Opinion
Energy Transition

Energy projects tend to move slowly in the US — here's what to do about it

Energy projects in the US can be stymied by permitting and administrative barriers.

Energy projects in the US can be stymied by permitting and administrative barriers. Image: REUTERS/David Swanson

Doug Arent
Executive Director, Strategic Public-Private Partnerships, National Renewable Energy Laboratory - NREL
Irene Varoli
Project Fellow, Clean Power, Grids and Electrification, World Economic Forum
Kristen Panerali
Head, Clean Power and Electrification, World Economic Forum
Cy McGeady
Associate Fellow, Energy, Security and Climate, Center for Strategic and International Studies (CSIS)
Joseph Majkut
Director of Energy Security and Climate Change, Center for Strategic and International Studies (CSIS)
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Energy Transition?
The Big Picture
Explore and monitor how United States is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

United States

This article is part of: Centre for Energy and Materials
  • Modernizing and expanding transmission is critical for the future energy system.
  • To maintain energy transition momentum, the US must accelerate permitting and address administrative barriers.
  • Critical action is needed from both policymakers and industry.

A dramatic increase in renewable energy project approval and deployment rates is needed across the US — but the country has long struggled to push through projects quickly.

The Biden administration has instituted the ambitious decarbonization target of 100% carbon-free electricity by 2035. Recent NREL work modeling pathways to the 2035 target found that overall generation capacity would need to triple from 2020 levels — including approximately 2 terawatts of combined wind and solar capacity. This would require the US to quadruple current annual deployment levels for each technology.

Total transmission capacity will also have to grow significantly, reaching 1.3–2.9 times current capacity in 2035.

Have you read?

Why progress is so slow on energy projects

Process applications are often delayed due to a lack of clear mandates and coordination among permitting agencies, unclear timelines and guidelines or insufficient staffing of skilled workforce. At the end of 2021 in the US, 79% of the wind pipeline was stuck in the permitting process versus the construction phase. Other major regions face similar issues with EU at 81%, China at 74% and India at 64%. There are also over 2,000 GW of projects in the US seeking connection to the grid, of which more than 95% is clean power technology. Similarly, interconnection waiting time is rising from less than two years for projects built in 2000-2007 to nearly four years for those built in 2018-2022. Finally, connection costs are also rising as reported by BNEF. These are worrisome indicators for progress on clean energy deployment goals.

Land conflict and opposition from communities are an emerging source of delays for clean power and grid projects. Local ordinances restricting renewable energy deployment are growing. For example, 1,853 local wind ordinances in effect during 2022 compared to 286 in 2018. NREL models local rules having substantial national impacts. Solar capacity potential would decrease from 147 TW in the most permissive local ordinance scenario to 91 TW if communities enacted the strictest setback distances. Worse declines occur for wind energy, with potential capacity declining from 14 TW to 2 TW between the permissive and restrictive scenarios.

In June 2023, the World Economic Forum and the Center for Strategic and International Studies (CSIS) in collaboration with the National Energy Renewable Laboratory (NREL) convened nearly 50 senior executives from business, government and civil society to discuss these challenges. At the time, debt ceiling negotiations had concluded with minor permitting reform provisions and a congressional handshake to take up the issue in the future. Since then, the Biden Administration has proposed to expand the class of projects that can receive some exclusion from review under the National Environmental Review Act. Yet no major congressional policy progress has been made. Key lessons from that session remain relevant and pressing.

Prioritizing electricity transmission

The future energy system will strongly rely on an electricity backbone — not only to integrate more renewables and storage in the generation mix, but also to electrify end uses — including heating, transport and industrial processes. In the US, high-voltage regional or inter-regional transmission lines provide the best value to ratepayers in terms of grid services per dollar spent. However, transmission is heavily encumbered by the politics of cost allocation. The IRA and IIJA has granted the Department of Energy (DOE) new funding authorities which can effectively buy down the cost of large scale high-voltage transmission projects, creating a tool that can help resolve cost allocation battles by decreasing ratepayer burden. In October 2023, DOE announced three transmission projects to receive funding under these authorities, setting the stage for demonstration of its usefulness. However, the scale of funds currently appropriated is still small relative to total investment required. Ensuring successful early case-studies will be key for increased appropriations from Congress in the future.

