Renewable Energy Resource Development

Posted: Aug 31, 2010

The problems associated with climate change are gaining international attention, which is fueling the renewable energy effort across the globe. National governments are recognizing the growing importance of renewable energy as a tool for meeting national and international carbon emission restrictions (see Climate Change Section) and as a strategy to reduce dependence on foreign oil. The United States’ principal renewable energy resources are wind, solar, biomass, and geothermal energy. American renewable energy legislation is still an emerging area of the law, although the nation has made some major strides in the last several decades. The development of renewable energy resources in the United States has been advanced by several major federal laws and associated regulations:     

These laws and policies are informed by a growing number of studies that attempt to quantify the potential contribution of renewable sources of energy in the U.S. For example:

  • study published by the National Renewable Energy Laboratory in May 2010 concluded that wind and solar energy could provide 35 percent of the electricity used for half the western states by 2017. Reaching this goal would not necessarily mean building extensive new transmission, the report says, and if renewable energy were 20 percent or less of supply, it would require little to no new transmission. Instead, the study leader said, suppliers would need to utilize the full capacity of current transmission, some of which is now underutilized.
  • Another study, published by the Post Carbon Institute in August 2010, concluded that alternative energy is still bound by a fossil-fuel-based supply chain that would have to change in fundamental ways to support a national shift to renewable sources, and outlined nine barriers that create obstacles to large-scale development of alternative energy sources: scalability and timing, commercialization, substitutability, material input requirements, intermittency, energy density, water, the "Law of Receding Horizons," and energy return on investment.
  • report published by the Brookings Institution in September 2010 argued that the Mountain West has a pivotal role to play in securing our nation’s clean energy future and proposed the creation of four to six new “federally funded, commercialization-oriented, and broadly collaborative energy research and innovation centers,” intended to align existing regional assets to accelerate technology commercialization. 
  • The American Council on Renewable Energy reported in March 2011 that "state-level policy commitments to renewable remained strong, with 36 states plus DC having state-run renewable portfolio standards, and 17 states plus DC having state funds for renewable energy." Renewable Energy in America: Markets, Economic Development and Policy in the 50 States.
  • In June 2012, NREL published the Renewable Electricity Futures Study, which concluded that renewable energy could supply up to 80 percent of the country's electricity by 2050 if the U.S. makes major upgrades to the electric energy grid and implements clean energy policies.

In October 2010, the New York Times opined that the U.S. needs to take three major actions to catch up with Europe and China in renewable energy development:

  • Provide generous federal subsidies to encourage new project development;
  • Speed up project approval; and
  • Update and expand the electrical grid with new transmission facilities.

In April 2012, the New York Times examined the challenges facing renewable energy development in the West, including the low price of natural gas, the high price of gasoline, and controversies over federal subsidies for renewable energy companies.

This discussion summarizes the federal laws and policies that influence the use of renewable energy. Separate sections address particular renewable energy sources in more detail, including solar energywind energy, and bio-energy.

Overview of Federal Law on Renewable Energy Resources

This section contains summaries of some of the major sources of federal renewable energy law. The sources are described in chronological order, beginning in 1992. Currently pending legislation is listed in a separate section.

The law firm Stohl Rives published a useful series of "The Law of" guides to specific areas of renewable energy law, available here.

The Energy Policy Act of 1992

The Energy Policy Act of 1992 (EPAct of 1992) was one of the first major pieces of federal legislation to advance renewable energy development. The EPAct of 1992 directs the Secretary of Energy to: (1) prepare and submit to Congress a three-year national renewable energy and energy efficiency management plan with specified contents; (2) establish a renewable energy export technology training program for individuals from developing countries; (3) make Renewable Energy Advancement Awards in recognition of developments that advance the practical application of certain renewable energy technologies; and (4) study and report to the Congress on whether certain conventional taxation and ratemaking procedures result in economic barriers to, or incentives for, renewable energy power plants compared to conventional power plants. It also calls for the use of alternative-fueled vehicles as part of the federal and state fleets. 

