SOUTHERN CALIFORNIA ENERGY SUMMIT

Tesla probably won’t build its nextGigafactory by the Salton Sea, but thatshouldn’t stop energy storage and bat-tery technology from reshaping the re-gion’s energy and transportation land-scapes.

Energy storage and electric vehicleswere hot topics at Friday’s SouthernCalifornia Energy Summit in PalmSprings, where Tesla co-founder J.B.Straubel told The Desert Sun that hiscompany is “keeping a close watch” onefforts to extract lithium from geother-mal brine by the Salton Sea.

Lithium is a key ingredient in the bat-

teries that power the electric vehiclesproduced by Tesla and other automak-ers. If large-scale lithium extraction bythe Salton Sea proves commercially via-ble, the area’s massive mineral re-sources could reshape global lithiummarkets and supply battery manufactur-ers around the world.

But Tesla chose to build its first bat-

tery factory in Nevada, which has no in-come taxes and a relatively low mini-mum wage. Straubel said Friday thatwhere the company builds its next Giga-factory will be determined mostly byeconomic factors — not by whetherthere’s plentiful lithium being producedby the Salton Sea.

The location of lithium production“doesn’t have a very big impact on where

Batteries, storage could shape futureTesla co-founder says automaker has its eyes on Salton Sea’s potentialBy Sammy RothThe Desert Sun

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FRIDAY’S PREPFOOTBALL RESULTS

The shiny shovels are getting dustedoff as Palm Springs prepares for one ofits most anticipated groundbreaking ofrecent times.

City officials will join others fromWessman Development and KimptonHotel & Restaurants on Thursday for theofficial groundbreaking of a new 155-room, six-story Kimpton brand hotel indowntown.

“I think this is absolutely huge. Newproduct is always wonderful. It’s new,and people will flock to it,” said MayorSteve Pougnet on Friday afternoon.

“And hotel deals are not easy deals tobe done in this country. So from thestandpoint of how important it is for thecity, it’s hugely important,” he added.

The hotel is part of the larger redevel-opment of downtown where the formerDesert Fashion Plaza once stood. Con-struction for the Kimpton hotel is set tolast for about the next 16 months. And

Downtownready formilestonePalm Springs to breakground on Kimpton lotBy Skip Descant The Desert Sun

WESSMAN DEVELOPMENT

The latest sketch of Block A in the MuseumMarket Plaza.

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As traffic reached 50 mph, it creat-ed a breeze that Jason Roman couldfeel as he jogged along East Palm Can-yon Drive in Palm Springs.

It’s a scenario that plays out when-ever he uses the stretch just west ofGene Autry Trail, where more than29,000 vehicles pass on a daily basis.

Roman goes just as fast when he’sdriving, but he’ll stop to think about theposted speed limit whenever he enterspedestrian mode.

“That’s when you become an ob-server and see how fast cars go,” saidRoman, 42, of Palm Springs. “It’s prob-ably safe, but you kind of wonder.”

Speed limits across the CoachellaValley are a concern among many resi-dents.

At least 51 pedestrians have beenkilled since 2008, according to the Cali-fornia Office of Traffic Safety and lo-cal law enforcement. Speeding was be-hind some. Drugs, alcohol and poor vis-ibility were factors in others.

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Traffic on Highway 111 in south Palm Springs travels at about 50 mph near Gene Autry Trail on Oct. 7.

Deaths spur speed worriesSHARING VALLEY ROADS

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we do production,” Straubel, Tesla’schief technology officer, told The DesertSun.

Straubel’s assessment is likely to de-flate local enthusiasm over the possibil-ity of a Tesla arrival, a much buzzed-about topic while the electric automakermulled where to build its first Gigafacto-ry. That battery factory, which will bebuilt near Reno, will employ about 6,500people and could generate $100 billion ineconomic benefits, Nevada officialshave estimated.

Locally, Tesla has been eying SimbolMaterials, a Pleasanton-based companythat has been testing an innovative lithi-um-extraction process by the Salton Sea.Tracy Sizemore, Simbol’s vice presidentof business development, said he wasn’tsurprised to hear that Tesla probablywon’t build a battery factor in the Impe-rial Valley.

