A Utah energy developer is hoping to build the state’s first major solar project on state land in Millard County.
The 300-megawatt Utah Solar I, covering 1,754 acres managed by the state School and Institutional Trust Lands Administration, would generate enough electricity to supply 80,000 homes and cost $600 million to build, according to proponent Energy Capital Group.
The Provo-based firm already executed a lease with SITLA and is seeking permits to develop the site 10 miles north of Delta near the coal-fired Intermountain Power Plant. The company hopes to deliver green power to Southern California through existing high-voltage direct-current transmission lines serving the plant, said Energy Capital CEO Josh Case.
“We are going through the system-impact process and feasibility process, and we also securing the power-purchase agreements,” Case said. “SITLA has been great to work with and by dealing with them we are supporting school kids in the state.”
The deal is worth potentially tens of thousands in potential income to the school trust fund supported by state lands and seen as a boost Utah’s rural economy.
According to SITLA documents, the lease will bring in about $21,000 in annual rent, plus $87,714 paid up front and another $500,000 when operations commence. The company will also pay SITLA a 2.65 percent royalty on the power it sells.
As proposed, Utah Solar would be among the largest photovoltaic projects in North America. While Utah holds much potential for harvesting the sun’s rays for power generation, the state’s photovoltaic capacity has yet to develop.
Some blame Utah’s reluctance to impose renewable-energy portfolio requirements on utilities. Still, federal land managers have been eager to accommodate new solar development.
The Bureau of Land Management has identified 17 “solar energy zones” in Southwestern states, including three such zones in Utah. They are in western Iron and Beaver counties, totaling 18,658 acres capable of about 2,000 megawatts of generating capacity.
To date no developer has expressed interest in Utah’s three federal zones, according to BLM. It’s no surprise to state officials that the first solar project proposed for Utah is not on federal lands.
For one thing, the state-owned Delta site is conveniently located beside a transmission corridor that feeds a market hungry for renewable energy sources.
“That makes it so our resources are effectively in [California’s] backyard. These guys have hit on something. A project next to IPP can be a real player in the California market,” said Jeffrey Barrett with the state Office of Energy Development.
California utilities are required by law to get one-third of their power from solar, wind and other renewable sources by 2020 as way to reduce carbon emissions.
Also, a solar proposal on state lands faces fewer regulatory hurdles than were it located on federal land.
The project would not be eligible for the production tax credit Utah reserves for other forms of renewable energy, but it could secure an incentive the state extends to those developing alternative energy, according to Barrett. That incentive amounts to a refund of three-quarters of all tax revenues the project generates to the state for its first 20 years of operations.
Case hopes to begin construction, expected to employ 200, in the next two or three years. Timing depends on how quickly Energy Capital can secure purchase agreements and funding. If necessary, the project would be built in phases.