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Betting on Mother Earth

Jill Lufrano, Appeal Staff Writer
Larry Ledbetter, a plant operator at the Steamboat Springs geothermal plant, lets moisture out of a generator valve at the plant Friday.
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Nearly 150 years ago, a man could wrap his calloused hands around a pick and shovel into the mines of Virginia City one day and — if lady luck smiled down upon him — could find himself a very rich man soon after.

Many men rushed to the area in the 1860s to draw fortunes from what natural bounties lie hidden beneath the rocky and dusty earth in the Silver State. Cities grew and families made a living, some made millions.

Today, fortune seekers of a different kind are once again looking to the vast open earth of Nevada to offer up another kind of treasure — renewable energy.

The state is betting on the commodities of the sun, wind and steam to energize the economy, bring in jobs and create new industrial sectors.

A federal tax incentive bill passed late Thursday night by the U.S. Senate will provide tax breaks to spur the development of renewable energy sources and is expected to result in a $3 billion addition to the Northern Nevada economy, experts say.

“If we can get this tax credit in place, it will result in a boom — as in explosion — of geothermal development in Northern Nevada,” said Jon Wellinghoff, energy law attorney with Beckley Singleton in Las Vegas.

U.S. Sen. Harry Reid, D-Nev., was successful in introducing the tax incentives package. The package is part of a larger energy bill passed by the House in April. It now heads into a conference committee in September where details will be worked through.

“We have limitless renewable resources in Nevada, and these tax incentives will make Nevada the proving ground of renewable energy,” Reid said.

The incentives offers a production tax credit of 1.8 cents per kilowatt hour to renewable energy sources, such as geothermal, solar, open-loop biomass, hydropower, animal waste and landfill gas. Companies would have five years to qualify and then receive the tax credit for five years.

With the tax credit, producing energy from the sun, wind or steam could potentially be as cheap as making it from fossil fuels or coal. The result would bring the price of renewable energy down to match the cost of traditional energy, Wellinghoff said.

“It will be cheaper to buy geothermal than to buy fossil,” Wellinghoff said. “It will put us over the hill.”

Nevada is already recognized as a leader in encouraging the use and production of alternative energy. It was one of two states, the other being California, to be recognized for the highest rating by the national Union of Concerned Scientists for its commitment to supporting alternative energy source production and use.

By 2013, state law will require that 15 percent of the power sold by electrical utilities must come from renewable sources in Nevada. The state has one of the most aggressive renewable energy regulations in the country, Wellinghoff said.

But while the making of power from steam derived by solar panels or geothermal sources or by the wind to run turbines, is a cleaner and sometimes safer way to produce energy, the movement is not driven by environmental factors.

The driving force behind the industry in Nevada is money and economic stabilization.

“It will reduce the volatility of the price of our energy and help stabilize costs far into the future,” Wellinghoff said.

Called the Saudi Arabia of geothermal by some, Northern Nevada is rich in geothermal resources with a wealth naturally heated water pockets. Southern Nevada is rich in solar resources and has the transmission lines from Hoover Dam to carry energy. Other resources, like wind, landfill gas, animal waste and any combination of the resources, can be found across the state.

The U.S. Department of the Interior identified and released 10 sites in the state on public land with high potential for geothermal production. Those include sites in Dixie Valley, Soda Lake and Brady.

From his Reno office of 10 employees, President of Advanced Thermal Systems Schuman Moore is aware of the financial benefits of the industry. Moore’s company owned two power plants and planned to build another plant at Steamboat Springs.

The local company recently sold Steamboat Springs operations to a worldwide leading producer and distributor of alternative energy, ORMAT. The deal was expected to close July 31 when ORMAT was to pay a one-time payment of $32.5 million to the small company.

“It was a business decision to sell,” Moore said.

Solargenix Energy is building the first solar plant of its kind for the company near Hoover Dam, expected to finish construction March 2005 and produce 50 megawatts of power that will be sold to Nevada Power and Sierra Pacific power companies. To turn on the lights in 600 homes it takes one megawatt of power.

Vice President of Engineering and Operations Gilbert Cohen said the abundance of transmission lines from the dam are making the prospect easier.

“Southern Nevada was kind of more attractive for a very large scale because of the proximity of transmission lines in Boulder City area and because solar radiation is a little bit better,” Cohen said.

Nine similar solar electric generating systems have been built in California, producing enough electricity to power half a million homes. The system concentrates solar energy on a parabolic collector that reach up to 735 degrees. At that temperature, steam is produced and powers a turbine like a conventional power plant, Cohen said.

With geothermal, water is pumped up through the ground and used to power turbines that generate energy and then pumped back into the ground.

The on-site nature of the energy production makes it more secure and less polluting than production from fossil fuels and coal.

In Nevada, renewable energy production projects currently under construction will eventually produce another 1,132 megawatts of power. Another 2,907 megawatts could be produced by proposed projects under consideration and expected to be built by 2007, according to the Public Utilities Commission of Nevada.