Permitting Issues Hindering U.S. Renewable Energy Project Development

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Researched by Industrial Info Resources (Sugar Land, Texas)--At the end of 2008, Congress passed legislation to extend the Production Tax Credit for renewable energy. The Obama administration tacked on $20 billion in tax credits for 2009. The different energy sources supported under this tax incentive are wind, hydroelectric, geothermal, bioenergy, solar energy, tidal and wave. These mandates will ensure that renewable-energy project development remains the focus of power generators in the U.S. in 2009 and beyond, as more than 4,800 megawatts (MW) of renewable energy projects are currently under construction in the U.S., and an additional 149 gigawatts (GW) are in the early development stages.

After updating hundreds of renewable energy projects over the past several months, Industrial Info has identified several key trends and constraints affecting project development today. Of the projects scheduled to start construction in 2009 only about 29% are expected to move forward on time. Approximately 60% has been delayed and 11% has been canceled. The main constraint to renewable energy project development these days is permitting, which accounts for about 32% of the project delays.

Click on the image at right to view a chart showing the breakdown of renewable energy project delays.

Permitting Trends & Constraints

• In most cases it takes 18 months to two years to acquire the permits necessary for construction to begin. In some of the northern states, the permit process was more lax on small projects. In some cases, wind developers with less than 100 MW could receive permits within six months. For example, this meant the developers would take a 350-MW project and develop it in four phases. This, in turn, would meet the prerequisite mandated by the state and not require it to be involved with federal regulations. This process allowed many projects to move forward at unprecedented rates.
• Permitting offshore wind projects is a fairly new industry, because not enough wind data has been collected to support the projects. Federal regulations have hindered the growth of these programs because of the long process for acquiring the permits necessary to begin construction.
• Bird migratory routes and the protection of bats have brought forth the influx of social groups in opposition of many onshore wind projects.
• Community-Based Energy Development projects seemed to provide access to many projects being developed. The projects allowed the community to basically have ownership and involvement in the development of the windparks. Permits were obtained faster, and construction started faster than usual, eliminating interference from many special interest groups.

Besides permitting, other constraints to project development include financing, availability of electrical transmission lines, power-purchase agreements and equipment availability.

These issues are being discussed this week at the Renewable Energy World Conference & Expo North America 2009 being held in Las Vegas, Nevada. Industrial Info is hosting booth No. 500 at the conference and is providing demonstrations of new product offerings, including the Renewables Tracker and the improved Renewable Energy Database featuring more than 200 GW of renewable projects under development, including wind, hydroelectric, tidal, solar, biomass, biodiesel, geothermal, landfill gas and waste.

For details on the Renewables Tracker, contact Industrial Info's Member Center at 1-800-762-3361.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.