Cheaper Land On Agenda For US Admin For Solar and Wind Projects

Highlights :

  • Land availability, at the right cost is THE issue for solar developers.
  • The US move could also be attempts to tamp down on any price increases caused by restrictions on Chinese imports.
Cheaper Land On Agenda For US Admin For Solar and Wind Projects

Cheaper access to land for solar and wind projects has become a key tool for the US administration of President Joe Biden to drive growth in solar and wind capacity. With renewable energy a key pillar of the ‘green new deal’ to reduce emissions and decarbonise the US economy, the issues assumes significance at a time the US has actually taken steps that potentially increase costs for developers.

Be it restrictions on suppliers with links to China’s Xinjiang region, or a greater push for sourcing domestically, both step that will potentially increase costs, much like India, the US administration faces a choice between energy ‘security’ by way of dependence on China for key equipment, and higher costs by doing it all domestically. With domestic production set to go up after almost a decade next year, the administration will find it tough to go back on the restrictions anytime soon also.

The new plans being reported talk of making federal lands cheaper to access for solar and wind power developers On August 31, the Interior Department’s Bureau of Land Management (BLM) announced the start of a process to revise regulations related to renewable energy permitting and rights-of-way on public lands starting with four public listening sessions in September and a separate consultation with Native American tribes.

Rent lease schedules and fees for wind and solar rights-of-way, application processing times and environmental justice considerations will form the focus of these sessions.

With each MW of solar demanding upto 4 acres or more, land has always been the biggest constraint for solar energy’s growth in dense population clusters worldwide. While that is not really an issue in the US, what is an issue is the high fees solar developers end up paying to landowners as rent or lease for the typical 25 year old life of a PV plant.

Also, at prices ranging from $650 to almost $1000, these rentals are way higher than what the federal government charges the oil and gas industry for instance, where rents can run as low as  $1.50 or $2 per year per acre before being replaced by a 12.5% production royalty once petroleum starts to flow. Keep in mind that even solar developers pay a fee lined to output in some cases. Of course, the Biden administration is also pushing hard on offshore wind energy to sidestep any land related issues.

The move by the federal government comes at an opportune time, as sectors like Commercial and Industrial (C&I) or residential, which have been a key part of the solar push peak out at some stage. That means giant utility scale plants of the kind being developed in China and India, with capacities upwards of 800 MW going up to 2 GW or more even are becoming the new norm. Getting such vast adjacent acreage for a solar plant, even in the US, is not possible without federal government involvement.

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