Permitting reform is needed to unlock the full potential of new clean energy investments

By J.C. Sandberg, American Clean Power Association

A $2.3 billion battery plant in Arizona. A $60 million wind tower manufacturing plant in New Mexico. A $600 million solar module manufacturing plant in Ohio.

These projects—which will create more than a thousand jobs—represent just a few of the latest investments stemming from legislation signed into law last Congress. On the line are hundreds of billions of dollars of tax incentives for clean energy that will spread jobs and economic development across virtually every corner of the United States.

Simply put, these opportunities to significantly build our clean energy resources provide certainty to the clean energy sector—certainty that has long been enjoyed by other energy sectors, but that has long eluded clean energy developers. For decades, wind, solar, and other renewables have had to contend with on-again, off-again tax incentives that have hampered long-term investment.

The Inflation Reduction Act (IRA), signed into law last August, has finally leveled the playing field. Its importance for the clean energy industry—and our nation as a whole—cannot be overstated. With the certainty provided by this law, the U.S. finally has the financial framework in place to incentivize widespread deployment of clean energy technology. This truly represents a paradigm-shifting opportunity.

The numbers are telling. Since it became law, the IRA has unleashed more than $150 billion in capital investment, while spawning the creation of 46 new manufacturing facilities and close to 18,000 jobs. The IRA is also helping to expand 94 gigawatts of announced new clean energy capacity. 

While the IRA represents a historic foundation for clean energy development, the law won’t singlehandedly bring about the clean energy revolution. Congress must take additional steps to truly unleash its potential by enacting common-sense reforms to the federal permitting process.

It simply takes too long to site and build energy infrastructure in this country, and the culprit is an outdated and overly cumbersome permitting process. Today, the average timeline for a project to obtain necessary National Environmental Policy Act (NEPA) reviews is 4.5 years; for transmission projects, the average timeline is even longer, at 6.5 years. Litigation can extend the process to a decade or more, hampering investment in clean energy projects and associated infrastructure and depriving Americans of the energy, economic, and environmental benefits of using our own abundant domestic clean energy resources.

Failure to act on permitting reform will have enormous consequences, putting an estimated 100 gigawatts (GW) of clean energy projects at risk of significant delays. These delays translate to $100 billion of lost investment, 150,000 lost American jobs, and the release of 550 million metric tons of additional carbon emissions this decade—an amount equal to the yearly emissions of 120 million cars. Not fixing the permitting system also delays U.S. energy independence from foreign sources.

That’s why the American Clean Power Association is supporting reasonable reforms to the permitting process. These changes will maintain the strong protections embedded in our nation’s environmental laws while providing a more predictable, timely, and cost-effective permitting framework to unlock the clean energy Americans want and deserve.

The changes include establishing presumptive time limits on environmental reviews to provide certainty for project developers; expanding the use of categorical exclusions to speed projects that do not have major environmental impacts; enhancing the authorities of lead agencies to spearhead environmental reviews; increasing the use of programmatic approaches to permitting; and requiring coordinated NEPA reviews and other agency consultation processes.

With these reforms, we can take necessary steps in accelerating the deployment of clean energy across the nation, and build clean infrastructure that delivers affordable, reliable power to Americans.

J.C. Sandberg is the Chief Advocacy Officer of  the American Clean Power Association (ACP, www.cleanpower.org)

Q2 2023