US lowers federal hurdles in latest bid to accelerate wind, solar
Proposed end to compulsory competitive leasing could stimulate lagging wind development and boost solar but thresholds to prevent auctions may be too high, experts told Reuters Events.
Last month, the U.S. Interior Department said it plans to accept non-competitive wind and solar leasing applications in priority areas in a fresh attempt to accelerate deployment.
The department's Bureau of Land Management (BLM) will also reduce land fees for developers. In 2022, the BLM reduced fees by 50% and the new measures will mean fees are 80% lower than in 2021, it said.
The Biden administration aims to permit 25 GW of renewable energy on federal lands by 2025 and has thus far approved 8.2 GW of projects, mostly solar. The BLM is currently processing 74 utility-scale onshore clean energy projects for public lands in the western U.S., including wind, solar and geothermal projects, for a total capacity of 37 GW, the Interior Department said last month.
The proposed rule change means some projects may avoid a full competitive auction that can increase project timelines and costs.
Some parcels of land have not attracted enough demand from developers to hold a competitive auction, due to issues such as a lack of local transmission capacity, Tom Vinson, VP pf Policy and Regulatory Affairs at the American Clean Power Association, told Reuters Events.
The BLM is yet to approve any meaningful wind capacity and plans to streamline competitive processes to attract more developers. Wind projects have faced a two-step competitive process which has deterred some developers and this will be reduced to one under the proposals.
The new proposals will require developers to pass multiple milestones before they can avoid a competitive auction process, warns Laura Zagar, a partner at law firm Perkins Coie.
The BLM will require a complete application, a plan of development, a cost recovery agreement and a completed Environmental Assessment or Draft Environmental Impact Statement, Zagar noted.
“That’s a lot of effort and money for a developer to put in to a project before there is a determination that no competitive process will occur," she said.
The 245 million acres of U.S. public land managed by the BLM represent around 10% of the country's entire land area but host just 1% of national installed wind capacity and 6% of solar, according to data in 2022. Much of the land lies in 12 western states and the Rockies.
U.S. installed wind capacity (end of 2021)
(Click image to enlarge)
Source: Department of Energy's 'Land-based Land-Based Wind Market Report,' August 2022.
The priority federal development areas currently cover less than 500,000 acres but this could potentially be expanded going forward.
The areas are designated under the 2012 Solar Programmatic Environmental Impact Statement (PEIS), the 2016 Desert Renewable Energy Conservation Plan (DRECP) and the Restoration Design Energy Project (RDEP).
Another 19 million acres have been designated as variance lands which undergo more extensive environmental review and bring greater development risks, Tom Vinson, VP, Policy and Regulatory Affairs at the American Clean Power (ACP) association, told Reuters Events.
The BLM is currently updating its PEIS, to expand the areas in which solar developers are offered a combined environmental impact statement while also coordinating the areas with planned transmission lines and advances in solar technology.
The plan currently focuses on California, Nevada, Utah, Colorado, Arizona, New Mexico and will be expanded to areas in Washington, Oregon, Idaho, Montana and Wyoming.
This could result in more priority development areas. Any changes to the location of priority development areas would occur through a land use plan amendment which would undergo a public consultation, BLM spokesperson Brian Hires told Reuters Events.
Wind developers have not been designated specific large-scale priority areas but the removal of the two-step competitive process could attract more developers. Until now, developers have had to gather wind speeds and other data to compete for preliminary assessment rights and compete again for the right to propose a site development plan.
“Companies are not willing to spend money on that first process if there is no guarantee that they will not lose out to a competitor for the right to apply to develop the site," Vinson said.
Bureau under pressure
The bipartisan debt deal approved by Congress in June included reforms to the National Environmental Policy Act (NEPA) that will require federal environmental assessments to be conducted within one year and impact statements within two years.
Currently, the federal environmental review and permitting process can be "far more onerous, time-intensive and costly than the process for projects on private lands," Zagar said.
Federal agencies must conform to the NEPA and comply with additional environmental and historical preservation rules. State authorities may fast-track approvals on private lands if the projects are beneficial to local communities, Zagar noted.
Demand for renewable energy has soared on the back of the Biden administration's Inflation Reduction Act, increasing the pressure on BLM resources.
On top of ongoing approvals, the BLM is conducting a preliminary review of 150 applications for wind and solar development, as well as 51 applications for wind and solar energy testing, the Interior Department said last month.
Developers continue to report delays in permitting, despite an expansion of BLM resources over the last year that BLM says has already led to "increased efficiencies” in environmental reviews and project approvals.
The cause of the delays can be difficult to identify, making it hard to rectify on future projects, Devon Muto, Senior Director of Solar Development at EDF Renewables (EDFR) told Reuters Events earlier this year.
The BLM needs to set more time limits on individual processing phases, beyond the 12-month time limit set for environmental impact statements, Muto said.
The BLM must continue to hire personnel to process environmental reviews and permitting for wind and solar, said Zagar.
“The BLM experienced substantial personnel losses during the Trump administration, resulting in the loss of centuries of collective experience and knowledge,” she said.
Reporting by Neil Ford
Editing by Robin Sayles