RENEWABLES:

Interior's permitting pace dwarfed by China

The Interior Department's announcement yesterday that it had issued permits for two solar plants in California -- the first ones ever on federal public lands -- is being hailed as a momentous step by environmentalists and regulators.

But energy analysts say the step forward is overshadowed by China's speed in issuing permits for renewable energy generation.

"We have 2 turbine manufacturers. They have 83," Michael Eckhart, president of the American Council on Renewable Energy, said at a recent finance conference in San Francisco.

The reasons for China's ability to race past the United States, he and others said, is a complex combination of population, motivation, policy, finance and permitting.

In 2008, China had nearly 80 gigawatts of renewable energy capacity installed, compared to about 40 GW in the United States. China also has a goal of reducing the carbon intensity of its economy 40 to 45 percent below 2005 levels by 2020. It has a goal of approving feed-in tariffs of 7 to 9 cents per kilowatt-hour for wind, and wants to ramp up its non-fossil-fuel energy to 15 percent in the next decade.

Derek Scissors, a research fellow in Asian studies at the Heritage Foundation, said the approval of two solar projects like the ones slated for Southern California wouldn't attract such attention in China.

"The contrast there is that all land is state-owned in China, and state land is for development," he said. "The process is much less formal -- like signing a document compared to a handshake in a back room," he said.

'Caution to the wind'

Scissors explained that there are three levels of companies in China: national, state-owned firms; local, government-owned firms; and local, privately owned firms without direct ties to the state. The lowest level of firms typically run into many more hurdles than the other two, until the central government's National Development and Reform Commission decides to encourage a specific type of development. At that point, he said, it's hard to predict how much the country might build.

"In the situation the Chinese are in right now, there's essentially no barrier," he said. "It's all caution to the wind. It's not a permanent situation, but it's essentially true right now."

Johanna Wald, who worked on the two U.S. deals with state and federal officials in her capacity as a senior attorney with the Natural Resources Defense Council, said the United States would never reach China-speed permitting. But, she advocated a stronger federal role.

"We have laws that we have enacted to protect environmental values and provide members of the public, in this case the owners of the land that we're talking about putting these projects on, so that they can participate," Wald said. "We're not going to get to a situation where it's a slam-dunk, but I believe that we can get to a situation that is significantly shorter than four years.

"The Interior Department needs to play a proactive role, rather than responding to projects on a first-come, first-served basis, which is what we've seen here. They need to develop a program or a road map that will guide these kinds of developments to the least-conflicted areas or zones," she said.

The Bureau of Land Management's permit for the 709-megawatt Imperial Valley project comes 4 years after developer Tessera Solar first began engineering work. The other project, by Chevron Energy Solutions, is a 45 MW photovoltaic plant in the Mojave Desert (Greenwire, Oct. 5).

Interior Secretary Ken Salazar called the projects "milestones in our focused effort to rapidly and responsibly capture renewable energy resources on public lands," boasting, "It is an historic day."

Financing easier in U.S.

William Chandler, a senior associate with the Carnegie Endowment for International Peace and president of Transition Energy, which builds waste heat-recovery power plants in China, said there are plenty of permitting obstacles there.

"It's not all sweetness and light by any means," he said. "It varies from province to province and utility to utility, so it can take at least six months, and I've known some facilities that have taken two to three years to get approval."

The top-down government decisions don't always trickle down smoothly. But local government officials are becoming more responsive, since they face losing their jobs if they don't meet central government targets, he said.

"The regulatory pressure on the industrial sector is very high." Chandler said. "I cannot imagine it possible in this country and wouldn't have thought it feasible [in China] five years ago, except the Chinese somehow make it work."

Given the extreme dependence on the federal government for regulatory guidance, however, Chandler said he would rather build a solar facility in the United States.

"It's clearly better to make an investment here if you have one, because the rules are clearer, the contract law is more readily enforceable, contracts are more apt to be honored, and, believe it or not, financing is probably easier here," he said. "On the other hand, having 10 to 15 percent growth in electric power demand overcomes a lot of sins."