ESG - Clean Energy Transition - Challenges

These developers’ perceptions are borne out in facts 3 through 8:

• Community opposition can be expressed in the form of lawsuits, since government-issued permits are open to challenge in court. That means that even if a federal environmental permitting process is swift and efficient, community opposition can slow down the process. Nonetheless, energy infrastructure projects are generally subject to state oversight; most challenges to solar and wind projects are at the state or local level (fact 3).
• Local ordinances and zoning rules constrain which clean energy projects can be built, and where they can be sited; restrictions that limit or outright ban projects are prevalent (facts 4 and 5).
• Getting generation and storage interconnected to the grid is slow (fact 6) and has slowed even more over time (fact 7). The slowdown partly reflects challenges in the federal permitting process but also significant challenges in the state and local permitting processes. This slowing, in combination with a surge in the number of projects entering the queue each year (Welton 2024), has left more capacity stuck in the queue than operating online (fact 8).

Fact 1. Few wind and solar projects required significant federal permits between 2010 and 2021.

Figure 1 shows that wind and solar generators seldom require one of three laborious federal permits: an Environmental Impact Statement (EIS), a 404 permit, or a Habitat Conservation Plan. Between 2010 and 2021, fewer than 5?percent of the 1,883 total wind and solar projects required one of those permits (Adelman 2023).

Fact 2. Federal permitting durations have decreased in the past 15 years.

In recent years, it has taken less time to complete the federal permitting process for the sample of projects in this analysis. Figure 2 shows the number of months it took for a sample of federal energy generation and transmission projects seeking federal permits to move from the first to the last reported milestone. The median duration from the first to the last permitting milestone was 109 months between 2007 and 2015, compared to 47 months between 2016 and 2023. This difference is more pronounced for completed projects, where the average duration for projects that started after 2015 was less than two and a half times that for projects that started in years prior.

Fact 3. Most wind and solar projects are only contested at the state or local level.

Public opposition can lengthen the permitting process. Lawsuits, political actions, political protests, and stakeholder appeals are all avenues for contesting a project. And, these localized pressures are increasing (Adelman 2023). The Sabin Center for Climate Change Law at the Columbia Law School identified 293 contested projects as of May 2023, a 57?percent increase since their March 2022 report (Eisenson 2023). Figure 3 shows that, for wind and solar projects, opposition does not frequently occur on the federal level: Seventy-three?percent of contested projects between 2010 and 2021 were contested only at the state or local level (Adelman 2023; authors’ calculations), while only 25?percent and 17?percent of contested wind and solar projects, respectively, were subject to federal litigation.

Fact 4. Local ordinances constrain where and how clean energy projects are developed.

Local ordinances and zoning requirements are one of the leading causes of renewable project cancellation (Nilson, Hoen, and Rand 2023). Figure 4 shows the distribution of local ordinance and zoning requirement types for wind and solar, classified by the National Renewable Energy Laboratory (NREL). While this figure visualizes the distribution among wind and solar, there are twice as many ordinances governing wind energy as solar energy (NREL 2024a, 2024b).

Fact 5. More than 300 counties have banned or instituted moratoria on wind or solar projects.

State and local authorities can implement ordinances and zoning rules that explicitly or effectively ban the construction of new clean energy projects; figure 5 shows a map of counties that USA Today found were doing so. They identified 32 bans against solar and 292 bans against wind, for a total of 324 total bans in 303 counties, 21 counties of which have banned both energy types. In addition, counties have instituted 26 and 17 solar and wind moratoria, respectively.

Fact 6. More than one thousand projects are withdrawn from the interconnection queue every year.

