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The Valleys of Southern Idaho Earn Their Name as a Major Player in Alternative Fuel

30 Apr, 2008

By: Jennifer Alten

The Magic and Wood River Valleys of Southern Idaho are best known for their world-class skiing, gorgeous scenery and friendly locals. But that’s not all – alternative power is becoming big business in this part of the world. Alternative power experts are turning everything from grain and wind to water and steam from the earth into energy. Even cow manure is getting into the act.

“From an alternative fuel standpoint, Southern Idaho is rich in resources,” said Dan Olmstead, community relations representative at Idaho Power.

Hydroelectric

Located in south central Idaho, The Valleys is an eight-county area bisected by the Snake River and anchored by Twin Falls. With abundant natural resources, alternative power has deep roots in the area. Water power, largely fueled by hydroelectric power plants along the Snake River, has long been an Idaho mainstay. However, as Olmstead pointed out, though this type of hydroelectric power is renewable, it’s typically not considered alternative. But, there are alternative sources for water power.

Today, smaller hydroelectric power plants are being located on irrigation canals in the area. One example is the Low Line Midway Hydroelectric Project in Twin Falls County, generating 2.5-megawatt hydroelectric energy. Idaho Power, literally the local powerhouse, has been purchasing the energy generated from these projects.

Wind

Wind power is one of The Valleys' leading sources of alternative fuel. The Fossil Gulch wind park, located outside of Hagerman, Idaho, about 35 miles northwest of Twin Falls, is a 10.5 megawatts power facility.

Boasting of an optimal average wind speed of 13 miles per hour, The Valleys happens to sit in an area of natural wind flow. Plus, wind investors find open land – frequently farmland – and close proximity to existing electrical infrastructure, in place from the hydroelectric power facilities.

“I see good growth for wind power in southern Idaho, said Jeff Duff, vice president at Airstreams LLC, a company that manages wind parks throughout the country, including the one at Fossil Gulch. “It’s a fascinating time for wind. Last year, the industry grew by 45 percent. The year before, it grew by 40 percent. According to projections, it’s not going to stop. With wind power, we need places to put the turbines and Idaho is attractive because there’s open access.”

Part of the draw of wind power is the ability to export it to other states for revenue.

Over the next two years, a project called China Mountain is planning to add more than 200 wind turbines on federal, state and private lands west of Twin Falls. Nevada Power is in talks with the developer, Renewable Energy Systems America Developments, to buy 200 megawatts from the project. Any excess energy will be sold on the open market.

Twin Falls-based consultant Stephen Hartgen said that Twin Falls County could see an ongoing 3 percent revenue from the project’s gross income because of recently changed tax laws, which provide money to counties that host wind farms as long as the turbines continue to produce electricity.

Ethanol

Another key player in the alternative fuel sector is ethanol. Pacific Ethanol recently completed a 50 million gallon per year ethanol facility in Burley. It is the first fuel-grade ethanol facility in southern Idaho, producing ethanol that reduces carbon dioxide emissions by 40 percent compared to conventional gasoline.

“Ethanol is far more than just a renewable fuel,” said John Crockett of the Idaho Energy Division. “It cuts down on our need for imported oil. It helps air quality. But more importantly, it has enormous potential for creating new markets for Idaho crops and adding jobs, income and tax revenues to our state’s economy.”

The plant, employing about 40, is located on 177 acres with direct access to both the Union Pacific Railroad and Interstate 84. It operates in synergy with The Valleys dairy and beef industry. The area’s more than 300,000 dairy cattle and 100,000 feedlot cattle will consume all wet distiller’s grain from this facility.

“We would like to thank the city of Burley for being so helpful to us in the development of this project. We look forward to bringing new jobs and economic growth to the local community.” said Pacific Ethanol Chief Executive Officer Neal Koehler.

Geothermal

Harnessing steam power from the earth, geothermal is another major player in the area’s alternative fuel market.

“The advantages of geothermal energy are that it’s a proven technology, it’s renewable and it’s a baseload energy, meaning that it is online 24 hours a day, 7 days a week, 365 days a year,” said Doug Glaspey, COO and director of U.S. Geothermal, the developer of the Raft River geothermal project. “Geothermal is directly competitive, price wise, with coal and natural gas but has no emissions.”

The Raft River geothermal project is located in The Valleys at the site of a former U.S. Department of Energy geothermal installation. The first development, called Unit One, became operational in October 2007 and currently provides 9.5-to-10 net megawatts of power with a capacity of 13 MW. U.S. Geothermal just signed a second contract for Unit Two with Eugene Water and Electric Board of Eugene, Oregon. The site is attractive because of the proven 300 degree Fahrenheit hot water resource that has been developed and tested, and because of the significant infrastructure facilities that are currently in place.

“Raft River as a resource could have up to 100 MW of potential,” said Glaspey.

Methane

The region’s 400,000 dairy and feedlot cattle factor into the alternative fuel sector in other ways, as well. Olmstead said, “Naturally, there is an interest in methane digesters. We’re seeing a number of dairies that are coming together to buy or build a digester.”

This technology is able to take the waste from cows and turn it into natural gas. The anaerobic digester processes cow manure into methane gas, which is pumped into an engine where it is converted into electricity for the grid.

Idaho Falls-based Intrepid Technology and Resources, Inc., is expanding its methane digester at Whitesides Dairy, northeast of Rupert in the The Valleys. The company is the first to produce pipeline-quality methane gas from cow manure. ITR’s President Jacob Dustin said that any dairy with 2,000 or more cows could produce enough gas to make such a project viable.

Government incentives and support

To make the investment in alternative fuels even more enticing, the state and federal government have created lucrative incentives that have definitely helped this sector of The Valleys' economy.

Mike Crapo, U.S. senator from Idaho, said, “As a member of the Senate Renewables and Energy Efficiency Caucus, I have an opportunity to increase awareness of the energy options that are available to us.”

One option is the national Production Tax Credit (PTC), which sprung out of the passage of the Energy Policy Act of 2005. The PTC is an incentive of 1.5¢ per kilowatt hour for electricity produced from renewable sources during the first 10 years of a new facility's operation. On January 1, 2008, the PTC was extended to include geothermal operations.

Another is HB110, which was passed by the Idaho legislature and signed by the Governor in 2005. HB110 provides sales and use tax rebates for the sale or use of machinery and equipment used in alternative methods of generating electricity.

Also, the Idaho Energy Division administers a low-interest loan program to finance the development of energy conservation or energy generation projects that utilize renewable energy resources, including geothermal systems.

Alternative fuel sources: A smart investment

As costs from conventional power sources continue to rise, the interest and demand for alternative fuel will continue to grow. And The Valleys' deep roots in this market sector will prove even more lucrative overtime.

Jan Rogers, executive director of Southern Idaho Economic Development Organization (SIEDO), sums it up by saying, “We continue to see steady growth in alternative fuels. It’s definitely an exciting time for this sector and even more exciting that The Valleys of Southern Idaho are part of it.”
 

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