The EPAct of 1992 represents a departure from prior renewable energy laws in two ways. First, it establishes that renewable energy technologies will be chosen for federal support on a competitive basis, and, second, it gives the Secretary of Energy wider latitude to choose financial mechanisms, like interest rates, for implementing the technology demonstration and commercial application program. The EPAct of 1992 also includes some of the renewable energy tax credits that have become so prevalent in recent renewable energy legislation, including a deduction for “clean fuel vehicle,” solar energy, and geothermal energy properties.

The Energy Policy Act of 2005

A little more than a decade after the enactment of the EPAct of 1992, the Energy Policy Act of 2005 (EPAct of 2005) was signed into law, representing the next major piece of federal legislation to address renewable energy resources. The EPAct of 2005 establishes five new tax credits for renewable energy development: 1) A modified renewable resources electricity production credit 2) Clean renewable energy bonds 3) A business solar investment tax credit 4) A business fuel cell tax credit 5) A residential energy-efficient property credit The EPAct of 2005 also sets new goals for energy efficiency and renewable energy in federal facilities and fleets as well as a Renewable Fuels Standard (RFS) to increase the use of ethanol and biodiesel in commercial gasoline. The RFS requires that the annual aggregate production of commercial gasoline contain at least 4 billion gallons of renewable fuel in 2006, increasing to 7.5 billion gallons in 2012. A gallon of cellulosic ethanol counts as 2.5 gallons of renewable fuel. (See BIOFUELS page for more information on the RFS). 

In addition to encouraging biofuels development, The EPAct of 2005 also takes a significant step toward geothermal energy development by establishing the Intermountain West Geothermal Consortium (IWGC). For more information on the IWGC, see the Geothermal Page-- Process Essentials: Federal. 

The Energy Independence and Security Act of 2007

Two years later, Congress passed the Energy Independence and Security Act of 2007 (EISA). The EISA is a comprehensive energy policy law designed mainly to increase energy efficiency and the availability of renewable energy. It also extends and increases the Renewable Fuel Standard (RFS) set by the Energy Policy Act of 2005. The modified standard requires 9 billion gallons of renewable fuel in 2008, increasing to 36 billion gallons by the year 2022 (21 of which must be from cellulosic ethanol and other advanced biofuels). See timetable chart.

More Highlights from the Energy Independence and Security Act (EISA) of 2007:

  • Title II, Subtitle B, Section 234 = grants of up to $2 million for university-based research and development of renewable energy technologies.  Priority is given to universities with (1) established renewable energy research programs, (2) low income or rural locations, (3) a joint venture connection to an Indian tribe, and (4) proximity to trees dying of insect infestation or disease as a source of woody biomass
  • Title IV = support and requirements for the development of federal and commercial high-performance green buildings
  • Title VI, Subtitle E, Section 656 = Department of Energy (DOE) will establish a cost-shared Renewable Energy Innovation Manufacturing Partnership Program. The Partnership Program is authorized to make assistance awards to support research, development and deployment of advanced manufacturing processes, materials, and infrastructure for renewable energy technologies. The Partnership Program also aims to increase domestic renewable energy production and to better coordinate federal, state, and private resources through partnerships. Solar, wind, biomass, geothermal, energy storage, and fuel cell systems are eligible renewable energy technologies.
  • Title X = funding of up to $125 million for establishing national and state “green” job training programs administered by the Department of Labor.  The training programs are designed to help address job shortages that are impairing growth in green industries such as renewable electric power, energy efficient construction, and biofuels development.
  • Title XII, Section 1201 = Small Business Administration (SBA) may make loans to small businesses for renewable energy projects.