Grid interconnection is the process by which proposed projects undergo impact studies and adopt needed modifications before connecting to the regional grid. The process, governed by Regional Transmission Organizations (RTOs), Independent System Operators (ISOs), or independent utilities, is inherently complex. First, developers must submit an interconnection request to enter the queue. Next, proposed projects must undergo a variety of tests including feasibility studies, system impact studies, and facilities studies before procuring an interconnection agreement. Finally, projects begin construction and must complete any requirements outside of interconnection to become commercially operational, such as securing supply chains and procuring permits (NREL n.d.). It is typical for projects to wait months or years to finish the full process, and a steady surge in interconnection requests over the past decade has created backlogs in some regions and made interconnection even more difficult (Rand et al. 2024).

Fact 7. Interconnection has been getting slower over the past 20 years.

Typically, interconnection happens in concert with permitting. As a result, permitting-related challenges have increased the amount of time projects spend in the interconnection queue (Silverman et al. 2023; NREL n.d.). Panel a of figure 7 shows that, in the early 2000s, 75 percent of interconnection requests resulted in commercial operation in under three years; in 2023, fewer than 25 percent of requests resulted in operation in under four years, and roughly 25 percent took at least six years. Finishing within a year now is exceedingly rare.

Fact 8. There is more energy storage and generation capacity in the queue than operating online.

In eight of nine U.S. regions, there is more energy generation and storage capacity seeking interconnection than there is online (figure 8). This is most pronounced in California and the West, where there are 6.5 times (California) and 3.3 times (West) as much capacity in the queue as online; and in New York, where there are about 2.8 times as much. And these imbalances are growing with recent surges in interconnection requests. For example, from 2022 to 2023 the ratio of queued to online capacity in California increased from three to seven (LBNL 2023-24; EIA 2024). In five regions, most capacity in the queue is from solar or wind generation. In addition, in all regions, there is more capacity for solar and wind generation in the queue than there is online.

Source - https://www.hamiltonproject.org/publication/economic-fact/eight-facts-permitting-clean-energy-transition/

Moving the grid to net zero has been a challenge due to availability of technology, conversion options, push back by indigenous and environmental interest groups, role of activist shareholder, reliability, and overall costs.

1. Canada producers nearly 80% of its power from clean sources. Many utility companies have raised concerns with cost to move to net zero - https://www.weforum.org/press/2023/11/net-zero-industry-tracker-13-5-trillion-investment-needed-to-fast-track-decarbonization-of-key-hard-to-abate-industry-sectors/. Global inflation is a concern for central banks as such key will be moving to net zero in sustainable way. https://www.bnnbloomberg.ca/business/international/2024/08/10/small-us-inflation-pickup-wont-derail-a-fed-rate-cut-in-september/
2. Connecting to the grid has been an issue for years. Virtual Power Plant and other energy storage are getting more attention including investments - https://knowledge.energyinst.org/new-energy-world/article?id=137707 National Grid or https://cleantechsandiego.org/five-new-sdge-energy-storage-projects-to-support-a-cleaner-more-reliable-grid-to-power-local-homes-and-businesses/
3. Solar panels have challenges with China control including production costs and raw materials - https://www.yahoo.com/news/china-basically-just-admitted-concerned-091437184.html
4. Arable land concerns with solar and wind farms - https://www.agdaily.com/insights/uglier-side-of-solar-farming-is-impacting-agriculture/
5. Biodiversity issues with Solar and Wind - https://www.pacificgreen.com/articles/biodiversity-clean-energy-helps-and-will-do-more/
6. Human rights - https://rskgroup.com/insights/human-rights-must-lead-global-energy-transition/
7. Australia and net zero - https://www.smh.com.au/business/the-economy/australia-s-creaking-power-grid-is-thwarting-renewables-and-pushing-up-prices-20240712-p5jtb8.html Australian Government
8. Grid - https://www.bnnbloomberg.ca/investing/commodities/2024/07/15/the-worlds-power-grids-are-failing-as-the-planet-warms/
9. Fires - Hawaiian Electric posts $1.7B loss from Maui wildfires and issues going concern warning - https://www.dhirubhai.net/posts/paul-young-055632b_hawaiian-electric-posts-17b-loss-from-maui-activity-7228120070038700035-M_cR?utm_source=share&utm_medium=member_desktop
10. Public Safety issues - https://eepower.com/tech-insights/solar-wind-and-fire-making-battery-energy-storage-systems-safer/

Emissions is a key focal point by the utility sector, all levels of government, and special environmental interest groups.

