The Biden administration aims to reduce the costs of wind and solar projects on public land

LOS ANGELES / WASHINGTON, Aug 31 (Reuters) – The Biden administration plans to cheapen access to federal land for solar and wind power developers after the clean energy industry defended this year that Lease rates and rates are too high to get investment and could torpedo the president’s climate change agenda.

Washington’s decision to review federal land policy for renewable energy projects is part of a broader effort by President Joe Biden’s government to combat global warming by driving clean energy development and discouraging drilling and coal mining.

“We recognize that the world has changed since the last time we analyzed this and updates need to be made,” Janea Scott, senior adviser to the U.S. Secretary of the Interior and Department of the Interior, told Reuters.

He said the administration is studying several reforms to facilitate the development of federal lands in wind and solar companies, but gave no details.

The desire to facilitate access to vast federal lands also underscores the voraciousness of the new surface of the renewable energy industry: Biden aims to decarbonize the energy sector by 2035, a goal that would require an area larger than the Netherlands only for the solar industry, according to research firm Rystad Energy.

At issue is a federal solar and wind lease tariff and rental plan designed to keep rates in line with nearby farmland values.

Under this policy, implemented by President Barack Obama’s administration in 2016, some major solar projects pay $ 971 per acre a year in rent, along with more than $ 2,000 a year per megawatt of energy capacity.

For a utility-scale project that covers 3,000 acres and produces 250 megawatts of energy, that is, an approximate figure of $ 3.5 million each year.

Rents for wind projects are usually lower, but the capacity quota is higher, at $ 3,800, according to a federal tariff schedule.

The renewable energy industry argues that the charges imposed by the Department of the Interior are out of sync with private land rents, which can be less than $ 100 per hectare, and do not include tariffs for the energy produced.

They are also higher than federal rents for oil and gas drilling leases, which cost $ 1.50 or $ 2 a year per hectare before being replaced by a 12.5% ​​production royalty once oil begins to flow. .

“Until these overly heavy costs are resolved, our nation is likely to be lost to its potential to deploy clean-produced clean energy projects on our public lands and jobs and economic development. that entails, ”said Gene Grace, general counsel for the American Clean Power Association.

The renewable energy industry has historically relied on private space to locate large projects. But large tracts of uninterrupted private land are becoming increasingly scarce, making federal lands the best options for future expansion.

To date, the Department of the Interior has allowed less than 10 GW of solar and wind power on its more than 245 million acres of federal land, a third of what the two industries were expected to set up in nationwide this year, according to the Energy Information Administration. .

The solar industry began putting pressure on the issue in April, when the Large Scale Solar Association, a coalition of some of the nation’s leading solar developers, including NextEra Energy, Southern Company and EDF Renewables, filed a petition with the Office of Land Management. lower incomes in utility-scale projects in the nation’s bottled deserts.

A spokesman for the group said the industry initially focused on California because it hosts some of the most promising solar surfaces and because land around major urban areas like Los Angeles had inflated ratings for entire counties, even on desert areas unsuitable for agriculture.

NextEra (NEE.N), Southern (SO.N) and EDF officials did not comment when Reuters contacted them.

In June, the Office reduced rents in three California counties. But representatives of solar power considered the measure to be insufficient, arguing that the discounts were too small and that the megawatt capacity rate remained in place.

Lawyers for solar companies and BLM have been debating the issue in phone calls since then, and new talks are scheduled for September, according to Peter Weiner, the lawyer representing the solar group.

“We know the new BLM people have had a lot in the kitchen,” Weiner said. “We really appreciate your consideration.”

Reports by Nichola Groom; Edited by Dan Grebler

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