The Energy Improvement and Extension Act of 2008

The Energy Improvement and Extension Act (EIEA) of 2008 was enacted as Division B of the Emergency Economic Stabilization Act of 2008 (P.L. 110-343, H.R. 1424)). The EIEA is intended to provide, inter alia, renewable energy incentives, transportation and domestic fuel security, and greater energy conservation and efficiency. It increases renewable energy incentives by extending the placed-in-service date for the Section 45 tax credit through December 31, 2009 for wind energy, and through December 31, 2010 for other sources. The EIEA also expands the types of facilities qualifying for the tax credit to include small commercial wind properties, geothermal heat pump properties, new biomass facilities and facilities that generate electricity from marine renewables (e.g., waves and tides). The 30 percent investment tax credit for solar energy properties is extended through 2016, and the credit cap for solar electric investments is removed. The credit remains capped at $4,000 for residential wind investments and at $2,000 for geothermal heat pumps. 

The EIEA also encourages renewable energy development by authorizing $800 million of new clean renewable energy bonds to finance facilities that generate electricity from wind, closed-loop biomass, open-loop biomass, geothermal, landfill gas, marine renewable and trash combustion facilities. The bonds are allocated by thirds: 1/3 for qualifying projects of State, local, and tribal governments; 1/3 for qualifying projects of public power providers; and 1/3 for qualifying projects of electric cooperatives. The termination date for existing clean renewable energy bonds is extended by one year. Qualified bonds include green building, rural development through the use of renewable energy to generate electricity, and development of biofuels. 

Like the EISA of 2007, the EIEA encourages the production of advanced, cellulosic biofuels. Under the EIEA, taxpayers can immediately write off 50 percent of the cost of facilities that produce cellulosic biofuels if the facilities are placed in service before January 1, 2013. 

The EIEA also encourages biodiesel production through tax incentives. It extends the production tax credit for biodiesel for small biodiesel producers through 2009. It also extends the production tax credit for agri-biodiesel and eliminates the current-law disparity in credit for biodiesel and agri-biodiesel. Agri-biodiesel is a special type of biodiesel made from certain agricultural products including vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, and mustard seeds, and from animal fats. As a result of the EIEA, the credit will be available for any diesel fuel created from biomass without regard to the process used, as long as the fuel can be used for home heating oil, for vehicle fuel, or for aviation jet fuel. However, biofuels or fuel components produced outside the United States for use as a fuel outside the United States will not be eligible for the tax credits. Click here for more information about agri biodiesel.

The EIEA also extends the more general alternative fuel credit by three months (until December 31, 2009). Alternative fuel is defined to include compressed or liquefied biogas. 

Energy-conscious homeowners are helped directly by the EIEA, which extends the tax credit for energy-efficient existing homes through 2009. The Act also establishes energy-efficient biomass fuel stoves as a new class of energy efficient property eligible for a consumer tax credit of $300.

The American Recovery and Reinvestment Act of 2009

Most recently, Congress has encouraged the development of renewable energy resources through the American Recovery and Reinvestment Act (ARRA) of 2009. The ARRA authorizes a great deal of new funding for renewable energy resource development. Most notably, it provides $16.8 billion in funding for the Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy (EERE). To put this amount of funding in perspective, the EERE only received $1.7 billion in fiscal year 2008. The EERE website shows the final breakdown of the funding. Out of the total $16.8 billion, $2.5 billion is available for applied research, development, demonstration, and deployment, including: 

  • $800 million for the Biomass Program     
  • $400 million for the Geothermal Technologies Program     
  • $117 million for the Solar Technologies Program     
  • $93 million to support wind energy projects     
  • $25 million for the Massachusetts Wind Technology Testing Center 
  • $300 million for an Alternative-Fueled-Vehicles Pilot Grant Program

Additional Funding Provided by the ARRA of 2009: 

  • $400 million for the Advanced Research Projects Agency – Energy (ARPA-E) to support innovative energy research.
  • $6 billion to support loan guarantees for renewable energy and electric transmission technologies. The DOE Loan Guarantee Program is only allowed to make loan guarantees to projects that will start construction by September 30, 2011, and that involve renewable energy, electric transmission, or leading-edge biofuel technologies.
  • $4.5 billion to the U.S. General Services Administration (GSA) to convert federal buildings into high-performance green buildings, which generally combine energy efficiency and renewable energy production to minimize the energy use of the buildings.

