transmission lines that might go off of the tribal reservation and cross BLM public lands. BLM would have to issue a Right of Way Authorization for the transmission line connection and BLM has placed a priority on those projects. BLM, jointly with BIA approved the first solar project on the Moapa Indian Reservation in Nevada last year or a year and a half ago. We just recently completed the approval of the second solar project on the Moapa Indian Reservation in Nevada, as well. BLM has also supported wind development on tribal lands and last year we approved the transmission connection for the Tule Wind Project in Southern California. The Tule Wind Project included some wind turbines on BLM land but it also included some wind turbines on tribal lands, as well. BLM facilitated and expedited the approval process for the transmission line for that project, as well. Audience Member: Hi, I had a question about the leasing. You're talking about that you've isolated the specific areas of land just for the wind or the solar. Is there a driving reason why we're not double leasing say...with the picture you're looking at right there, I don't see a whole lot of reason in my mind why we wouldn't also be able to lease the same land for oil or gas exploration as long as the physical components don't collide so to speak, in terms of their footprint. Is there a reason why we can't do that with BLM land? Ray: We can do that. The withdrawal that I spoke about, the withdrawal was only for the entry of mining claims. We can issue oil and gas leases on the same land that we authorize a wind turbine facility or a solar development facility. The reality is that we've had very few of those conflicts. Generally, the oil and gas development areas are in other areas than we have wind and solar potential. However, one example would be in Wyoming. In Wyoming, we have a lot of the wind potential. We have quite a few wind applications that are pending that we're working on and as you know Wyoming is one of our primary oil and gas producing states as well. So we are going to have areas where you're going to have oil and gas development and wind development specifically in Wyoming. Audience Member: Hello, Ray. It's Rick Carny. Can you speak for a moment about the Desert Renewable Energy Conservation Plan in Southern California? Ray: Thank you. The question was on the Desert Renewable Conservation Planning Effort in Southern California. This is a joint planning effort between the federal government and State of California to address renewable energy development in Southern California and to also try to identify appropriate lands that would be set aside for conservation purposes, as well. We completed the Solar Programmatic EIS in 2012. That was limited to planning only for solar development and only a land use planning effort for BLM managed public lands in Southern California. The Desert Renewable Conservation Planning Effort is going to expand the scope and scale of that project to not only the BLM managed public lands but also private lands in Southern California to comply with the planning requirements required under the California Environmental Quality Act and planning requirements in Southern California. That planning effort is underway. It's expected that before the end of this year a draft plan will be released for public review and comment. Again, that will be a joint planning effort, state and federal and based upon those public comments that are received for both the state and the federal planning process, those comments would be considered as a final plan is developed and final applications of land for either conservation purposes or for development purposes. It will address solar, wind, geothermal and also the conservation values of some of the lands in Southern California. Malka: We have a very silent Internet. Anyone else in the room with questions? Audience Member: Jonathan Steele with the Office of Policy Analysis. It seems like, just from the optics, there's a lot of interest in solar but I'm interested...Is there continued interest in geothermal projects, are you seeing additional applications for geothermal projects, as well? Ray: With the bump up in natural gas production, and natural gas kind of picking up the short fall with some increased generation capacity that's needed, in the short term, natural gas has really been the player with new electrical generation capacity. However, the fastest growing new capacity that's being built in the United States has been wind and solar capacity. Now, wind, as I indicated when you see the wind potential, most of that wind development has been occurring on non-federal lands because that's where the resources is. The reason that solar has been such a big player with BLM is, again, when you look at resource maps, that's where the solar potential is. Over 50 percent of the new capacity that BLM has approved has been solar generation. Geothermal has some challenges because geothermal is focused on very small resource development areas. Most of those resource development areas have already been leased. And developing a geothermal power plant based upon identified geothermal resources is a significant cost venture and it does require transmission capacity to bring that resource to the market. There are some constraints right now, not only for geothermal but also for wind and solar, of needing additional transmission capacity and transmission planning is multi-year process. It takes a long time for utility companies and transmission providers to develop new transmission lines in the West. Transmission has really been the constraint. But for geothermal, it's because geothermal is a much more defined, restricted resource where you can actually develop it. Many of those areas have already been leased, so we're not talking about new leasing. Audience Member: I just had a question about how the power's being used. When you're talking about a