Biden administration aims to cut costs for solar and wind projects on public lands
The Biden administration plans to make federal land cheaper to access for solar and wind power developers after the clean energy industry argued in a lobbying campaign this year that tariffs and fees rental prices are too high to attract investment and could torpedo the president’s climate change agenda, write Nicolas Married and Valerie Volcovici.
Washington’s decision to review federal land policy for renewable energy projects is part of a larger effort by President Joe Biden’s government to combat global warming by boosting the development of clean energy and discouraging drilling and coal mining.
“We recognize that the world has changed since we last looked at this issue and that updates need to be made,” Janea Scott, senior advisor to the US Department of the Interior’s deputy secretary on government affairs, told Reuters. land and minerals.
She said the administration was considering several reforms to facilitate the development of federal lands for solar and wind companies, but did not give details.
The push for easier access to vast federal lands also underscores the renewable energy industry’s voracious need for new acreage: Biden aims to decarbonise the electricity sector by 2035, a goal that would require a larger area than the Netherlands for the solar industry alone, according to research firm Rystad Energy.
It is a rental rate and royalty system for federal solar and wind leases designed to keep rates in line with the value of nearby farmland.
Under this policy, implemented by President Barack Obama’s administration in 2016, some large solar projects pay $ 971 per acre per year in rent, as well as over $ 2,000 per year per megawatt of electrical capacity.
For a large-scale project covering 3,000 acres and producing 250 megawatts of electricity, that’s a tab of about $ 3.5 million each year.
Rents for wind projects are generally lower, but the capacity charge is higher at $ 3,800, based on a federal fee schedule.
The renewable energy industry argues that the fees imposed by the Home Office are not synchronized with rents on private land, which can be less than $ 100 an acre, and do not come with a charge for l electricity produced.
They are also higher than federal rents for oil and gas drilling leases, which are $ 1.50 or $ 2 per year per acre before being replaced by a 12.5% production royalty. once the oil begins to flow.
“Until these overly burdensome costs are resolved, our country will likely fail to realize its potential to deploy local clean energy projects on our public lands – and the jobs and economic development that come with it,” said Gene Grace, General Counsel. for the American Clean Power Association clean energy business group.
The renewable energy industry has historically relied on private land to implement large projects. But large tracts of uninterrupted private land are becoming scarce, making federal land one of the best options for future expansion.
To date, the Home Office has authorized less than 10 GW of solar and wind power on its more than 245 million acres of federal land, a third of what the two industries were expected to install nationwide. this year alone, according to the Energy Information Administration. .
The solar industry began pushing the issue in April, when the Large Scale Solar Association, a coalition of some of the country’s leading solar developers – including NextEra Energy, Southern Company, and EDF Renewables – filed a petition with the Bureau. of Land Management of the Interior calling for lower rents on large-scale projects in the scorching deserts of the country.
A spokesperson for the group said the industry initially focused on California because it is home to some of the most promising solar areas and because the land around major urban areas like Los Angeles has inflated valuations for entire counties, even on desert areas not suitable for agriculture.
In June, the Bureau lowered rents in three counties in California. But solar representatives called the measure insufficient, arguing that the discounts were too low and the megawatt capacity charge remained in place.
Lawyers for the solar companies and BLM have discussed the matter on phone calls since, and further discussions are scheduled for September, according to Peter Weiner, the lawyer representing the solar group.
“We know that the new members of BLM have a lot to do,” Weiner said. “We really appreciate their consideration.”