Thirsty for clean power, California taps winds in Mexico 

EJIDO JACUMÉ, Mexico – In its quest for more renewable energy, California’s power grid is reaching across the U.S.-Mexico border into Baja California to generate electricity from wind turbines along a blustery ridgeline that has tempted prospectors for decades.

The area’s first utility-scale array of 47 mega-turbines is clustered on an outcropping of land nearly a mile above sea level owned by Ejido Jacumé, an agrarian land cooperative whose ideological roots can be traced to post-revolutionary Mexico in the mid-20th century.

The for-profit venture brings together strange bedfellows to provide power to California’s coastal population from Imperial Beach to San Clemente.

The effort was spearheaded by multinational utility infrastructure giant Sempra Energy, which is headquartered in San Diego, and its Mexican affiliate, IEnova.

Sempra and its politically connected board of diretors are aggressively bidding to expand business in Mexico, which has thrown open energy infrastructure and exploration to greater international competition after decades of relative isolation and state control. The new wind plant in Mexico leverages Sempra’s U.S. operations and holdings, delivering its first trickle of power in March to the company’s California utility customers across new transmission lines and substations on both sides of the border.

Sempra and several other developers want to install hundreds more turbines along the spine of the Baja California peninsula on land controlled by local cooperatives.

A 50-mile stretch could add generating capacity equivalent to a pair of large nuclear reactors. A portion of that power may eventually be sold on the Mexico side of the border to maquiladora assembly plants or nearby cities, though new transmission lines are needed first.

“It’s an important milestone,” said Gary Hardke, president of San Diego-based wind developer Cannon Power Group.

He helped negotiate the original 2006 land lease with members of Ejido Jacumé, a contract then purchased for development by Sempra. Cannon collaborates with Mexico Power Group, another company which has lined up development rights on the ridgeline.

“What I like about it is the idea of resource sharing back and forth across the border,” Hardke said. “There have been very few of these cross-border projects.”

At Ejido Jacumé, a village of dirt roads and modest ranch homes located over a small rise from the steel U.S. border fence, land-cooperative members are nervously awaiting their 4 percent share of gross income from electricity production.

Ejido Jacumé residents raise sheep and laying hens, and run several small stores in town that sell mostly snacks. Household incomes are mostly tied to far-flung jobs and weekday homes in Tecate, Tijuana, Mexicali – or across the border in the United States.

“We don’t know what to expect. A lot of things cross your mind,” said Leodoaldo Garcia Lozano, one of the ejido’s 76 voting members and a former elected leader, or “comisariado.”

“Sempra, like any multinational company, what it cares about least is providing clarity,” he said.

Sempra said electricity production payments could start as soon as June, considering a 30 day lag after sales.

International cast

Sixty miles southeast of San Diego, the Energía Sierra Juárez wind plant overlooks U.S. territory including the hot-springs town of Jacumba and a short stretch of Interstate 8. The project was named after these high plains stretching south into Mexico.

To the east, rocky terrain plummets to the below-sea-level floor of the Imperial Valley, highlighting a swath of green, irrigated fields on the desert horizon.

Among the property’s rocky knolls, contractors hired by Sempra Energy carved access roads and drilled steel-and-concrete anchors to support turbines that stretch 460 feet into the air.

Turbine components converged from around the world. Fiberglass blades came by rail from Brighton, Colo. Tubular steel towers were shipped from China.

The “nacelles,” trailer-sized generator and gearboxes mounted behind the rotor and blades, were assembled in Denmark, home of turbine supplier Vestas.

An international cast of workers labored on the project, as many as 650 people at a time. The site was developed with non-union labor.

Sempra, the developer, brought to the project decades of hardscrabble experience overseeing energy infrastructure projects in Mexico. It was among the first private companies to capitalize on Mexico’s 1995 reforms allowing outside investment in natural gas storage, transmission and distribution.

Higher price

Tom Jennings, senior project manager for Sempra, said wind projects like Energía Sierra Juárez are highly methodical, the antithesis of a “Field of Dreams” ballpark. They require not only a steady breeze but also access to the power grid and a sizable demand for electricity from a population that shouldn’t be too far away.

A seven-mile cross-border transmission line connects the Sierra Juárez turbines in Mexico with the power grid in California.

Electricity will be sold to customers of San Diego Gas & Electric, across San Diego and southern Orange counties, who can expect to pay $820 million or more over the next 20 years.

The power will help SDG&E comply with California’s mandate for 33 percent renewable energy from utilities by 2020. Mexican-made power qualifies under the California Renewable Energy Resources Act of 2011.

The contracted price per megawatt-hour, $106.50, at Sierra Juárez is a bit high by California standards, and twice the price of the cheapest U.S. markets. Sempra will forgo one major subsidy, a U.S. wind production tax credit worth $23 per megawatt-hour.

Sempra’s Jennings said the economics still pencils out because of lower construction costs in Mexico.

Turning point

An Ensenada-based group named Terra Peninsular is challenging environmental approvals for the current project and future phases that would expand its size eightfold. The suit was filed against Mexico’s Environmental Protection Ministry.

Sempra says the lawsuit is baseless and that Mexican regulators conducted a complete, thorough analysis.

Garcia, of Ejido Jacumé, brushed aside ecological concerns: “We don’t think the impact will be that heavy on animals.”

Wind development marks a turning point in the history of the ejido, which is divided into both communal land and personal holdings. Ejido Jacumé was founded at the outset of the 1940s after President Lázaro Cárdenas accelerated the distribution of property to landless farmers and ranchers. Outside Mexico, Cárdenas was known for expropriating foreign-owned industries including oil.

The arid land at Jacumé never sustained large-scale livestock grazing, and Garcia said his own father commuted regularly across the U.S. border to work as a ranch hand in Jacumba.

As the U.S. began to fence off California’s southern boundary, the ejido periodically became a thoroughfare for illegal migrants and smugglers.

When wind developers came knocking, ejido members deliberated for three years before committing in 2006 to at least 12,000 acres of communal property. To evaluate terms of the agreement, an ejido representative visited the southern Mexican state of Oaxaca, on the windy Isthmus of Tehuantepec between the Gulf of Mexico and the Pacific Ocean – a focus of wind development in Mexico over the past 15 years.

They found revenue-sharing agreements that allotted only 1.5 percent to property owners.

That cast the 4 percent offer from a San Diego-based wind developers in a better light, Garcia said.

The ejido’s earnings will be shared equally among the 76 members, with a small percentage devoted to administrative expenses, he said.

Garcia said no one is sure how much money that may equal, and ejido members have met recently with friends in the wind industry as they prepare to double-check Sempra’s math.