March 01, 2012

Keys to Wind Energy Development in Baja California

Brian Orion

A number of forces are driving renewable energy developers to look south of the border for the next big opportunity in wind energy. Rising along the U.S.-Mexican border between the cities of Tijuana and Mexicali, the mountainous region known as La Rumorosa is thought to have such plentiful wind resources that developing only a fraction of the technical potential could nearly triple the amount of wind power installed in California today. The region’s location directly adjacent to the California border gives project developers an opportunity to sell this plentiful resource into the substantial renewable energy market in California, where California utilities are striving to satisfy 33 percent of their retail electricity demand with renewable energy by the year 2020. And despite efforts by regulators to speed the process along, building utility-scale renewable energy projects in California has proven to be a multiyear undertaking, often leading to costly delays in obtaining necessary approvals.

These converging forces have set the stage for a significant new cross-border market in renewable energy. Counsel advising project developers should be prepared to provide strategic advice on a number of unique legal and regulatory challenges facing such a venture, including securing land rights for the facility, transporting the power, ensuring it satisfies California’s requirements for out-of-state renewable energy, and complying with Mexico’s statutory environmental review process.

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