lot of capacity, I'm just wondering who is the customer. Is it a private homeowner in that area? Can you purchase from these companies or from BLM or how does that work...how is it being used? Ray: As I indicated previously, each of these developers either solar, wind or geothermal, enter into a Power Purchase Agreement, a long term Power Purchase Agreement with the utility to provide power to that utility. That utility is looking at a long term certainty about what the electricity price is going to be for what they're going to purchase the power for. So that's why they enter into a Power Purchase Agreement. All of these utility-scale projects, these very large projects, are sending electricity on to the transmission grid. The transmission grid then is providing that electricity to the utilities like Southern Cal Edison, LA Water and Power, Pacific Gas and Electric, et cetera. So those major utilities are the utilities that are buying the electricity and then their customers are acquiring their electricity through that utility. Audience Member: You mentioned solar energy zones and the competitive auctions for solar. Is there a parallel effort for wind, like wind energy zones and competitive auctions for wind? If not then, how do you gauge when there's competitive interest or non-competitive interest? Ray: When we completed the Wind Programmatic EIS in 2005, we did not, at that point in time, identify these designated leasing areas like we have recently for solar. What we generally did for wind was identify lands that were available for wind applications and lands that were not available for wind applications. We're focusing more of our wind...assessing the next step in wind. We're doing that more on a local land use basis instead of doing a broad West wide effort for solar. When we do an individual land use plan, like in the Las Vegas area, we would look in the Las Vegas area when we do that land use plan and see if there's an appropriate location where we might designate a wind development area. Most of the major wind development areas have already been defined and they're already generating wind electricity, example is the Palm Springs area. The Palm Springs area is a major wind development area that's already generating electricity. We've got both BLM federal land there and there's also private land in the Palm Springs area. If we had an in-holding of BLM land that did not have a wind turbine or a wind project there, then that would probably be an appropriate location to do a competitive offer. Our existing regulations that we have currently have that authority to do that, and for wind, we have, in the past, done a couple of competitive offers for wind development. The success of those has varied over time so I think they are going to be more opportunistic for wind than they are for solar. Solar, I think, BLM can kind of be in the driver's seat and we can be proactive to offer lands for solar. Wind is probably going to be more opportunistic on some of these very site selected areas where you already have wind development occurring. Malka: We have a question from the Internet. I was beginning to wonder if someone had thrown the switch off. Audience Member: Ray, could you please discuss revenues that the different energy sources are providing, and what sort of forecasted revenues might come in the future? Ray: OK. The question was on revenue generation from both solar and wind, and geothermal. Our current revenues from solar and wind, those revenues total about $10 million. However, those revenues are anticipated to significantly increase over the next few years up to over $50 million of revenues. All of those revenues go to the General Treasury. The reason that there will be a substantial uptake in the revenues from wind and solar is because many of those facilities are still pending construction or under construction and the megawatt capacity fees don't kick in until you have an operating facility. So those revenues are going to substantially increase over time. The current revenue is about $10 million. Geothermal revenues are based on royalties on actual production generation, very similar to how we collect revenues for oil and gas production. The current revenues for geothermal is about $16 million and we're projecting those revenues to go up in the next few years maybe to a little bit over $20 million. That answer the question? Malka: Impressive, right off the top of your head. Audience Member: My question is, understanding that we don't collect royalties for solar and wind, is there any thought in the future to somehow collect the information, maybe in a general sense, of how much power is being produced from these plants. I know that's probably proprietary in some ways so we can know how much power is produced? Ray: It's correct that we do not collect data on the actual power generation and I think there are some reasons on the solar and wind side. If we collected royalties for solar and wind, which we don't have the authority to but there's been some pieces of legislation pending in Congress to establish a royalty provision for wind and solar. If we collected a royalty, that royalty would be collected only when the plant is generating electricity. As you know solar is only going to generate electricity during the day when the sun is shining. Wind is only going to generate electricity when the wind's blowing. The rental structure that BLM developed, for both wind and solar, is not dependent upon when the facility is generating electricity or not. It's based upon the megawatts size of the facility. So the facility could be totally shut down but BLM is still going to collect rent because we collect rent on the megawatts size of the facility, regardless of whether it's producing or not. There are estimates of what these facilities generate. Generally, the efficiency is in the 30 percent range. If you have a 100 megawatt facility it's generally going to be