In order to keep pace with the federal government’s ambitious goal of permitting the production of at least twenty-five (25) gigawatts of renewable energy through projects placed on public land by 2025, the Department of the Interior (the “DOI”) recently announced several policy changes to ensure developing renewable projects on public land is attractive and affordable for third-party developers and investors.
The first of these policy changes announced by the DOI on June 2, 2022, is that the rents and fees associated with utilizing public land for renewable energy projects, will drastically decrease by an average of over fifty percent (50%). Currently, any developer of a renewable project located on public lands is subject to both an acreage rent and capacity fee (based upon the amount of energy produced by a project), calculated by the Bureau of Land Management (the “BLM”), an agency within the DOI, in accordance with tables proscribed by the Code of Federal Regulations. However, various supporters of renewable energy have argued the existing rents and fees are far too high to attract serious investment in renewable energy projects on public lands. Recognizing the validity of those renewable supporters’ arguments, and following public outreach by the BLM, the BLM confirmed it will utilize the authority granted to it under The Energy Act of 2020 to substantially reduce public land rental costs and standardize capacity fees for renewable projects located on public land in order to incentivize investment in renewable projects located on public lands.
The second policy change announced by the DOI is the designation of five (5) new Renewable Energy Coordination Offices, to be located within existing offices of the BLM across the western portion of the country, as well as the BLM headquarters in Washington, D.C. (the “RECO Offices”). Due to the rapid growth of renewable energy projects in the United States, the BLM has struggled to keep up with the flood of applications relating to new or existing renewable energy projects. The RECO Offices will be expected to boost the internal capacity of the BLM to process environmental reviews and renewable energy project applications, creating a more efficient system for project developers, which in turn should help the pace at which renewable energy projects are put into service across the country. The RECO Offices are also expected to foster closer engagement between the various agencies of the DOI on topics relating to renewable energy.
The policy changes announced by the DOI are positive steps towards ensuring the continued growth of renewable energy resources in the United States, as well as meeting the federal government’s stated goals relating to renewable energy production by 2025. Further, the announced changes should provide a boost to any renewable energy project developer considering public lands for the geographic placement of their future projects.