Downtown-based water infrastructure company Cadiz Inc. has a new grand plan to monetize its Mojave Desert holdings, after nearly three decades of trying to obtain permission to transport water from beneath those land holdings to consumers throughout Southern California.
On June 20, Cadiz signed a memorandum of understanding with London-based renewable energy project developer Hoku Energy Ltd. to develop a clean energy campus on the Cadiz Ranch. The main focus would be on solar generation and hydrogen production using renewable energy sources, but the campus could also include low-carbon power generation and large-scale battery storage facilities. The agreement also makes allowances for the development of a data center.
The memorandum provides Hoku Energy with a three-year exclusive option to develop the project on more than 10,000 acres at Cadiz Ranch, which sits atop the aquifer that is east of Twentynine Palms.
This is the second agreement for the development of renewable energy on Cadiz property. Last October, Cadiz signed an agreement with Madrid-based RIC Energy Group for the development of a major “green hydrogen” facility. Green hydrogen is the production of hydrogen fuel using renewable power sources – in this case, solar power.
‘Capstone of long-term land use’
The question going forward is whether these agreements will translate into actual completed projects. This is not the first time Cadiz has tried to get third parties to build renewable energy projects on its land. Back in 2010, Cadiz announced in a filing with the Securities and Exchange Commission that it was in discussions with solar power developers. But none of those discussions ever bore fruit. For one thing, since the Cadiz property is far from any major transmission lines, new lines would have to be built, and that can be a drawn-out process.
Nonetheless, Cadiz Chief Executive Susan Kennedy was bullish on the current plan, which could bring the company as much as $7 million a year in lease and water sale revenue. “This agreement with Hoku Energy is the capstone of our long-term land use strategy,” she said. “Hoku Energy’s vision aligns with our mission to support sustainable, scaled development of critical energy and water infrastructure in California and the Southwest.”