The right balance between moving the grid to net zero and overall cost to the economy including the impact on both GDP growth and the inflation rate - https://www.dhirubhai.net/posts/paul-young-055632b_powell-sees-gains-against-inflation-wants-activity-7214291884838465537-BA2C?utm_source=share&utm_medium=member_desktop

Paul is a former IBM Customer Success Manager that has deployed over 300 data and AI solutions across industry and geographies for the past 8 years. Paul is a Financial Planning, Analysis, and Reporting SME working with data including integration of macro and micro indicators as part of the integrated business planning and reporting cycle.

[email protected]

?What is next for the stock market - https://www.dhirubhai.net/posts/paul-young-055632b_why-the-stock-market-is-freaking-out-again-activity-7226611521848573953-UwYz?utm_source=share&utm_medium=member_desktop

Seeking employment - https://www.dhirubhai.net/posts/paul-young-055632b_hi-all-linked-in-followers-and-contacts-activity-7199365291288506369-qGVf?utm_source=share&utm_medium=member_desktop

?Courses?—? https://www.dhirubhai.net/posts/paul-young-055632b_activity-7163302861974519809-ryf3?utm_source=share&utm_medium=member_desktop

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Monthly Reports – Australia United States Canada and Province of Ontario - https://www.dhirubhai.net/posts/paul-young-055632b_australia-canada-unitedstates-activity-7224703167886737408-QSu3?utm_source=share&utm_medium=member_desktop

Here are my last reports on Australia, Canada, United States, and the Province of Ontario

Monthly Report – Australia – July 2024 and June 2024 - https://www.dhirubhai.net/pulse/monthly-report-australia-july-2024-june-paul-young-8epvc/#

Monthly Report – United States – June 2024 and July 2024 - https://www.dhirubhai.net/pulse/monthly-report-united-states-june-2024-july-paul-young-eqrsc/

Monthly Report – Canada – July 2024 and June 2024 - https://www.dhirubhai.net/pulse/monthly-report-canada-june-2024-july-paul-young-wnpkc/

Monthly Report – Ontario – June 2024 and July 2024 - https://www.dhirubhai.net/pulse/monthly-report-ontario-june-2024-july-paul-young-nqsuc/

Blog – Generative AI all Hype or not - https://www.dhirubhai.net/feed/update/urn:li:activity:7226829444668170240?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7226829444668170240%2C7226832941979426817%29&replyUrn=urn%3Ali%3Acomment%3A%28activity%3A7226829444668170240%2C7226913222509936641%29&dashCommentUrn=urn%3Ali%3Afsd_comment%3A%287226832941979426817%2Curn%3Ali%3Aactivity%3A7226829444668170240%29&dashReplyUrn=urn%3Ali%3Afsd_comment%3A%287226913222509936641%2Curn%3Ali%3Aactivity%3A7226829444668170240%29

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Blog – Magnificent 7 Big Tech Stock and the Great Sell off – Recession and Market Outlook - https://www.dhirubhai.net/posts/paul-young-055632b_magnificent-7-how-big-tech-stocks-have-moved-activity-7226835650367348736-KSGc?utm_source=share&utm_medium=member_desktop

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Stock Market – Australia – August 9 2024 - https://www.dhirubhai.net/pulse/stock-market-australia-august-9-2024-paul-young-ekbic/

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Blog – Stock Market – August 9, 2024 - https://www.dhirubhai.net/pulse/stock-market-week-ended-august-9-2024-paul-young-wmplc/

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Blog – Power Generation (Utility Sector) - https://www.dhirubhai.net/pulse/power-generation-electricity-analysis-commentary-february-young-oqy5e/

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