The ARRA of 2009 also establishes $3.2 billion in funding for Energy Efficiency and Conservation Block Grants, which were established in the Energy Independence and Security Act (EISA) of 2007, but were not previously funded. For background on the program, see pages 176-183 of the EISA of 2007. These block grants will go toward states, eligible local governments, and tribal governments to provide support for programs and strategies that increase energy efficiency and decrease fossil fuel emissions. (See EISA of 2007, Title 5, Subsection E). An eligible entity may use the funds for the development, implementation and installation of electricity-generating renewable energy technology on or in any government building. (See EISA of 2007, Title 5, Subsection E, Section 544 (13)). Solar energy, wind energy, fuel cells, and biomass technology projects are eligible for grants along with any other appropriate activity as determined by the Secretary of Energy along with the Administrator of the EPA and the Secretaries of Transportation and of Housing and Urban Development. (Id.) 

Much like previous renewable energy legislation, the ARRA also increases various tax incentives for the use of renewable energy. (See ARRA of 2009, Division B, Title I, Subtitle B, Part I).

Key Concepts

Renewable Energy Standard (RES)/ Renewable Portfolio Standard (RPS)

An RES or RPS requires that a certain percentage of an electric utility’s total power capacity or generation of electricity must come from wind, sun, and other renewable energy resources. The percentage is mandated by the legislature, and the electric utilities must comply with the RPS by a specified date. At the state level, the RPS percentages range from modest to ambitious, and the definitions of renewable energy resources vary. Some states have implemented a cap-and-trade system of renewable energy credits to ease the burden on utilities with less access to renewables, allowing them to purchase credits and comply more slowly over time. A few states have rejected the mandatory nature of an RPS and have adopted a state renewable energy goal instead. The remaining states, mostly in the southeast, have not adopted any standards or goals for renewable energy use in electricity production. 

The Pew Center for Global Climate Change provides a national map showing the current status of state renewable energy portfolios. 

Renewable energy industry officials and others have called for a national RES.  A study released in February 2010 concluded that establishing an RES of 25 percent by 2025 would create 274,000 manufacturing, construction, and engineering jobs. Legislation introduced but not enacted in the 111th Congress would have required utilities to generate 15 percent of their electricity from renewable sources by 2021. President Obama called for expanded renewable energy generation in his 2011 State of the Union Address, and in March 2011, Senators Mark Udall (D-Colo) and Tom Udall (D-NM) floated a measure that would require utilities to generate 25 percent of their energy from wind, solar, and other renewable sources by the year 2025. This national RES would be scaled in, starting with a 6 percent standard in 2013. A national advocacy group, 25x'25, is pushing for this goal, with a strong emphasis on woody biomass as a renewable energy source.

In March 2011, several conservative groups filed a lawsuit against the State of Colorado, alleging that its renewable energy standard initially approved by voters in 2004 violates the interstate commerce clause of the U.S. Constitution. The lawsuit claims the standard discriminates against other fuels for electricity, such as natural gas and coal. It also claims the commerce clause prohibits states from imposing burdens on the interstate electricity market. See "Lawsuit in federal court challenges Colorado's renewable energy standard," Grand Junction Sentinel, 4/4/11. A legal challenge to Arizona's RES rule was rejected by the Arizona Court of Appeals in April 2011. See "Regulators' rule on alternative energy is upheld," Arizona Republic, 4/8/11.

For an analysis of the costs of obtaining energy from various renewable sources, see "Utilities weigh price of power with aging plants and renewable mandates," Denver Post, 8/21/11.

