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The Interior Department Is Halfway to Its New Renewables Goal, But Hurdles Remain

President Barack Obama

SOURCE: AP/Evan Vucci

President Barack Obama arrives to make a speech on climate change, Tuesday, June 25, 2013, at Georgetown University in Washington. The Obama administrations wants to double production of clean energy from public lands.

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It took a little less than four years for the Obama administration to reach its goal of authorizing 10,000 megawatts’ worth of renewable-energy projects on federal land, attaining that milestone in October 2012 with the approval of the 1,000-turbine, 3,000-megawatt Chokecherry and Sierra Madre Wind Energy Project in Wyoming.

In June of this year, President Barack Obama doubled down on that achievement by unveiling his comprehensive Climate Action Plan. As part of that effort, the president directed the Department of the Interior to permit another 10,000 megawatts’ worth of renewable-electricity projects on public lands. Together, the 20,000 megawatts of renewable energy generated by these projects would provide enough clean, inexhaustible power for 6 million homes and vividly demonstrate the critical role that clean energy development on public lands can play in the fight against climate change.

In a recent interview with the Center for American Progress, the manager of the department’s National Renewable Energy Coordination Office, Ray Brady of the Bureau of Land Management, said that since the October 2012 announcement, the department has paved the way for projects that would create about 5,000 megawatts of renewable energy­—halfway to meeting the president’s second-term directive.

Surely, generating another 5,000 megawatts over the next six years should be achievable. But while Brady said that, “We’re very optimistic we can meet that goal,” he also acknowledged that “clearly there are some challenges” to clearing the way for another big surge in wind, solar, and geothermal development on vast expanses of federal land, most of which is in the West. “Some of those challenges relate to financing, some to transmission, some relate to where individual states are on their renewable goals, and, based on those goals, whether utility companies are able to enter into power purchase agreements.”

California, which has led the way in accelerating development of large utility-scale renewable-energy projects—many of them on federal lands—illustrates some of these challenges. About half of the projects in the first 10,000-megawatt goal are located in California, but there are ample warning signs that the state may not remain in such a dominant leadership position.

California has the most ambitious renewable-electricity standard in the nation, requiring that by 2020 utilities in the state must generate 33 percent of their power using solar, wind, and other renewable sources. Robert Weisenmiller, chair of the California Energy Commission, told the Center for American Progress that the state’s utilities currently generate about 22 percent of their electricity from renewables. Combined with the utilities’ contracts to purchase sufficient renewable electricity, Weisenmiller expects California to exceed the 33 percent standard by 2020. Part of California’s success, he said, resulted from the “explosive growth of rooftop solar” on homes and small businesses.

Furthermore, Shayle Kann, vice president of research at Greentech Media, said in an interview with CAP that California utilities have already procured so much renewable energy from large projects that “they have enough to meet their [state-mandated] requirements for the next four years or so. … The utilities don’t need that much.”

Kann, however, points out that a big wild card is coming in 2016. The solar investment tax credit—a credit that the Solar Energy Industries Association says is vital to the rapid growth in the U.S. solar-energy sector that “has helped annual solar installations grow by over 3,000 percent” since its adoption in 2006—is up for congressional renewal and may expire. If it does, Kann says, “the economics look a lot worse” after 2016. “It’s not to say no projects will exist after 2015, but you’ve effectively made them cost 20 percent more.”

Another factor that could make the administration’s second 10,000-megawatt goal more difficult to reach is that California’s politics and laws favor the development of renewables inside its borders and disfavor the importation of renewables from other states.

“Under state law, there is a real preference for in-state resources,” said Weisenmiller—one that is emphasized by California Gov. Jerry Brown (D), who strongly prefers homegrown power.

That bias could be hurting the huge Wyoming wind project that the Department of the Interior approved last year. That $6 billion project, currently being developed by a wholly owned subsidiary of the Anschutz Corporation owned by billionaire Philip Anschutz, is linked to a second Anschutz project: the TransWest Express, a planned transmission line with an estimated cost of $3 billion that would carry power for 725 miles from Wyoming to California. Anschutz’s companies have aggressively courted potential utility customers in California but have not signed purchase agreements.

“To really make it play on the transmission side, you have to do a very big project,” said Weisenmiller. “3,000 megawatts is a lot of power to get into California … The investor-owned utilities don’t need that much, and so [the Anschutz companies] are looking more at southern California municipals. But that’s a pretty big lot of power for them.”

Brady said that the Bureau of Land Management is aware of the challenges in California over the next few years. He notes, however, that Gov. Brown has made it clear that the state’s 33 percent renewable-energy standard “is not a cap, so you are going to continue to see the governor encouraging utilities to be more and more aggressive.” Beyond California, Brady says that there are opportunities for more utility-scale renewable projects on federal land in other western states, including Nevada and Arizona.

“Our plan is to meet that goal before 2020,” Brady said.

Brady is correct in seeing significant possibilities for renewable energy in the West. A 2012 analysis by the Center for American Progress found that six western states—California, Arizona, Colorado, Nevada, New Mexico, and Utah—could host clean energy projects that would provide 34,000 megawatts of renewable energy.

Several policy changes could spur the Obama administration’s goal of a very robust system of renewable-energy production, including a national clean energy standard; a clean resources standard for public lands that would require 35 percent of the electricity generated from federal land resources to come from renewables; the creation of wind-energy zones on federal lands; and the reform of the nation’s transmission system.

A more modern system of offering public lands for renewable-energy development—one based on competitive leasing rather than the current system of right-of-way applications—could also facilitate sensible development. A proposed federal rule to effect that change is currently under consideration by the Bureau of Land Management, and a bipartisan group in Congress has introduced legislation to begin a pilot-leasing program for renewables on public land. President Obama’s energy goal is within reach—all that remains is how to achieve it.

Tom Kenworthy is a Senior Fellow at the Center for American Progress.

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