Green Wombat

photo: ririchen06

The corporate headquarters of a state-regulated utility would seem to be an unlikely place for green tech entrepreneurs to strike gold. But as global warming worries grow and regulators require utilities to obtain more electricity from renewable sources, the industry is turning to startups to meet those mandates. And so the scene this week at PG&E (PCG) in San Francisco, where California�s largest utility held a bidder�s conference for companies wanting to make offers to provide between 80 and 800 megawatts of clean, green energy. Like the other investor-owned California utilities � Southern California Edison (EIX) and San Diego Gas & Electric (SRE) – PG&E must get 20 percent of its electricity from renewable sources by 2010. The quote rises to 30 percent by 2030. What�s more, California regulators – laying the groundwork for the state�s coming cap on greenhouse gas emissions – have barred the utilities from signing long-term contracts for the purchase of �dirty power� from out-of-state coal-fired plants. That means another 20 percent of California�s electricity will have to be replaced. No surprise there�s a land rush on to lock up solar, wind, biomass and geothermal resources.

�We�re open to any and all offers,� a PG&E exec told about 60 people from a host of renewable energy companies who gathered in the utility�s auditorium on Tuesday to hear the opportunities � and not insignificant hurdles � to winning a contract. Want to build a solar power plant in Arizona and ship the electrons to Northern California? Not a problem. PG&E will also consider signing long-term power purchase agreements with the option to buy your wind farm, solar power station or biomass plant. It will also accept proposals for �turn-key ownership� � you build it, the utility buys it. Got a good piece of land for a renewable energy project? PG&E might purchase the development rights.

This is PG&E fourth annual request for offers � last year it signed a 500-megawatt solar power plant deal with Bright Source Energy � and it will finalize contracts by the end of 2007 after narrowing applicants to a short list this summer. The upside for green tech startups: a guaranteed price for the electricity produced over the term of a 10-to-20 year contract. The downside: the time and cost of securing approval for a wind farm or solar power plant from an alphabet soup of regulatory agencies � the CPUC (California Public Utilities Commission, the CEC (California Energy Commission) and FERC (Federal Energy Regulatory Commission)- to name a but a few.  Not to mention the penalties you�ll incur from the utility if your technology doesn�t deliver the power as promised.

Still, there appears to be no shortage of interest from green power companies in doing business with your local monolithic utility. Green Wombat recognized a few faces in the San Francisco audience from a renewable energy bidder�s conference utility Arizona Public Service (PNW) held in Phoenix last month. APS was looking to contract out only about 10 megawatts of green energy but it attracted a standing-room-only crowd.