The linear nature of transmission infrastructure projects — which cross numerous jurisdictions and permitting regimes — can rapidly doom project feasibility. The 17-year permitting process for the SunZia transmission project between New Mexico and Arizona shows how difficult permitting and siting can be. The National Interest Electric Transmission Corridor (NIETC) designation authority held by DOE is a promising path to a faster permitting and siting regime. However, to attract private developers and capital at scale, DOE and FERC should develop a process which is rapidly replicable for both agency staff and private developers. Crucially, the process must respect state’s primary siting authority, and deter or limit litigation, which remains a major challenge for project developers and agencies. A proposed rule from DOE indicates progress on inter-agency coordination. However, whether this translates into expanded use of the NIETC (National Interest Electric Transmission Corridor) authority remains uncertain, requiring more collaboration between DOE and transmission developers.

The NIETC (National Interest Electric Transmission Corridor) represents an opportunity, but little progress has yet been made.
The NIETC (National Interest Electric Transmission Corridor) represents an opportunity, but little progress has yet been made. Image: United States Department of Energy

Integrating digital technologies and ensuring engagement

A vast number of projects will need to be permitted in the decades ahead. To handle this permitting load state capacity must expand, requiring existing processes to be streamlined. In the US a mandate for innovation extends through all the federal agencies, into state-level offices and regional power system regulators such as ISOs and RTOs. New digital technologies present a huge opportunity, but successful demonstration is critical.

A key priority is the establishment of communities of practice with participation from both agencies and the private sector, to share experiences and ideas on user-centred design. For example, WindEurope, AWS and Accenture in collaboration with the World Economic Forum are testing in Denmark a digital permitting tool to increase information management, transparency and collaboration in the permitting process. Sharing results to both high level policy makers and implementation-level staff in other nations can allow replication of this model around the world.

Automation and standardization of the administrative processes through digital tools would also free up agency staff, enabling them to focus on tasks more dependent on the human touch, such as community engagement. A vast build out of energy infrastructure hinges on securing a robust social license to operate. As stated by one participant at the June roundtable “the energy transition will move at the speed of public trust.”

Leadership from industry is critical for the development of new inclusive business models which can cohere an accelerated deployment of energy infrastructure and increased delivery of tangible positive impacts on communities and natural ecosystems. Here, innovative collaboration between industry and civil society is necessary to develop these solutions, while policy makers can play a major role in creating a regulatory ecosystem which incentives this innovation.

Concrete action is possible — and needed

The urgency of the challenge is clear, and policymakers can play a key role in addressing it. The E-NEPA provisions of the Fiscal Responsibility Act (FRA) of June 2023, are an opportunity to introduce digital technologies into the federal permitting process. The NIETC designation also holds great promise but remains unused. Proactive collaboration between industry and agency staff to develop a process that can deliver projects should be encouraged. Meanwhile, congressional progress on permitting reform, especially with provisions which limit litigation risk are fundamental to scale use of federal NIETC authorities.

There is an opportunity for policymakers at key agencies, especially DOE and FERC, as well as Congress to work together with other stakeholder to find pathways to deliver better community engagement with real economic, social and environmental benefits. Meanwhile, business should adapt strategies to prioritize meaningful engagement and benefit sharing with the communities, such as local upskilling and job creation. The new World Economic Forum’s white paper on better community engagement practices outlines these strategies.

Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Accelerating an Equitable Transition: A Data-Driven Approach

Espen Mehlum

July 17, 2024

About Us

Events

Media

Partners & Members

  • Sign in
  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum