For the Inflation Reduction Act to work, the US needs permitting reform
The Inflation Reduction Act (IRA) represents the largest investment in domestic clean energy in our country’s history and a major opportunity to make America a leader in the global energy transition. This historic law puts the clean energy industry on a path to produce enough clean power to fuel every home in America, employ nearly 1 million Americans by 2030, enhance grid reliability, strengthen the nation’s energy security, and keep the nation within striking distance of climate goals. We are ready to rapidly scale clean energy installation across the country.
And that means we need to start building.
Easier said than done.
The current permitting process for clean energy projects is a risk to this once-in-a-generation opportunity. Analysis shows that to achieve the country’s goal of 100 percent clean energy in the electric sector by 2035, we must expand annual installations of wind and solar energy by two to four times and increase transmission infrastructure by 60 percent over the next 15 years. Today, the average timeline for a clean energy project to obtain necessary environmental reviews is 4.5 years, with transmission reviews often taking years longer.
This unprecedented energy transition is simply not possible with our current permitting process. Under the National Environmental Policy Act (NEPA), federal agencies are required to prepare an environmental impact statement that reviews any projects associated with federal lands, federal funding, or federal permits and approvals. As renewable projects become more prevalent in the coming years, the frequency of federal involvement is only expected to increase. To meet our anticipated climate goals, Congress must consider reasonable reforms for clean energy projects that preserve the substance of bedrock environmental laws while expediting the permitting process under them.
Based on modeling by the American Clean Power Association, the IRA will deliver 525 to 550 gigawatts of utility-scale clean power by 2030 — meaning there will be enough clean energy on the grid to power every home in America. This projected growth represents between $550 to $600 billion in capital investment and will create 500,000 new clean energy jobs. The IRA will more than triple the size of the clean energy industry while doubling its workforce by 2030 — all while keeping us within striking distance of the country’s 2030 emissions reduction goals.
Without permitting reform, such as the recently released proposal to speed up the process for energy projects, the United States runs the risk of falling 100 gigawatts short of this expected clean energy impact. Project delays from the current permitting system would result in 550 million metric tons of additional carbon emissions this decade — equivalent to the annual emissions of 88 coal-fired power plants — as clean energy projects would not come online timely enough to displace those emissions. This also translates to fewer jobs: Absent environmentally responsible permitting reform, $100 billion less is expected to be invested in clean energy projects this decade, reducing projected job creation by 100,000 jobs.
What does common-sense permitting reform look like? As a first step, reforms should establish time frames for the completion of environmental reviews. Successfully deploying wind, solar, energy storage and transmission projects require a predictable, timely, and cost-effective framework, and codified time limits can help set boundaries that support the timely completion of environmental reviews.
Permitting should also account for project delays, which often occur due to coordination and communication challenges between lead and participating agencies. To address this, Congress should ensure a lead agency can spearhead environmental reviews, greater interagency coordination, and concurrent agency reviews.
Further, reforms should maximize the use of programmatic approaches to permitting and environmental reviews for onshore clean energy infrastructure projects. This will support federal agencies knowing when or how to optimally use programmatic reviews to allow projects to effectively tier from them to expedite the time it takes to do an environmental review.
The clean energy industry stands ready to deliver clean, affordable, and reliable power to all Americans. We must put politics aside and come together to pass common-sense and overdue permitting reforms. As Congress considers potential reforms to the permitting system, we can’t let this unprecedented opportunity pass us by. It’s time to finish the job and follow through on the promise of this historic legislation. Simply put: Without building these clean energy projects, we can’t reach the climate goals and targets we need to achieve.
Heather Zichal is CEO of the American Clean Power Association, an industry group including companies across the clean power sector. She also served as energy and climate change advisor to President Obama.
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