Nevada solar build surges but federal land brings political risk

Solar activity is soaring in Nevada on the back of population growth and a surge in export opportunities but federal land decisions will be key in an election year.

Despite a relatively small population, Nevada has become a major solar and storage market as developers capitalise on large land areas and strong solar resources. The south-western state is predicted to double its solar capacity to over 13 GW over the next five years, according to the Solar Energy Industries Association (SEIA).

Rapid population growth in Nevada is driving up power demand and the expansion of transmission capacity will increase export opportunities to bordering states such as California and Idaho.

Nevada produces roughly a quarter of its electricity from solar, so there is still some way to go before it hits its renewable portfolio standard (RPS) goal of 50% by 2030, Eric Wright, senior analyst, clean energy technology, S&P Global Commodity Insights told Reuters Events.

Solar share of electricity sales by state in 2022

                                 (Click image to enlarge)

Source: Berkeley Lab, October 2023

Nevada could need up to 25 GW of solar and storage capacity within the next 10 to 15 years, including 10 GW to cover in-state demand and 15 GW for supply to neighbouring states, according to Arevia Power, a developer of large solar and storage projects.

Neighbouring states will play a greater role in the future, Ricardo Graf, Chief Development Officer and Managing Partner at Arevia, said. Arevia developed the giant 690 MW solar/380 MW storage Gemini project in Nevada before it was eventually sold to Primergy Solar and the group is currently developing over 5 GW of solar projects in the state.

Graf pointed to planned grid expansions and recent progress in integrating utilities into the patchwork of markets across the Southwest.

California will be a major buyer of Nevada’s solar power. About 10 GW solar could be developed in the Amargosa and Esmerelda regions in south-west Nevada when the GridLiance West transmission project is completed, Graf said. GridLiance West consists of two Nevada grid projects that are scheduled to be completed by the end of 2027 and the solar power could be sent to California or other markets.

The federal Bureau of Land Management (BLM) manages 80% of Nevada's territory, making it a crucial player in solar and storage growth.

Development on BLM land has accelerated as the Biden administration pursues ambitious decarbonisation targets but important decisions loom for the bureau. The BLM will set out this year its latest solar development plans and a Trump win in November's presidential election could impact BLM priorities.

“Arevia is actively working to hedge our development strategies/deliveries, regardless of which administration is in office, in the event that [anti-dumping and countervailing duties], tariffs, executive orders, etc. negatively affect the solar and storage development space,” Graf said.

Clean connections

About 90% of all Nevadans live within 50 miles of California and the two transmission systems are already interconnected. In April, California's grid operator CAISO set out plans to invest $6.1 billion in 26 grid improvements to connect new renewable energy projects by 2035, including new connections with southern Nevada.

CAISO's grid expansion plan represents a second instalment of forward bulk transmission planning, instigated for the first time last year to provide greater clarity to developers and reduce future connection delays.

                          US power capacity in grid connection queues

                                                                (Click image to enlarge)

Source: Berkeley Lab, April 2024

Planned expansions include the SWIP-North interconnector, which will allow California to import wind power from Idaho and Wyoming while also enabling Idaho Power to procure solar power from Nevada, Graf noted.

Other key transmission projects include the Cross-Tie, Gateway West and TransWest Express expansions. Combined, the grid projects would boost clean power development in several states, including Utah, Idaho, Wyoming, Montana, and Arizona, Graf said.

Meanwhile, huge projects are being developed on Nevada's expansive public land areas. The Gemini solar and storage project is located entirely on BLM land and in January the bureau released its draft environmental analysis for three further solar and storage projects in Nevada that could be some of the largest in the United States. Arevia Power’s 700 MW solar/700 MW storage Libra Solar project, Candela Resources’ 400 MW solar/700 MW storage Rough Hat project and NextEra Energy’s 200 MW solar/200 MW storage Dry Lake East project are now undergoing public consultation. BLM has also started environmental analysis on another NextEra project, Dodge Flat II, which would incorporate 200 MW solar and 200 MW storage capacity.

Federal decisions

The amount of utility-scale solar deployment on public lands in the coming years will depend on many external factors, including federal and state support mechanisms and the availability of transmission capacity, BLM spokesperson Brian Hires said.

To accelerate deployment, the Biden administration has implemented a range of improvements to BLM processes, including the creation of Renewable Energy Coordination Offices (RECOs) to coordinate development, lower land rents and fees for projects, the prioritisation of projects with fewest adverse impacts on the environment and the expansion of the Western Solar Plan for priority development.

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By April, BLM had permitted almost 29 GW of clean power and transmission projects, surpassing its 2025 target of 25 GW, and was processing permits for a further 32 GW. The bureau was also undertaking preliminary reviews of nearly 200 applications for solar and wind development, as well as more than 100 applications for solar and wind energy site testing.

The Western Solar Plan currently spans six states and offers a combined environmental impact statement to developers in areas with high solar potential and minimal conflict with other uses, to streamline approval processes.

In January, the BLM published a new draft plan that identifies 22 million acres for utility-scale solar development in 11 states located within ten miles of existing or planned transmission, alongside alternative scenarios. A public consultation on the plan ended in April and BLM is due to publish a final plan in late 2024.

Arevia favours an alternative scenario, with some adaptations, that would open up 55 million acres, Graf said.

The BLM's preferred proposal "would limit possible solar development in Nevada," he warned.

Reporting by Neil Ford

Editing by Robin Sayles