Opinion
Energy Transition

Why regulatory hurdles need to be overcome for clean energy expansion

side view of offshore wind turbines in a story about clean energy and regulatory change

Regulatory hurdles should be removed to accelerate the US clean energy transition. Image: Unsplash/Jesse De Meulenaere

Rich Powell
Chief Executive Officer, ClearPath Inc.
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Energy Transition

  • While the Cape Wind clean energy project was first mooted two decades ago, only a relative handful of turbines dot the US East Coast at present.
  • To embrace the green energy transition, the US government must enable the private sector to spearhead development of clean energy solutions.
  • Regulatory hurdles must be reduced to foster a conducive environment for clean energy expansion that has never been more pressing.

Two decades ago, as a student, I sat in a dimly-lit auditorium, spellbound by the vision of Cape Wind — a pioneering project poised to transform the landscape of clean energy generation.

Fast forward to the present day, and the stark reality paints a less optimistic picture: only a dozen turbines currently dot the US East Coast, a far cry from the ambitious plans envisioned. Despite enjoying widespread public support, the journey towards achieving significant clean energy milestones has been marred by a labyrinth of regulatory hurdles.

In the contemporary discourse surrounding the much-needed expansion of clean energy sources, there is a resounding call to action to achieve success: the US government must relinquish its inhibitory role and allow the private sector to spearhead the development of clean energy solutions.

Efficacy of free markets key to tackling climate change

As the world grapples with the pressing challenges posed by climate change, the urgency of this directive cannot be overstated.

It has become increasingly apparent that a departure from traditional environmental paradigms is necessary – one that embraces the dynamism of free markets and the unparalleled capacity of innovation to drive progress.

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At the heart of the argument for allowing the private sector to take centre stage in clean energy projects lies a recognition of the unmatched efficacy of free markets in driving innovation and catalysing progress.

Indeed, empirical evidence attests to the remarkable capacity of private enterprise to spearhead transformative change in the realm of clean energy.

Consider the rapid deployment of clean capital by free markets, which can nearly always outpace government intervention. This dynamism underscores the imperative of unshackling the private sector from regulatory constraints and allowing it to unleash its full potential to drive the transition towards sustainable energy systems.

Why the regulatory landscape is a double-edged sword

Initially conceived as bulwarks protecting the environment, regulations have paradoxically evolved into formidable barriers obstructing the realization of clean energy projects.

At the forefront of this regulatory conundrum in the US stands the National Environmental Policy Act (NEPA), enacted with noble intentions in the 1970s to ensure that developers meticulously assess the environmental ramifications of their projects. However, the unintended consequence of NEPA's provisions has been the empowerment of affluent stakeholders to employ litigation as a potent tool to stymie progress.

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Consequently, what was once conceived as a safeguard against environmental degradation has inadvertently become a weapon against building clean energy projects.

Moreover, the proliferation of state and local barriers, epitomized by moratoriums on nuclear energy, a halt to planned pipelines carrying captured carbon dioxide, and impeded efforts to mine minerals, further exacerbates the regulatory quagmire, impeding the swift realization of clean energy objectives.

Local resistance to clean energy initiatives

Beyond NEPA, regional gridlock and local resistance further compound the permitting conundrum, perpetuating a cycle of stagnation and resistance to clean energy initiatives.

Take, for instance, the protracted permitting process for connecting new clean energy plants to the power grid in the Midwest, where the average timeline stretches to almost four years.

Moreover, at the state and local levels, elected officials often erect barriers to specific forms of clean energy, hindering progress toward a sustainable future.

Consider the example of US states maintaining moratoriums on new nuclear energy despite its potential to provide 24/7 clean, reliable energy. The Biden administration’s Department of Energy estimates that an additional 200 gigawatts of firm capacity will be needed to meet net-zero emissions by 2050 and acknowledged that deploying advanced reactors could help fill that void. Yet since the 1970s, 16 states have instituted bans on nuclear energy in one form or another, and moratoriums remain in place in 12 states.

This isn’t just a problem in the US. In Germany, there has been opposition to offshore wind while they also begin to phase out nuclear energy for ideological rather than technical reasons.

Wind and other clean energy projects have also hit opposition in Norway. Australia won’t allow nuclear energy, but last year, they said they wouldn’t ban new coal. The list goes on around the world.

Despite this widespread resistance, there remains a glimmer of hope. As an eternal optimist, I firmly believe that balanced environmental regulation is key to overcoming these hurdles.

Take the US Clean Water Act, for instance, which was a testament to the transformative power of effective legislation in addressing environmental crises when the heavily polluted Cuyahoga River in Ohio quite literally caught fire.

However, tackling the permitting emergency necessitates environmentalists' collective effort to rally behind new and retrofitted clean energy ventures, irrespective of past preferences.

Furthermore, it's imperative for developers to recognize the importance of aesthetics in their projects. Advanced nuclear developers have demonstrated this by incorporating elements of nature into their designs, fostering community engagement and acceptance. This attention to detail may seem trivial but can significantly enhance public perception and support.

In essence, embracing a multifaceted approach encompassing regulatory reform, community engagement, and political advocacy can pave the way for a sustainable energy future.

Charting a course towards clean energy

Drawing inspiration from international precedents such as Spain's streamlined regulatory processes, the US must enact bold policy reforms to navigate the regulatory maze stifling clean energy expansion.

Automatic permitting mechanisms such as pre-clearance for low-impact projects coupled with expedited review processes for high-impact ventures represent pivotal steps toward catalyzing progress.

Leveraging lessons from past crises, such as the 2005 energy crisis, where the US made it easier to obtain permits for oil and gas production on public lands, we should do the same with clean energy. If you are for a transition, why not give developers the same opportunities to advance renewables like geothermal on public lands?

Common projects with minimal environmental impact should be automatically greenlit and reviewed after the fact to help speed up the process for overwhelmingly positive clean energy infrastructure.

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Things like solar sites or nuclear plants on a retired coal plant site should be a quick approval that can be monitored later to ensure they remain in compliance with existing environmental laws.

For those that do need permits up front, we should set a one-year deadline for how long the reviews can take, three-month limits to file any lawsuits and six months to adjudicate the suits.

Too many clean energy projects experience delays of years, sometimes decades, largely because of obstructive litigation practices. We must strike the right balance – allowing legitimate judicial review while halting the never-ending cycle.

This will allow the US private sector to rapidly deploy the hundreds of billions in capital to the energy projects our country desperately needs. Collectively, these changes could shave five or even 10 years from project timelines.

Embracing a culture of ‘yes’ to clean energy initiatives

The imperative for reducing regulatory hurdles and fostering a conducive environment for clean energy expansion has never been more pressing.

By adopting a holistic approach that focuses on regulatory reform, reducing government bureaucracy, and moving away from abusive litigation practices, we can surmount the barriers hindering the transition towards a sustainable energy future.

Discover

What's the World Economic Forum doing about the transition to clean energy?

To put it simply, if we're serious about getting to net zero anytime soon and solving the climate challenge, let's get to yes. Greenlight. Approved.

The US must seize this opportunity to catalyse transformative change and pave the way for a cleaner, more prosperous world for generations to come.

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