August 2012

Renewable Energy Development in Indian Country

In April, the US Department of Energy’s Tribal Energy Program awarded $6.5 million for 19 renewable energy projects. About two-thirds of the funding went to tribes in the West, mostly Arizona and New Mexico. This year’s grants came as the Obama administration has been seeking to empower tribal nations in the US and strengthen their economies by speeding up the leasing of land for clean energy projects.


It has been projected that Indian lands have the potential to supply more than four times the electricity needs of the nation from solar systems and another 14 percent by harnessing wind resources.


A portion of the DOE seed money will go to To’hajiilee, a sparsely populated impoverished Dine community west of Albuquerque, which has no means of economic development. To’hajiilee does have a major transmission line running through it, and is now planning to erect an expanse of solar panels that will power more than 10,000 distant homes.


After an environmental assessment approved by federal officials, To’hajiilee Economic Development, Inc. signed an agreement with SunPower Corporation to develop the $124 million project, called “Shandiin Solar.” Shandiin is the Dine name for sunlight.


Tribes, since they don’t pay federal taxes, may not be eligible for federal subsidies for renewable energy projects, but they are good candidates for alternative financing structures such as the new market tax credit for “economically disadvantaged” communities. To’Hajiilee is working with an investment bank to develop a financing model and has formed a limited liability company. First American Financial Advisors, Inc. is one of the groups consulting on the 200-acre project, which is expected to break ground in the fall and take no more than nine months to complete. The 30-megawatt array will likely become the largest utility-scale photovoltaic power plant on tribal land in the US.


In northwestern NM, the Navajo Nation is using its seed grant to develop a 4,000-megawatt solar project. The tribe is also exploring the potential for several major wind projects, and may become a partner in the Tres Amigas electrical grid, which is being promoted as a way to expand the transmission infrastructure to provide renewable energy projects access to multiple power markets nationwide. A tribal spokesman has said that the Navajo’s investment in Tres Amigas may increase their incentive to further develop green energy projects. In association with Lawrence Livermore Laboratory, the Navajos are also looking into carbon capture and sequestration and “clean coal” technology.


Jemez Pueblo in NM’s north-central mountains received over $300,000 to complete a 4-megawatt solar project on 30 acres and acquire a power purchase agreement. With DOE support, the tribe has also been drilling and doing seismic monitoring to assess potential geothermal resources. The grant funding to Zia Pueblo will allow that tribe to analyze the integrated development of solar, geothermal and wind resources. A couple of tribes in the state are reportedly also developing algae biofuel projects.


In most cases, the tribes are seeking to become equity owners, partners and producers, rather than just landlords collecting royalty fees, as has been the case with outside oil, gas, coal and uranium companies. Tribes also want to control the pace of the development and have a say on the environmental impacts.




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