Native American Lands Have 61 Gigawatts of Economic Solar Potential; Federal Loan Guarantees Available

By Will Driscoll

Native American Tribes could install 61 gigawatts of utility-scale solar, and sell the resulting electricity wholesale at a profit, according to a report from the National Renewable Energy Laboratory (NREL).  The potential for a specific tribal land area may be analyzed using NREL’s online Tribal Energy Atlas.

A new $2 billion federal loan guarantee program for energy developments on tribal lands can assist with financing.

NREL’s analysis first identified the technical solar potential on tribal lands (6,035 gigawatts), then estimated the levelized cost of energy (LCOE) for each location, and compared that to the levelized avoided cost of energy (LACE), which is based on regional wholesale market electricity prices.  Where the LACE was higher than the LCOE, NREL identified “economic potential.”  The result was 61 gigawatts (GW) of economic solar potential.

NREL did not estimate or include transmission costs in the LCOE, noting that “a subset of sites would likely hold enough economic potential to be examined in more depth for additional inputs such as transmission cost and interest of potential energy buyers.”  (Electricity-intensive industries on tribal lands, possibly data centers, are another option that would not require transmission.)

Counterbalancing the omission of transmission costs, the analysis used solar cost data from 2015 and early 2016, and solar costs have declined dramatically since then.

The analysis used financing costs of 9.02 percent, from NREL’s 2017 Annual Technology Baseline report.  It also assumed a ten percent investment tax credit, and that Tribes would be able to partner with a taxable entity to benefit from tax-based solar incentives.

A sensitivity analysis using a recent low price of natural gas ($2.45/Mmbtu) yielded the same amount of profitable solar: 61 GW.  An analysis using a recent high price of natural gas ($7.18/Mmbtu) yielded a much larger amount of profitable solar: 266 GW.

If Native American Tribes added tens of gigawatts of solar to regional grids, the wholesale electricity price would decline during periods of high solar generation.  NREL noted that it did not model that scenario.  Were that to happen, solar-plus-storage could support the value of solar generation.

NREL’s report acknowledged some limitations of its analysis, noting that “Future work in the economic potential assessment may include incorporating both in-region and out-of-region transmission costs; environmental benefits; policy drivers, such as renewable portfolio standards; and any sensitivities to tax-oriented policies.”

Alaska Native villages were not considered in the analysis, although they are included in NREL’s Tribal Energy Atlas.

Michigan could create 69,000 job-years on a path to 30% renewables by 2027

By Will Driscoll

Michigan could generate 69,000 new job-years by reaching 30 percent renewables by 2027, per a report funded by the Michigan Conservative Energy Forum.  The 30% scenario, one of three considered, “was chosen based on the current growth factor of renewables,” and compares to the state’s recent 10 percent renewable percentage.

The analysis calculated that adding 3.1 GW of solar capacity and 4.7 GW of wind capacity by 2027 would generate 5800 job-years per GW in the construction phase.  That includes direct job-years (1600 per GW), indirect job-years in supporting industries (2400 per GW), and induced job-years, as direct and indirect wage-earners spend their earnings (1800 per GW).

Over the lifetime of the solar and wind installations, the report also estimated 3000 job-years per GW in operations and maintenance.  That includes 1200 direct job-years per GW; 1100 indirect job-years per GW; and 700 induced job-years per GW.

The Michigan Conservative Energy Forum’s website says it favors an “all of the above” energy policy “that includes increasing our commitment to clean, renewable energy and energy efficiency.”

The analysis was conducted by the Hill Group, using the National Renewable Energy Laboratory’s Jobs and Economic Development Impact (JEDI) model, as well as MIG Inc.’s IMPLAN model.

 

Will Driscoll, MPA, JD, is an energy and environmental policy analyst who has worked primarily for the U.S. EPA via the contractor ICF Consulting.