Renewable Energy Transmission

Renewable energy development is often hindered by a lack of transmission capacity at a proposed project site. Often, this is because the proposed sites for large-scale projects are too far from existing utilities, and would require very costly construction of new power lines. For example, a group of 300 landowners in Wyoming is currently struggling with a lack of transmission capacity to develop the wind energy on their lands. Together, they own about 670,000 acres which represent about 6,310 megawatts of wind energy potential. Unfortunately, they currently have no power lines to transmit the energy, so wind energy projects remain unfeasible. The landowners may receive at least a portion of their desired transmission capacity in 2013. A 345 kilovolt transmission line, known as the Wyoming-Colorado Intertie Project, is scheduled to begin operating in 2013 and would allow for about 850 megawatts of new electricity generation via wind or other sources in eastern Wyoming. 

In order to be most successful, renewable energy development also requires coordination of project construction timelines and transmission construction timelines. Renewable energy projects can be sited, developed, and constructed much more quickly than the new transmission lines can be built. Thus, project timing coordination between renewable energy developers and local transmission utilities is very important if the energy project is to be operational as soon as possible.  If a future development area can be determined in advance, transmission construction can be planned and timed so that the land already has full transmission capacity once the renewable energy project is completed.

As is explored in the separate sections on solar, wind, and other renewable energy sources, the paths of transmission lines create controversy in the West, where open landscapes offer economically valuable recreation and ecologically valuable habitat and migration routes for wildlife and birds. For example, in 2011 the Obama administration faced conflicting priorities in deciding whether to issue an incidental take permit under the Endangered Species Act for a proposed transmission line for wind turbines and transmission lines on non-federal lands in nine states from Montana to Texas, overlapping with the Central Flyway migration route of federally listed endangered whooping cranes.

Several reports highlight the transmission challenges to renewable energy development in the West:

See also:

Responsible Agencies

The Department of Energy – Office of Energy Efficiency and Renewable Energy (DOE – EERE) and the Department of the Interior – Bureau of Land Management (DOI – BLM) are the agencies primarily responsible for the development of renewable energy resources. The latter is responsible for renewable energy development on public lands. Links to their websites can be found below under “Useful Agencies and Links.” 

Process Essentials: Renewable Energy Development in the Private Sector

Private companies looking to engage in renewable energy development have various options to consider. If the company does not yet have an implementation plan, it can seek help from an energy engineering and consulting firm that specializes in renewable energy assessment and remodeling. (For example, see Energy and Resource Solutions). Once the company decides on a strategy and type of renewable energy development, it must look to local regulations in order to establish guidelines for the project. If the project involves a great deal of new construction, the company must look to local construction codes and zoning ordinances. See an example of a wind turbine ordinance from the City of Holland, Michigan. 

In the construction industry, “green” building is a growing field, especially as federal and state legislation increasingly requires federal and state buildings to be “green.” However, as green building increases in popularity, so does the likelihood of green building litigation. In 2007, Shaw Development v. Southern Builders was the first case to raise the issue of who is responsible if a construction project does not achieve a LEED rating or other green certification that the developer was counting on. The contractor in Shaw Development sued the developer under a mechanic’s lien claim, and the developer countersued for the lost green building tax credit, worth $635,000 on a $7.5 million condominium project in Maryland. The developer argued that the project design included a number of green building elements that the contractor failed to follow, which consequently prevented the project from achieving at least a LEED Silver rating and the corresponding tax cut. The developer further asserted that it had relied on the LEED credential because the economic success of the entire project probably hinged on the green building tax cut. Unfortunately, the case settled out of court, so questions remain as to the scope and likelihood of success of future green building lawsuits. 

In addition to green government and commercial construction, some residential homebuilders see green energy as the key to increasing their property sale prices as well as their reputations within their communities. For a good discussion of the process that homebuilders should follow when installing solar energy systems on their properties, see the Department of Energy Office of Energy Efficiency and Renewable Energy’s publication, “A Homebuilder’s Guide to Going Solar.”  Individual homeowners seeking to install renewable energy systems in their homes will want to consider the available tax incentives in addition to the local regulations and ordinances. Renewable energy systems can sometimes be cost-prohibitive for individuals, which is why federal and state incentives have become an important tool in renewable energy development. Links to both state and federal incentives and policies are available at the Database of State Incentives for Renewables and Efficiency (DSIRE) website. Homeowners interested in solar power should consult “Own Your Power!: A Consumer Guide to Solar Electricity for the Home,” a publication from the Department of Energy – Office of Energy Efficiency and Renewable Energy. 