Lithium, Sizemore said, is “not a driv-er for battery costs.”

“Their significant costs are electric-ity, land, taxes, labor,” he said. “They’remore supply-constrained than location-constrained.”

Simbol plans to break ground in Janu-ary on a facility that will produce 15,000metric tons of lithium per year. Whilebattery manufacturers might not flockto the region once that plant is finished,Sizemore acknowledged, he expects thatSimbol will supply lithium for manyelectric automakers and battery manu-facturers.

Whether Tesla will be one of thosecompanies, however, is an open question.

“Lithium is a resource that here in thevalley is in somewhat plentiful supply.There are some companies working onmining that,” Straubel said during hispresentation at the energy summit.“There are also a lot of other companiesaround the world trying to find new waysto extract resources cheaper.”

Tesla aside, state officials and energyexperts predicted at the summit that en-ergy storage technology — includinglithium-ion batteries — will radicallychange the way we power our homes andvehicles in the coming years. The tech-nology is still too expensive to be de-ployed on a wide scale, but it’s consid-ered critical to integrating more renew-able power into the state’s energy mix.

Solar plants, for instance, generatethe most electricity during the middle ofthe day, but peak energy use occurs inthe evening. That’s why most solarfarms must be supplemented by naturalgas-fired power plants, which producehalf as much carbon as coal-fired plants— but still far more than solar farms.

If electricity providers could storelarge quantities of solar power duringthe day and send it to consumers in theevening, it would be far easier for Cali-fornia to move toward 100 percent re-newable energy — which, Straubel said,he would like to make possible.

“We’re quite close to having the eco-nomics work to be able to do storage atthis level, using the same type of batter-ies that are going into vehicles,” he said.

Angelina Galiteva — a member of theboard of governors of the California In-

dependent System Operator, which man-ages the state’s electricity grid — said alack of storage has already forced stateofficials to turn excess solar power awayfrom the grid.

“What’s our biggest problem? Low-cost renewables — an abundance ofthem we have to curtail,” Galiteva said.“Five years ago, that would have beengood news. Now we’re afraid of it.”

State regulators have already takenaction to boost energy storage. Califor-nia Public Utilities Commission presi-dent Michael Peevey said the commis-sion mandated last year that major util-ities buy at least 1.3 gigawatts of energystorage by 2020, including 200 mega-watts from private homes and business-es.

Peevey also cited efforts by rooftopsolar companies like SolarCity to investin battery storage technology. If thosecompanies can help energy consumersproduce and store their own electricity,they will essentially be taking their cus-tomers off the grid.

SolarCity’s batteries, Peevey added,will probably be produced at Tesla’sGigafactory in Nevada. Tesla chief exec-utive Elon Musk is also chairman ofSolarCity.

Peevey and Galiteva both joined apanel about the future of the state’srenewables portfolio standard, whichcurrently mandates that utilities buy 33percent of their power from renewablesources by 2020. The panelists generallyagreed that California will need to in-crease that mandate to reduce its green-house gas emissions 80 percent below1990 levels by 2050, as mandated by ex-ecutive order.

They cautioned, however, that policy-makers will need to do more than raisethe renewable energy mandate to meetthat goal.

About 43 percent of the state’s carbonemissions, Galiteva noted, come fromthe transportation sector. Stuart Hemp-hill, Southern California Edison’s seniorvice president for power supply and op-erational services, said electric vehicleshave a key role to play in reducing thestate’s emissions.

“The biggest opportunity we have toreduce greenhouse gases today is in thetransportation sector, and everybodywho’s looked at the math understandsthat,” Hemphill said.

Straubel believes the transportationindustry is approaching a “tipping point”where electric cars can compete withtraditional gas-powered vehicles.

“The fundamental technology mak-ing that possible is continuing to im-prove,” he said. “Gasoline is not gettingmuch better. It doesn’t really change.”

However, California officials chooseto promote emissions reductions, otherstates — and even countries — are likelyto follow suit. If California were a coun-try, Galiteva noted, it would have the sev-enth-largest economy in the world.

