The Bureau of Land Management unveiled plans last week to establish a rule that would allow wind and solar companies to bid for leasing rights on public lands, a move designed to increase competition and boost revenues to taxpayers.

The agency also announced the approval of two new transmission lines that would clear the way for roughly 380 megawatts of new solar and wind plants in the West.

The Centinela Solar Energy Project in California and the Steens Mountain wind project in Oregon, both on private lands, are the 26th and 27th renewable energy proposals the United States has approved over the past two years, Interior Secretary Ken Salazar said.

The approvals were a bright spot in an otherwise bleak week for the renewable energy industry, which watched the expiration of a popular Recovery Act grant program and Congress' decision not to extend clean energy tax credits that expire at the end of 2012.

Despite the setbacks, BLM Director Bob Abbey said a competitive leasing process for wind and solar projects on agency lands will help level the playing field as investors move to secure development rights on sun- and wind-rich lands across the West.

"The renewable energy resources on America's public lands are enormous," Abbey said in a statement. "The competitive options we are evaluating are part of our commitment to improving the process by which we provide access for responsible renewable energy development while providing a fair return for the use of the public lands."

The leasing proposal, which is supported by conservation groups and wildlife advocates, would ensure equal access to lands for renewable energy development while capturing fair market value, BLM said.

The agency will accept public comments through the end of February on issues including how a competitive bidding process should be structured; whether leasing should be allowed outside of solar and wind energy zones; how long leases should last; how bond amounts should be determined; and what due diligence steps should be required, among other things.

The notice of proposed rulemaking comes as BLM pursues a zone-based approach to solar development that aims to speed permitting in areas that minimize environmental harm (Greenwire, Dec. 23, 2011).

"We don't know what the reaction [to competitive leasing] will be, but we think it will be positive because it provides a more equal playing field for folks to enter into this business," Interior Deputy Secretary David Hayes said in an interview at a solar forum in late fall.

"It's sort of the American way to have competitive opportunities to access resources," Hayes said. "Certainly the incentives are there to attract competitive bidding."

In the solar zones, incentives could include faster environmental reviews, cheaper resource evaluations and financial perks, among other things.

While competitive leasing is already used to divvy up public lands for oil and gas development, wind and solar companies currently must submit right of way requests that limit competition and, in the past, have been hindered by mining claims.

But while leasing has proved successful for oil and gas, it may be too soon for solar firms to competitively bid for public lands, said Rhone Resch, president of the Solar Energy Industries Association.

"We're talking about the first two or three projects being under construction now on federal lands ever," Resch said in an interview last month. "I think you need to develop a mature industry before you start having a competitive bidding process."

Resch warned that some early-stage developers could out-bid newer companies, effectively boxing them out of the competition.

But he credited the Obama administration for taking unprecedented steps to jump-start commercial scale solar development on public lands after years of inaction by the George W. Bush administration.

"This administration has done more to site and permit large-scale solar projects on federal land than all other administrations to date," he said. "In large part, I think the administration has made a commitment to come up with a process that is clear and transparent for developers so that they can understand the rules of the game."

The leasing announcement drew cheers from the American Bird Conservancy, which praised BLM's decision to identify wind energy leasing zones.

"Wind energy development zones, if done right, could be helpful to both birds and wind energy development," Kelly Fuller, ABC's wind campaign coordinator, said in a statement. "Siting is the most important step in make wind energy bird-smart, and [ABC] is developing a map of the areas where wind energy would be most risky to birds."

New project approvals

BLM's approval last week of two transmission lines to connect new solar and wind projects followed its approval a week earlier of a 300-megawatt solar photovoltaic project in Arizona and the 186-megawatt Tule Wind Project in California.

Interior also inched closer to a decision on a massive proposed transmission line off the East Coast that would help funnel electricity from offshore wind farms to mid-Atlantic states (E&ENews PM, Dec. 20, 2011).

In total, Interior has permitted 16 utility-scale solar energy facilities, four wind projects and seven geothermal plants over the past two years that will produce an estimated 6,600 megawatts when brought online, the agency said. The administration appears poised to beat Congress' goal in 2005 of permitting 10,000 megawatts of non-hydro renewable energy by 2015.

"These projects are strengthening local economies by generating good jobs and reliable power," Salazar said in a statement.