Burned on solar

  • Article by: JASON DEAREN , Associated Press
  • Updated: September 9, 2010 - 10:16 PM

A federal program to lease prime land to produce solar power has largely ended up in the hands of companies, including Goldman Sachs, with little energy experience and few plans for development.

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Greg Helseth of the U.S. Bureau of Land Management stood on the Roach Dry Lake bed in front of a proposed solar energy site near McCullough Pass, Nev. The bureau’s solar leasing system opened up tracts of public desert to developers, who snapped up leases but have yet to break ground on any solar farms.

Photo: Laura Rauch, Associated Press

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ROACH DRY LAKE, NEV. - Not a light bulb's worth of solar electricity has been produced on the millions of acres of public desert set aside for it. Not one project to build glimmering solar farms has even broken ground.

Instead, five years after federal land managers opened up stretches of the Southwest to developers, vast tracts still sit idle.

An Associated Press examination of U.S. Bureau of Land Management records and interviews with agency officials shows that the BLM operated a first-come, first-served leasing system that quickly overwhelmed its small staff and enabled companies, regardless of solar industry experience, to squat on land without any real plans to develop it.

At a time when the nation drills ever deeper for oil off its shores even as it tries to diversify its energy supply, the federal government has, so far, failed to use the land it already has -- some of the world's best for solar -- to produce renewable electricity.

Nowhere is this more evident than in Nevada, where a Goldman Sachs & Co. subsidiary with no solar background has claims with the BLM on nearly half the land for which applications have been filed, but no firm plan for any of the sites.

The Obama administration says it is expediting the most promising projects, with some approvals expected as soon as September. And yet, it will be years before the companies begin sending electricity to the Southwest's sprawling, energy-hungry cities.

"Clearly we spent a lot of time and effort on oil and gas, but those priorities have changed," said Ray Brady, BLM's head of energy policy in Washington.

Different priorities

Congress in 2005 gave the Interior Department a deadline: Approve 10,000 megawatts, or about 5 million homes' worth during peak hours, of renewable energy on public lands by 2015. Reaching that goal was left to the BLM, which oversees federal land and knows oil, gas and mining leases but is new to solar.

The Bush administration, however, kept BLM's focus on oil. BLM's database of solar applications shows many languished for years while the agency approved more than 73,000 oil and gas leases in the last five years. BLM has yet to give final approval to one solar lease.

BLM's solar leasing system ended up allowing developers to lay claim to prime sites -- many located in the deserts that span California, Nevada and Arizona. All developers had to do was fill out an application, pay a fee and file development plans.

But many were so vague that it was difficult for BLM to separate the serious projects from the speculative ones.

"People were making [solar] applications on federal lands not knowing what kind of technology to propose and ... how to develop the land," Brady said.

In the Southern California desert near Palm Springs, for example, San Diego-based LightSource Renewables filed an application in August 2008 for 2,500 acres, BLM records show. The small, two-person development firm knew enough to recognize the land's worth -- it was close to transmission lines -- but had no previous experience with such projects.

Co-founder Paul Whitworth said it is now focusing on getting private land, and is not pursuing plans for its BLM site. The agency, however, still considers the application active, meaning other interested firms cannot access it.

"We don't know what technology will win or lose, and certain sites cater to certain technologies, but a good site is a good site," Whitworth said when asked why LightSource filed its application. The firm has never filed a development plan, records show.

While dozens of smaller firms like LightSource joined in the rush, BLM records show two Goldman subsidiaries filed 52 of the 354 applications throughout the region, more than any other company.

Over the years, BLM rejected applications or companies withdrew them, bringing the total of active applications to 123. Now Goldman holds 10 of the 123, including eight that cover nearly half the land proposed for solar in Nevada.

For example, records show Goldman-owned Cogentrix Solar Services, the subsidiary with no previous solar experience and more development claims in the Southwest deserts than any other company, has a pending application for 13,440 acres in Nevada for a 1,400-megawatt solar plant, double the acreage other companies ask for. Another Cogentrix claim on land nearby asks for 22,400 acres for the exact, same-sized plant.

In Nevada alone, Cogentrix has applied for exclusive development rights on nearly as much federal land as all other companies combined. Its active lease applications cover about 120,000 acres -- the equivalent of more than eight Manhattans.

"Goldman Sachs was one of the first applicants to dot the map with potential projects, and since then they haven't moved on any of them," said Gregory Helseth, the BLM's new renewable energy project manager in southern Nevada. "You can't hold the land forever. You can't be a prospector and hope somebody down the road wants to buy."

A Goldman representative defended the firm's solar investments, saying the Wall Street titan has since gained experience through its 2009 purchase of an aged solar facility in San Bernardino, Calif., that it was moving forward in good faith and was not blocking anyone. The company also announced this month it had reached a deal to build a small, 250-acre project in Colorado on private land.

Under the Obama administration, more BLM staff like Helseth have been hired to help weed out dormant applications so developers better suited for the job can be found.

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