People who are more broadly interested in the sites and sources of renewable energy development in the United States may wish to examine the interactive map available at the Natural Resources Defense Council (NRDC) website. This map, entitled “Renewable Energy for America,” shows existing and planned renewable energy facilities as well as the state-by-state and county-by-county potential for further renewable energy development. The map can be searched by geographic location as well as by type of renewable resource. 

Process Essentials: Renewable Energy Development in the Public Sector

The primary agency responsible for renewable energy development on public lands is the Department of the Interior (DOI), which often acts through its sub-agency, the Bureau of Land Management (BLM). In March of 2009, DOI Secretary Ken Salazar established an energy and climate change task force with the purpose of identifying specific zones on U.S. public lands where the department can facilitate rapid development of large-scale solar, wind, geothermal, and biomass energy facilities. Secretary Salazar also stated that the DOI will work closely with other federal agencies, states and American Indian tribes to determine what electric transmission infrastructure and corridors are needed to deliver these renewable resources to major cities. 

The BLM has identified approximately 21 million acres of public land with wind energy potential, 30 million with solar energy potential, and 249 million (including a little over 100 million acres of National Forest lands) with geothermal energy potential. For more information on the structure and functions of the BLM see Link to Forest Land Policy and Management Act: Key Concepts: Bureau of Land Management. In recent years, the BLM has taken steps to simplify the process of developing renewable energy on public lands. In 2005, the BLM cooperated with the Department of Energy (DOE) to finalize a Programmatic Environmental Impact Statement (PEIS) in order to analyze and expedite the development of wind energy on public lands in eleven western states, excluding Alaska. See Wind Energy page for more details. The PEIS for wind energy was prepared in accordance with the National Environmental Policy Act of 1969 (NEPA) and the Federal Land Policy and Management Act (FLPMA). 

The BLM has also addressed geothermal energy development on a programmatic scale. In 2008, the BLM and the United States Department of Agriculture Forest Service (FS) cooperated to produce a joint PEIS to simplify the geothermal leasing of BLM-and FS-administered lands in eleven western states and Alaska. See Geothermal Energy page for more details. Like the PEIS for wind energy, the PEIS for geothermal energy was prepared in accordance with NEPA and FLPMA. 

The BLM is also cooperating with the EERE, the DOE, and the DOI to prepare a PEIS for solar energy projects. Once it is finalized, the solar energy PEIS will establish environmental policies and mitigation strategies for solar energy projects on federal land. Completion of the draft PEIS for solar energy has been postponed so that the agencies may consider and include the preliminary results of the Western Governors’ Association’s Western Renewable Energy Zone transmission study. The BLM is currently analyzing solar study areas for the PEIS and it will be accepting public comments on those study areas until July 30, 2009, and after July 30 to the extent practicable. The draft PEIS was released in the fall of 2009. Upon release, the draft will also be open to public comment. Importantly, the PEISs for both wind and geothermal energy (and presumably for solar energy) are not intended to trump site-specific evaluations prior to leasing. Location-specific factors such as public sentiment and the presence of endangered species as well as the size of the proposed project will continue to be evaluated by the BLM and other concerned agencies on a site-by-site basis.

In April 2011, the BLM released a new interim rule exempting land under consideration for renewable energy development from competing hardrock mining claims under the 1872 Mining Law, which previously allowed such mining claims to take precedence over other land uses. In some cases, speculators asserted mining claims in areas targeted for renewable energy development, hoping to profit from the renewable energy project developers. The BLM finalized the rule in May 2013.

