Settlement Advances 800 MW of San Luis Obispo Solar

By Published On: August 12, 2011

Two large multi-billion dollar photovoltaic projects in the Carrizo Plain overcame major hurdles after their developers reached a joint settlement with an environmental coalition. The debt-financed portion alone of the cost of the 550 MW and 250 MW photovoltaic projects combined is close to $4 billion. First Solar and SunPower reached a deal Aug. 5 with the Sierra Club, the Center for Biological Diversity, and Defenders of Wildlife, which challenged the two expansive projects over their potential harm to endangered wildlife. After the two solar firms earlier this year agreed to shrink their facility footprints to address environmental concerns, they subsequently backed expanding the amount of land they’ll set aside for critter conservation. Elsewhere, two large solar projects remained tangled in legal proceedings. With the settlement in hand, First Solar plans to build a 550 MW thin film project and SunPower to install 250 MWs of crystalline panels in the northern part of San Luis Obispo County known as the Carrizo Plain. “This is a very good example of solar companies and conservation groups coming together to grapple with the impacts of large projects,” said Brendan Cummings, Center for Biological Diversity public lands director. “To their credit, the companies have done a lot to mitigate the projects’ footprint, and are acquiring substantial land to offset harm to wildlife.” Greg Blue, SunPower director of regulatory affairs, called the deal “very significant.” He said it removes state and federal environmental challenges, making way for project construction, which is expected to create about 1,500 jobs. Gov. Jerry Brown’s office helped broker the legal settlements. “This is another step in positioning California as the national leader in solar technology,” Brown stated Aug. 9. Under the agreement, First Solar and SunPower agreed to buy an additional 9,000 acres of private lands to offset the projects’ impacts. The deal brings the total amount of land set aside for mitigating harm to the endangered San Joaquin kit fox and giant kangaroo rat and other species to 26,000 acres, or 40 square miles. Earlier this year, the solar projects were scaled back to address environmental concerns. First Solar downsized its Topaz project from 6,500 acres to 3,500 acres. SunPower reduced its California Valley Solar Ranch tracking project from 1,966 acres of previously farmed land to 1,500 acres (Current, Feb. 11, 2011). The cost of buying thousands of acres of land for wildlife mitigation under the settlement was not disclosed. “If we felt the mitigation conditions jeopardized the project we wouldn’t have finalized the agreement,” said Alan Bernheimer, First Solar spokesperson. “All these costs were built in,” according to Ingrid Ekstrom, SunPower spokesperson. At the end of last week, SunPower also won its final federal permit. The U.S. Fish and Wildlife Service issued its Findings of No Significant Impact under the National Environmental Policy Act. Construction is projected to begin in six weeks, Blue said. The settlement also satisfies the last condition needed for the Department of Energy to finalize its $1.187 billion conditional loan guarantee for SunPower’s 250 MW project. The company would not reveal how much of the project is financed by equity or debt. Debt financing consists of borrowed money, while equity financing represents money provided by company investors. Once the DOE loan guarantee is approved, the 250 MW project is set to be sold to NRG Solar. SunPower is expected to operate and maintain the project for ten years, Blue said. For the First Solar facility to reap its $1.93 billion conditional loan guarantee from DOE, which covers 80 percent of the project debt, construction must begin by Sept. 30. Bernheimer said building is expected to begin next month, but he noted that project financing is not yet complete. Bernheimer declined to provide the project’s planned equity-to-debt ratio. The U.S. Fish & Wildlife Service is expected to release its final Environmental Impact Statement Aug. 12 for First Solar’s 550 MW thin film photovoltaic project. It is to be finalized within 30 days, ahead of the end of September DOE deadline. This week’s settlement also requires fences near the project--and on the vast acreage to be set aside for wildlife--to be removed and for proposed fences to be modified to eliminate wildlife migration obstacles. In addition, First Solar and SunPower agreed to provide San Luis Obispo County an undisclosed amount of money for wildlife restoration and conservation The projects are to sit in the northern section of the Carrizo Plain, which is a fragmented landscape made up of existing and abandoned farms and grazing areas. The Southern section is protected from development by its National Monument status. The Carrizo Plain is considered optimal for solar projects because it is flat and one of the sunniest areas of California--with an average 315 days of sunshine a year. In addition, the ready availability of high voltage lines running from the Diablo Canyon nuclear power plant make it easy to feed solar energy into the grid without building new lines. Pacific Gas & Electric agreed to buy the solar output from the combined 800 MW of photovoltaic capacity. Elsewhere, legal disputes over the impacts of two other large solar projects, one in San Benito County and the other in the Mojave Desert, remain unresolved. The 400 MW Panoche project in San Benito is slated for thousands of acres of land owned by the Westlands Water District. Sierra Club and local environmentalists are challenging the project, claiming it would harm endangered foxes, rats, and lizards. The project was proposed by Solargen. A new firm, PV2 Energy, recently bought a majority interest in the project. Court hearings continue on BrightSource Energy’s 370 MW Ivanpah solar thermal project, which is under construction in the Mojave Desert. In April, it was earmarked for a $1.6 billion DOE loan guarantee.

Share this story

Not a member yet?

Subscribe Now