White House will announce Plan to Cut Costs for Solar & Wind Project

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The administration of President Biden will announce a plan to make federal lands cheaper to access for solar and wind power developers. The move came after the clean power industry argued in a lobbying push that lease rates and fees are too high to draw investment and could torpedo the president’s climate change agenda. The decision of Washington to review the federal land policy for renewable power projects is part of a broader effort of President Joe Biden’s government to fight global warming by boosting clean energy development and discouraging drilling and coal mining. A senior counselor to the assistant secretary for land and minerals of the US Interior Department, Janea Scott said, “We recognize the world has changed since the last time we looked at this and updates need to be made”.

The BLM (Bureau of Land Management) of the Interior Department announced on Tuesday that it has initiated a process to revise regulations related to renewable energy permitting and rights-of-way on public lands starting with four public listening sessions in September and a separate consultation with Native American tribes. The sessions will focus on rent lease schedules and fees for wind & solar rights-of-way, application processing times, and environmental justice considerations. The push for easier access to vast federal lands also underscores the renewable energy industry’s voracious need for new acreage. President Biden has an objective to decarbonize the power sector by 2035. The research firm Rystad Energy said the target needs a bigger area than the Netherlands for the solar industry alone. The major issue is a rental rate and fee scheme for federal solar and wind leases designed to keep rates in line with nearby agricultural land values.

The former President Barack Obama’s administration implemented the policy in 2016. The policy has some major solar projects pay $971 per acre per year in rent, along with over $2,000 annually per megawatt of power capacity. For a utility-scale project covering 3,000 acres and producing 250 megawatts of power, that is a roughly $3.5 million tab each year. Wind project rents are generally lower, but the capacity fee is higher at $3,800, according to a federal fee schedule. The renewable energy industry argued the charges imposed by the Interior Department are out of sync with private land rents. It can be below $100 per acre and does not come with fees for power produced. They are also higher than federal rents for oil and gas drilling leases, which run at $1.50 or $2 per year per acre before being replaced by a 12.5% production royalty once petroleum starts to flow.