generating about 30 megawatts of actual electrical generation. The way we developed our rental structure, part of the methodology or the formula that we used is based upon that efficiency factor that varies from technology to technology. Malka: Question from the Internet. Audience Member: This is a lengthy question so I'll just read it. It's from a tribal employee. Tribes in the vicinity of the Riverside East Solar Energy Zone bear a greater burden of cultural resource impacts due to BLM's emphasis on development in this area. Why allow and even encourage the use of so much untouched desert land when other previously disturbed lands are readily available? Where's the balance in your view? Ray: The question was specifically on the Riverside East solar energy zone in Southern California, which is our largest solar energy zone that was designated by the Programmatic AIS. The question related to that, that also to the methodology of how we consider cultural resource impacts on solar development projects and the consultation process with tribes. BLM is very serious about our tribal consultation process. We work very closely with the tribes, we work very closely with the tribes when we initially designated the 17 solar energy zones, but we also do ongoing tribal consultation when we have individual solar projects within the zones, and when we have individual solar projects outside the zones as well. That's an ongoing process. We work very closely with the tribes, and also with SHPO, which is a State Historic Preservation Officers in each of the states when we have projects where we're required to do culture resource clearances and surveys. There are active surveys and clearances that are done during construction of a project to make sure that we're mitigating any of the cultural resources that are discovered during construction of these projects. There are some areas of some of these projects, if they have significant cultural resource impacts that have been identified to not be developed, and to set aside for protection of the cultural resources that exist there. We are serious about our tribal consultation procedures and we'll continue to work with tribes and other parties who are concerned about cultural resource impacts, as well. Malka: Questions in the room? Audience Member: Thanks. Ray, now that there's a wind and solar PEIS, are applicants following, and going to those areas that you all have determined as in the green-light areas? What happens in those situations, or are there situations where that pre-date that says is in the variance areas that there's other projects that are out there, what happens with them or are they being encouraged to go to the SEZs? Ray: Right, we did have some grandfathered applications that existed prior to the decisions being made in the solar programmatic EIS. We continued to work on this grandfathered applications. Some of those grandfathered applications were within the SEZs, specifically the river side E SEZ in California. We have a large number of applications that already existed in that SEZ. We will continue work on those grandfathered applications. When we started out, we had over 300 solar applications. Many of those were determined, they are not viable projects and the companies themselves withdrew their projects or BLM issued decisions rejecting their applications. We went down from over 300 solar applications to now we've got like 70 solar applications that are being processed. Some of those are going to continue to either go by the wayside, be withdrawn or be rejected, or of a handful of grandfathered applications that will complete the process in full. Fortunately, we are in kind of a soft market right now, so we have not had a lot of new applications being filed. So hopefully, during this transition period, BLM is going to have regulations in place, and then we are going to be able to determine where the competitive interest is for future solar development within the solar energy zones, and then we will offer those lands to competitive process to make them available. We're going to get rid of the grandfathered applications and we're going to focus on those applications and competitive interests that we have in the remaining lands that will be on the solar zones. Malka: Final question from the Internet. Audience Member: This is a follow on to the previous question, could you talk a little bit about how the state of the land, either in disturbed or undisturbed, influenced its determination as solar energy zone. Ray: We are trying to provide a priority for projects that are on previously disturbed lands. However, when you look at previously disturbed lands, most of those lands are small acreage site locations, and don't really facilitate opportunities for these large utility scale projects. BLM is trying to provide a mix, or a balance between small projects, which generally have been located more on private lands closer to urban development areas. They're not BLM lands, so these distributed generation site locations, which are being developed, have generally been on private lands, because they're closer to the urban areas, to provide electricity to those urban areas. The larger utility scale projects are those projects that are being sited generally on the beyond public lands. They have to connect to the electric grid someplace to bring the power into Southern California, into the LA market area. However, BLM has an opportunity to approve smaller projects, or to approve connected actions for facilities on private lands. BLM will place a priority on those, and some of the smaller projects that you've seen. Many of the connected action projects that BLM has approved, hadn't been those distributed generation projects, so that we have a balance of big projects and small projects, and so we're trying to provide opportunities where we can to facilitate that. Malka: Thank you all, and please join me in thanking Ray Brady.