Thursday, September 3, 2009

Major solar farm planned in Panoche Valley

Thursday, September 03, 2009

By Adam Breen (

One of the largest solar energy projects in the United States, encompassing up to 30,000 acres in San Benito and Fresno counties and potentially costing $4 billion, is proposed for the rural Panoche Valley.

County planning officials are reviewing preliminary documents on Solargen Energy's proposal, as some residents of the rural area are questioning the merits of placing solar panels on land they say is both agriculturally productive and environmentally sensitive.

"They've given us a draft application that we're doing a cursory review on," said Byron Turner, assistant planner for San Benito County. "As we understand it, they are proposing solar panels on a 1,000-megawatt solar farm and ancillary facilities in a phased development at a rate of 200 megawatts a year."

In a July report, Solargen says that it has optioned "more than 13,000 acres of land and has letters of intent or is negotiating to acquire control of an additional 18,000 acres" between the two counties, in what it terms "a uniquely valuable area for solar energy development."

Michael Peterson, chief executive officer of the three-year-old company, said the total amount of land that would be developed in San Benito County under the plan would be 5,000 to 6,000 acres, 40 percent of which would contain solar panels.

The company's documents say the proposed solar plant site has 90 percent of the solar intensity of the Mojave Desert; direct access to the electric grid - as power lines cross the Panoche Valley; and is within 100 miles of large population centers of the Bay Area.

"The beauty of that valley is that engineers said it looks like God has created a solar farm there; plus PG&E lines run through it," Peterson said, noting that construction on the solar farm would take place over six or seven years, building from the center.

"You would think that there's a lot of sun in California, but in the Central Valley there's a lot of fog and on the other side of the valley there's coastal fog. The Panoche Valley has characteristics that are unique and good for solar."

Mitigation measures

The company's report notes that the land in question "is large, mostly flat, has lost most water rights, and is now grazing land." Other land would be set aside as "mitigation land" to allow for continued growth of native grasses and to provide access to native animal species, according to Peterson.

"We have approached this on an environmentally-sensitive basis," he said. "We've gone to the flat land of the valley and tried to acquire other land around the valley for mitigation. The land is farmed land that has been disturbed; it's not in its natural state. We would take this previously farmed and grazed land and have land set aside forever to compensate for any species that may be displaced through the projects."

Solargen has had talks with state fish and game and wildlife officials regarding potential mitigation measures to lessen the impact of the project on the environment and wild animals in the area. Peterson said the company will request that a mitigated negative declaration be approved by San Benito County, meaning a full environmental impact report (EIR) would not be required. Turner, however, said he expects that the project "meets the scope of an EIR," which would mandate more intense study and public review of development plans.

Residents' concerns

Maxine Davis, who owns land in the Panoche Valley, called the area "a unique area with little traffic or pollution."

"It's a place where one goes to escape the busy city life ... The thought of our beautiful valley being covered by a sea of black solar panels is frightening and would turn this pristine grassland into a desert and change it from a pristine grass valley to an industry area."

While she said she is a proponent of solar power and supports Solargen's plan to build its solar farm near existing PG&E transmission lines that run through the valley, Davis wondered why the company could not build its plant closer to the lines near Interstate 5, which is east of the valley in Fresno County.

"I am in support of solar power yet I do not agree with ruining an agriculture and wilderness area to financially benefit a private company because the land is less expensive for them to build a solar farm on than other areas," she said.

County Supervisor Reb Monaco, who has met with Solargen representatives, said that as is the case with nearly every development proposal that he has seen, "they all have some very positive aspects and some negative aspects."

He said the solar farm is "promising from an economic standpoint, potentially" though "the rub will come with how you deal with endangered species in the area. Obviously, you'll need an EIR. It has to be well planned out."

Monaco noted that the county has begun writing policy to address the concept of renewable energy in its general plan, spurred in part by Solargen's proposal.

Local financial impact

Peterson said the potential financial benefit to San Benito County is "absolutely huge. It may as much as double [the county's] tax revenue."

He said Solargen representatives have told county supervisors that "our goal is to generate a lot of employment that is local" perhaps working with regional job centers to commit to employing a certain amount of San Benito County residents.

"We're committed to employing as many local people as possible," Peterson said, adding that there would be construction jobs for six or seven years while the solar farm is built out in phases. He said up to 100 people would work on site, though final numbers have not been calculated.

There are no plans for Solargen to provide power directly to San Benito County residents, company officials said.

Company financing

Projected revenue figures in Solargen's July report, which predicted $15 billion in revenue and $5 billion in pre-tax profit over 25 years "is outdated," Peterson said. He said revenue estimates must wait until the company enters into "off-take agreements" with utilities to purchase the power generated by the plant.

"It could generate $8 or $9 billion in revenue," he estimated, adding that it will take $4 billion worth of capital to finance the project.

Since the Panoche solar farm would be built in phases over nearly a decade, "it doesn't have to be funded all at once," Peterson said. Panel manufacturers and "strategic investment partners" will provide the initial financing and other construction money can be secured against future anticipated profits.

Adam Breen
Adam Breen is a staff writer with the Weekend Pinnacle.

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