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Geothermal lobby attacks wind funds

Just as the wind industry had secured state funding for existing projects in California at the end of March, new troubles arose last month from an organisation calling itself the Geothermal Institutional Investors Group. At the first hearing of a bill in the California Legislature, earmarking about $70 million for wind, the group attempted to siphon off more than $16 million of wind's funding.

Just as the wind industry was heaving a collective sigh of relief over securing state funding for existing projects in California, new troubles arose last month in the shape of an organisation calling itself the Geothermal Institutional Investors Group. At the first hearing of a bill in the California Legislature on April 8, earmarking about $70 million for wind, the group made a power play to siphon off more than $16 million of wind's funding.

In doing so it used an esoteric argument claiming that methodology used by the California Energy Commission (CEC) inadvertently granted wind five times the level of production incentives: $0.0062/kWh for wind versus $0.0013/kWh for geothermal. This discrepancy, argued the geothermal grouping, is largely due to the intermittent nature of wind and the base load generation profile of geothermal power plants and other factors.

The group proposed reducing the wind industry's funding by 3% of the total funds, or about $16.5 million. Its members claim to have invested $650 million in geothermal projects representing 400 MW or 45% of California's non-utility geothermal installed capacity.

The attack came after the CEC finalised its recommendation at the end of March on how to spend as much as $540 million to prepare the state's renewable energy industry for competition. The recommendation, including wind's $70 million, was forwarded to the California legislature in the form of SB 90, carried by Senator Byron Sher (D-Palo Alto), a long-time supporter of wind and other renewables.

Nancy Rader of the American Wind Energy Association (AWEA), says the geothermal group's appeal to the legislature came as an act of desperation after it had failed to convince the CEC of its claims. The group wants to get hold of money now earmarked for emerging technologies and for rebates to customers who buy renewable power.

"The CEC was not interested in conducting plant-by-plant needs tests," states Rader, highlighting one of the key flaws in the geothermal investors approach. She notes the Geothermal Energy Association originally requested 5% of total funding available. That is essentially what is promised in the CEC recommendation. AWEA, in contrast, "initially requested 23% of funds to existing wind projects to maintain current production and encourage capital improvementsÉ The CEC ultimately allocated 13% of funds to existing projects and nothing for capital improvements."

According to Jan Smutny-Jones of Independent Energy Producers it appears that all legislation dealing with restructuring issues will be rolled into one massive bill to be hashed out in conference committee in August. He characterises the geothermal attack on wind as a "long shot."

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