kaiser solar array

Photo Credit: Kaiser Permanente


There’s another Gold Rush in California – only now renewable energy is the precious commodity, and big corporations are the prospectors.

Last week Apple struck solar and Google mined wind. Now Kaiser Permanente has discovered both. The giant health-care company announced a threefer on Wednesday:

  • The purchase of 43 megawatts of wind power from a NextEra Energy Resources wind farm repowering project on the outskirts of the Bay Area, mirroring Google’s deal.
  • The purchase of 110 MW of solar from a 486-MW NextEra project being built in the desert near the Arizona state line.
  • And the purchase of “as much as” 70 MW of solar production from NRG Energy from arrays that will in one form or another go on Kaiser hospitals and campuses around the state.

What’s driving these big buys? Kaiser said climate change – and how it relates to health – is the major factor. Here’s the rationale that Kathy Gerwig, Kaiser’s environmental stewardship officer offered in a statement:

“The health impacts of a changing climate can be felt today in the form of increasing rates of asthma and other respiratory ailments, spread of infectious diseases, heat stress and injuries from severe weather events. By addressing climate change for the future, we are improving the health of communities today.”

But that’s not the whole story.

“Pursuing renewable energy opportunities is not only the right thing to do for our communities, it makes good business sense,” said Ramé Hemstreet, Kaiser Permanente’s chief energy officer.

That’s particularly true with solar, and especially the case in California, where the solar resource is of course excellent and the average price of electricity for commercial customers in November 2014 was 15.45 cents/kWh, according to the U.S. Energy Information Administration.

And that’s the price right now. If history is any guide, it will rise steadily while Kaiser takes advantage of unspecified locked-in prices (we’re guessing somewhere between 10 and 12 cents per kilowatt-hour) over the 20 years that its renewable energy contracts will run.

Federal incentives are playing no small role here; the Production Tax Credit has been wind’s best friend, and solar leans heavily on an Investment Tax Credit. Kaiser noted that the onsite NRG arrays will be “up and producing power by Dec. 31, 2016,” which just happens to be the last day that a 30 percent ITC for solar will be available, at least per current law.

Frank Wolak, an economics professor at Stanford and director of the university’s Program on Energy and Sustainable Development, agreed that the ITC is a big factor here. “It’s very simple,” Wolak said in explaining the flurry of deals. “All of the renewable subsidies that are expiring are unlikely to be renewed.”

The Blythe project’s relationship with the ITC might be a bit more complicated – this is a project that has already taken a long and winding road to get where it is.

The project site, described by the expert desert renewables journalist Chris Clarke as consisting of “Sonoran Desert creosote scrub, ephemeral wash woodland, and sand dune habitat,” was approved way back in 2010 for a 1,000 MW, parabolic-trough solar thermal plant. But then the price of PV plunged, rendering that technology suddenly obsolete.

NextEra picked up the project and moved to convert it to PV, which made sense economically but Native Americans and environmentalists were sorry to hear the project hadn’t gone away for good.

The Colorado River Indian Tribes has tried to stop the project, charging in a lawsuit that the development would destroy cultural resources. Environmentalists cited adverse impacts on desert tortoises and various birds, among other species, although the downsizing of the plant and mitigation measures seemed to take some of the edge off their objections.

NextEra’s modified plan won approval from the California Energy Commission early last year, and the feds gave their OK in August. At the time, NextEra told Desert Sun reporter Sammy Roth that it would build the plant in four segments over four years. Kaiser’s 110-MW buy is the first sale of any of the power. No doubt NextEra is eager to get that portion done in time to qualify for the ITC, which falls to 10 percent in 2017 – and just this January the CEC had authorized “limited construction activities” to begin.