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San Diego Daily Transcript

July 9, 2009

Panel: Bi-national grid will benefit renewable energy use

By MONICA UNHOLD, The Daily Transcript

An integrated power grid allowing the and to manage energy needs collaboratively is the surest way to increase renewable energy use and ensure a reliable power supply for Southern California , panelists said Tuesday during an Urban Land Institute program.

Since President Barrack Obama took office, the nation has experienced a “fundamental shift” toward renewable energy and bi-national approach to managing energy demand, said Jeremy Martin, director of the Institute of the Americas Energy Program, who moderated the discussion "Renewable Energy: A Bi-national Effort."

“We are trying to tie our two states together, at least by electrical grids,” said David Munoz Andrade, general director of the Baja California Energy Commission.

The partnership is a natural one. Many renewable energy companies have established operations in the Southern California and Northern Mexico in recent years, taking advantage of the opportunities both countries have to offer.

For example, Kyocera draws from naturally occurring silicon resources in the United States, assembles its panels in Mexico and distributes the completed product in California where the climate is ideally suited to generate solar power, said Cecilia Aguillon, director of business development and government relations for Kyocera.

Though officials of both and the see a collaborative energy policy as beneficial, there are many hurdles to be overcome, Martin said.

“Cross-border projects present several layers of regulatory challenges,” Martin said.

In land ownership is an issue companies often face when developing renewable energy infrastructure.

Much of the rural land in the nation is owned by communal trusts, and purchasing the land or acquiring or permits to build requires approval by every member, said Alberto Abreu, director of project development for Sempra Generation.

Ideally, the and could tap into power sources in both nations allowing each to sell surplus supplies or receive emergency back up from the other.

Cross-border transmission lines would be required to establish such an arrangement, however land issues snarl the approval process for such proposals, Abreu said.

“Sempra has yet to get a renewable energy project (in ) that was not tangled in land ownership issues,” Abreu said.

If energy policies were reformed, could become a major producer of renewable energy.

Regions of the are ideally suited for both solar and wind generation, said Frederico Ruanova, a partner in the international law firm Baker & McKenzie.

“We definitely have the sun and we have the wind but what we don’t have is a constitution that allows us to generate and distribute energy,” Ruanova said.

The Mexican constitution states the government has exclusive rights to distribute power.

A bi-national energy policy would require California utilities work with the Mexican government.

“As long as these constitutional constraints remain we will not see renewable power in ,” Ruanova said.

policies also need reformed to foster growth of the renewable energy industry, Aguillon said. "Buy American" restrictions, requiring only U.S.-made materials be used in federally-funded construction projects harm international companies.

In addition to construction projects, Buy American restrictions govern federal stimulus funds for energy retrofits.

However there are few, if any, solar companies that base their entire manufacturing operations in the .

Such restrictions must be relaxed to allow all of North America to reap the jobs and revenues resulting from a competitive solar market, Aguillon said.

In California , solar incentive programs need to made simpler and clearer, Aguillon said.

Many homebuilders are choosing to build “solar-ready” homes and having them retrofitted by a solar installer before selling new homes, because the rebate program for energy retrofits is far simpler than the program for new construction.

“It’s frankly unintelligible,” Aguillon said of the California Solar Initiative, a program established in 1998 and managed by the California Public Utilities Commission.