Contending with congress, video zombie noises and a clear chemistry with Ranking Member Paul Gosar, Nextracker CEO Dan Shugar testified before the House Committee on Natural Resources Subcommittee on Energy and Mineral Resources this morning.
Equitable access to BLM lands for renewable energy projects was today’s topic for reasoned study by our elected representatives.
Shugar’s testimony contended that the solar industry’s rapid growth in the U.S. has come despite federal policy, saying, “Those increases were driven almost entirely by technology, cost reduction, and entrepreneurs,” adding, “We have only achieved a fraction of our potential.”
Shugar’s take on project approvals on BLM lands:
- “We need to get the costs down and certain for developers — and projects will happen. Set a simple rate and keep it over the price of the project.”
- “The rules are broken — it takes far too long to get solar projects approved — over three years.”
- “We need to get it done and unleash those lands and provide the benefits — the royalty incomes to the American public.”
- “We have more sun, more land. We need to get the rules right and get on with it.”
According to the CEO, the current policy for siting and approval takes far too long and is often well above market costs. As a result, today less than 10% of solar capacity in the U.S. is on federal lands, despite millions of available acres in areas with excellent solar resources. “This is a very poor result compared to overseas markets.”
Shugar notes that BLM is operating under a Competitive Leasing Rule which undermines the goals for renewable deployment. “Under this rule, the total rents charged for solar projects are now up to 10 times higher than fair market value…Because solar and wind projects do not extract minerals like other energy sources, BLM should instead rent land for these projects at similar costs to grazing.”
In addition to the Competitive Leasing Rule, Shugar listed federal policy changes that can further incentivize the growth of solar:
- Direct pay for the ITC: An equivalent remuneration to the project owner is made in lieu of a tax credit.
- ITC step down extension: The current level of the ITC should be maintained for several years.
- Tariff reduction or removal: The 201 and 301 tariffs should be curtailed or radically reduced.
- Reforming market rules: Policies detrimental to PV development — expansion of MOPR and FERC’s subversion of the PURPA program.
- Strategic transmission investment: Electric transmission between RTOs will lower electricity costs and increase renewable integration.
- Purchase of renewables by the government. The U.S. should set targets for federal agencies and facilities to procure renewable energy and enable agencies to enter into long-term PPAs for these resources.
Here’s the testimony in full.
Shugar pointed to a study by NREL that showed the benefits of adding selective and targeted transmission to the national grid. He encouraged FERC to address strategic transmission.
Ranking Member Paul Gosar, the only Republican representative on the call, said that he “couldn’t agree more with Shugar.” Gosar supported building more interstate and high-voltage transmission lines, saying, “When you can’t build transmission you can’t build generation.”
Gosar said, “This administration has permitted renewable energy on-time and ahead of schedule.” He cited the Gemini, Yellow Pine and Quartzite solar projects. He noted that “geothermal has seen approvals in Nevada” and said it was the Democratic majority slowing the off-shore wind approval process.
Gosar said it was the Obama administration that had pushed for designated areas and had taken 98% of the land off the table. (In 2016, the Obama administration passed a bipartisan ruling to streamline the BLM review process for new renewable projects on public lands.)
Gemini Solar project
Both Shugar and Gosar praised the $1 billion Gemini solar project on BLM land outside of Las Vegas — what will be the largest solar project in the U.S. when completed.
The 690-MW facility was approved by the Trump administration earlier this year.
David Scaysbrook, managing partner of Quinbrook, the project developer, noted that this project took advantage of FAST-41, a framework “designed to improve the timeliness, predictability, and transparency of the Federal environmental review and authorization process,” according to the government website.
Scaysbrook said that this was not a reduced regulatory scope — “it was an initiative of the Trump administration to respond in a limited time range — a 12 month time line. Under the old regime that could have gone six or seven years.”
Other witnesses and voices
Kate Kelly, public lands director at the Center for American Progress Washington, DC said, “The Trump administration is favoring oil and gas over renewable energy,” noting that the administration holds quarterly lease sales to the oil and gas industry and is offering another 500,000 acres this year during a pandemic when there is an oil glut — at minimum bids of $2 per acre.
She compared that to the “Zero acres and zero competitive lease sales” for renewables during this administration. Royalty rate relief was provided for oil and gas while wind and solar received retroactive charges. She said there was a “huge juxtaposition” in the way the two industries were treated.
Congressman Jared Huffman said that the administration adhered to an “Oil of the above energy policy.” He said that Republicans had “said the quiet part out loud” and revealed that the real Republican agenda is “gutting NEPA,” a bedrock environmental law. He said the administration was “giving away our public lands” in an unprecedented rush to develop oil and gas.
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