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Rural Oregon Bets on Renewable Energy Industry

by Matthew Preusch
The Oregonian, January 30, 2005

BEND -- As the floor of the Pacific Ocean slides under North America, thrusting the Cascade Mountains skyward, the resulting superheated water and steam produce enough energy to provide power to more than 2 million people, most of the state.

But neither Oregon nor Washington produces a single kilowatt of electricity from the geothermal roiling.

East of the Cascades, the energy created by burning small trees culled from crowded conifer thickets or encroaching juniper stands could power an additional 280,000 homes, but only about 4 percent of that makes it to the grid.

Thousands more homes could run on power harnessed from water coursing through the irrigation ditches that bisect the high desert to feed crops every spring and summer.

All that power potential between The Dalles and Klamath Falls could make the U.S. 97 corridor something of an energy colony, exporting megawatts to population centers in the Willamette Valley and beyond.

At least that's what local advocates hope as they push to establish a renewable energy industry, touting it as a chance to carry the region out of its post-timber economy doldrums.

"We have a renewable energy resource base that is unparalleled by any other similar geographic area in the country," said Cynthia Hayes, executive director of 3EStrategies, a Bend consulting firm.

Oregon's mountains, prairies, forests and rivers make the state prime territory, she said, to provide wind, solar, geothermal, wood pulp and small-scale hydro power -- called "renewable" because it doesn't use finite fossil fuels such as natural gas or coal.

Hayes helped form a private-public group called the Business Alliance for Sustainable Energy that launched an effort last week to promote the 65 Central Oregon companies working with renewable power or energy efficiency in a nine-county area east of the Cascades between the Columbia River and California.

The companies already employ more than 200 people and generate more than $20 million in sales annually, Hayes said. The group hopes to increase those sales figures at least 30-fold and multiply the number of jobs by 20 over the next 10 years.

Without tax credits or other public assistance, most renewable energy resources are more expensive to develop than traditional resources, but rising fuel prices and global warming trends are making people take a second look.

Portland's city government, for example, plans to buy 100 percent of the energy it uses in its buildings from renewable sources, mostly wind, by this summer. Pacific Power, which serves about 1.5 million people in Oregon and four other states, is looking for ways to add 1,400 megawatts of renewable power to the grid over the next seven years. One megawatt powers about 750 homes.

The Oregon Department of Energy estimates new investment in renewable energy in the state could top out at $300 million by 2006, creating 3,700 jobs statewide.

"I think Oregon is very well situated," said energy consultant Ed Sheets, former director of the Washington State Energy Office and a former director on the Northwest Power Planning Council. "It is an important industry, and it's likely to be a growing industry."

Several companies along the U.S. 97 corridor are already jockeying for a piece of that pie.

At the Warm Springs Forest Products Industries lumber mill, front loaders and backhoes are clearing earth for the foundation of a new 15-megawatt biomass power plant.

Biomass technology uses organic material, usually byproducts such as wood pulp or cow dung, to fire boilers that turn turbines, generating electricity.

The tribal company has used a biomass burner fueled by wood chips left from its sawmills to run part of its operations since the 1970s, said power manager Darrel Kelly.

But now the company wants to become a power exporter, sending electricity back onto the grid for sale. Warm Springs officials estimate they'd need about 160,000 tons of bone-dry wood chips to keep a plant running, and half of that would have to come from off the reservation.

They hope plans by federal land managers to clear dense forests of small-diameter trees will create a steady supply of such wood, Kelly said. "We're kind of in the right place at the right time in terms of green power," he said.

If a timber company morphing into a power company sounds strange, how about an irrigation district?

Every spring and summer, 450 gallons of water per minute, roughly one-third of the middle Deschutes River's natural flow, cascades down a 25-foot manmade waterfall in a canal owned by the Central Oregon Irrigation District.

The waterfall could generate enough electricity to power all the homes in Sisters based on its volume and drop.

"It's here, happening already, so why not harness it?" said district manager Steve Johnson. The district is trying to get the canal piped and install a one-megawatt "microhydro" generation facility that would run during irrigation season.

Across Central Oregon, such canal projects could generate enough electricity in the next 10 years for 15,000 people, according to the business alliance.

But wind remains the largest source of renewable energy in Central Oregon and the one of choice for large utilities.

The Bonneville Power Administration recently announced it will buy and market the entire output of a new 50-megawatt wind farm near Condon, south of the Columbia River Gorge.

Currently, about 500 megawatts of wind generation are online in Oregon and Washington, with 2,400 megawatts in various stages of development, according to the Renewable Northwest Project, a nonprofit group that promotes renewable power development.

Local governments and industry officials hope all these projects will provide an economic boost to communities still smarting from the loss of timber jobs. In Deschutes County, for example, jobs in the industry fell from a high of 3,400 in 1989 to 1,800 in 2003.

"We're in this region that's still trying to get through this transition away from traditional resource-based jobs. And this is an incredible opportunity to develop high-wage, meaningful jobs," said Scott Aycock, program administrator for the Central Oregon Intergovernmental Council.

Even then, there's still getting all that power from turbines to toasters. Power companies acknowledge they must make new investments to carry the electricity from remote areas over the Cascades to where it's needed.

"A lot of the obstacle to siting and building new generation is transmission," said Deston Nokes, a spokesman for Pacific Power.

For instance, an addition to a wind farm near Klondike in Sherman County would require about $30 million in improvements to the grid, including a 12-mile transmission line, a BPA official said.

"We have some bottlenecks right now between the eastern part of the state and the western part of the state," said Carel Dewinkel, senior policy analyst for the Oregon Department of Energy.

Another drawback is the start-up cost, said Jan Schaeffer, a spokeswoman for the Energy Trust of Oregon, which distributes grants for renewable energy projects in the state. As a result, large utilities shy away from buying it unless they have incentives.

At a 2003 energy summit in Central Oregon, many participants said the state should require that a certain amount of power sold here come from renewable sources. But Schaeffer said the idea doesn't have much political momentum, partly because Oregon has a legacy of cheap electricity, thanks to dams on the Columbia and Snake rivers, which provide about half of the state's power.

But that means Oregon could miss an opportunity to expand its energy sources, said Steve Munson, chief executive officer of Vulcan Power. The company has tried for years to build a geothermal plant on the flanks of the Newberry volcano southeast of Bend, but has encountered environmental concerns and doesn't have a buyer for the electricity.

Ten percent of the power consumed in California comes from renewable sources, and the state plans to bring that figure to 20 percent in 12 years.

"Because of the lack of a market, our projects are going to be selling power to California, and not a kilowatt is going to go to the Northwest," Munson said.

Rural Oregon Bets on Renewable Energy Industry
The Oregonian, January 30, 2005

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