“We can’t have the attitude, ‘We needto wait for India or China to take actionbefore we do,’” she said. “We only standto win. We have the institutions, we haveSilicon Valley, we have the technologies.If there’s a global market for the exportof our technologies, why not?”

Energy Reporter Sammy Roth can bereached at Sammy.Roth@desertsun.com,

(760) 778-4622 and @Sammy_Roth.

SummitContinued from A1

Officials on Friday sparred over thefuture of geothermal development bythe Salton Sea, dredging up a controver-sial bill that failed in the state Legisla-ture earlier this year.

Speaking at the Southern CaliforniaEnergy Summit in Palm Springs, Imperi-al Irrigation District general managerKevin Kelley criticized state officials onhis panel for not supporting the bill,which would have mandated 500 mega-watts of new geothermal development inCalifornia.

“None of your agencies were a hell ofa lot of help,” Kelley said to a panel thatincluded top officials from the Califor-nia Public Utilities Commission and theCalifornia Independent System Opera-tor.

“I hope I’m not still here next year, re-minding everybody that the Salton Sea isbegging for dignity.”

Local leaders for years have toutedgeothermal development as critical tofunding the restoration of the Salton Sea,which has been receding as agriculturalrunoff declines.

But while the sea is home to one of theworld’s best geothermal reservoirs, de-veloping that energy is expensive. Andonly one new plant has opened since2000.

Geothermal advocates had hoped thatstate Senate Bill 1139 — sponsored bySen. Ben Hueso, a San Diego Democratwho represents parts of the CoachellaValley — would jump start geothermalactivity by the sea.

But after facing opposition from ma-jor utilities and the public utilities com-mission, the bill stalled in the Assembly.

Michael Peevey, the controversialoutgoing president of the California Pub-lic Utilities Commission, said his agencyopposed Hueso’s bill because it wouldhave increased electricity rates.

California’s renewable energy portfo-lio standard requires utilities to buy33 percent of their energy from renew-able sources by 2020, but solar and windpower are significantly cheaper thangeothermal.

The utilities commission, Peevey not-

ed, has instructed utilities to sign con-tracts for renewable energy using a“least-cost, best-fit” standard, which pri-oritizes minimizing the cost to electric-ity consumers. That was the standardmandated by the Legislature when itlaunched the renewable energy portfoliostandard.

“We saw earmarking 500 megawattsof geothermal energy, with a lack oftransmission capacity, as being contraryto that policy direction that we have andthat we’ve been following for sometime,” Peevey said.

Kelley countered that by criticizingthe utilities commission for not consider-ing the benefits of geothermal in fight-ing climate change.

Because they operate 24 hours perday, Kelley said geothermal plants cansupplement intermittent wind and solarpower — a role that is now played largelyby greenhouse gas-emitting natural gasplants.

“This least-cost, best-fit methodologyhas resulted in a procurement strategythat has left geothermal out,” Kelley saidFriday.

“And we’re told that it’s because geo-thermal is uneconomic, and it’s not theright time, but I don’t think it’s the [re-newable energy portfolio standard] thatought to drive public policy. I think itought to be climate.”

Kelley also blasted opponents of Hue-so bill’s opponents for suggesting it un-fairly favors geothermal, saying the re-newables portfolio standard has been “aseries of carve-outs.”

Pressed by Kelley on the urgency ofgenerating funds to restore the SaltonSea, Peevey said the public utilities com-mission was willing to work with Huesoto develop a strategy for expanding geo-thermal production by the sea.

But Hueso “didn’t pursue that,” Pee-vey noted.

“I don’t want to see a stalemate, butthere are a whole host of challenges,”Peevey said. “You don’t get 500 mega-watts by just mandating it in the legisla-ture.”

Energy Reporter Sammy Roth can bereached at Sammy.Roth@desertsun.com,

(760) 778-4222 and @Sammy_Roth.

Salton Sea is still ‘beggingfor dignity,’ says IID official By Sammy RothThe Desert Sun