The Natural Resources Defense Council (NRDC) has also become a major player in the identification of renewable energy sites. gave $25,000 each to the NRDC and the National Audubon Society to create a Google Earth map of western public lands that shows desirable and undesirable areas for renewable energy development. The map identifies critical habitats for endangered species; “restricted” areas, including DOI-designated areas of critical environmental concern; and lands that “should be avoided,” including state wilderness areas and proposed federal wilderness areas. The map is intended to ease the permitting process for renewable energy developers and for utilities and municipalities looking to connect to renewable energy sources. It is available here

"We need to deploy clean energy on an unprecedented scale. As we decide where to build renewable energy generation plants and transmission lines, it’s essential that we protect irreplaceable wildlife and landscapes while making it as easy as possible for developers to build these projects. NRDC and the National Audubon Society have created a valuable tool that can help guide developers away from sensitive areas and serve as a platform to streamline the siting process while protecting sensitive wildlife and landscape areas.” 
-- David Bercovich, Program Manager

Offshore Renewable Energy Development on Public Lands

The Energy Policy Act of 2005 granted regulatory jurisdiction of OCS renewable energy projects to the DOI’s Mineral Management Service (MMS), but no action had been taken prior to Secretary Salazar’s decision to finalize the leasing and licensing rules with the FERC. According to the new rules, the MMS will have exclusive jurisdiction over the production, transportation, and transmission of energy from non-hydrokinetic renewable energy projects, including wind and solar power. The FERC will have exclusive jurisdiction over construction and operation licenses for hydrokinetic projects, including wave and current, but only after the projects’ managers obtain a lease through the MMS. The FERC may choose to become a cooperating agency with the MMS in the preparation of environmental documents for a lease for any OCS hydrokinetic project. Similarly, the MMS may choose to become a cooperating agency with the FERC in the preparation of environmental documents for a license or exemption of any OCS hydrokinetic project. Both agencies will cooperate to ensure that all of FERC’s actions are consistent with the provisions of the Outer Continental Shelf Lands Act and other applicable laws.

On June 23, 2009, the DOI issued first-time “exploratory” leases to four developers for offshore wind projects. The leases allow data-gathering towers to be built off of the coasts of New Jersey and Delaware in order to explore future development of commercial wind farms in federal waters. Bluewater Wind Delaware LLC was one of the four developers to obtain an offshore lease. If the exploration measures are successful, Bluewater Wind plans to construct a 150-turbine wind power plant with a 230 to 450 megawatts production capacity. It is estimated that the project would generate more than 1,000 jobs during construction and produce millions of dollars in annual revenue for the state of Delaware.

More on the Rules and Regulations for Offshore Renewable Energy Development on Public Land


  • Compliance with the National Environmental Policy Act (NEPA) and the Coastal Zone Management Act (CZMA) will be required throughout the life of an OCS renewable energy  project.
  • Two types of leases will be issued: 
    1. commercial leases – full build-out and commercial production of energy over a long term (about 25 years).     
    2. limited leases – data collection and technology testing activities over a short term (about 5 years).
  • All leases include the right to a project easement for installing necessary gathering, transmission and distribution equipment.
  • Leases will be issued on a competitive basis, unless there is no competitive interest.

The Competitive Leasing Process:
1.) Issuance of the Call for Information seeking information from all parties interested in and affected by the potential lease sale.
2.) Publication of the Area Identification identifying specific areas for leasing consideration as well as any alternatives to the proposed sale action, mitigation measures, and issues to be analyzed and considered for leasing.
3.) Preparation of necessary environmental compliance documentation (for example, NEPA, CZMA, and the Endangered Species Act (ESA)).4.) Publication of the Proposed Sale Notice requesting comments on the proposed bidding s
ystems, fiscal terms, lease terms and conditions, mitigation, and award criteria. 
5.) Publication of the Final Sale Notice
6.) Conduct of lease auction and evaluation of bids
7.) Issuance of leases

The Noncompetitive Leasing Process: 
1.) Proposal for OCS renewable energy project sent to and received by MMS
2.) Publication of notice describing proposal and requesting information to use in determining whether a competitive interest exists.
3.) If no competitive interest exists, MMS can issue a noncompetitive lease.  If a competitive interest exists, then MMS must follow the competitive process above.
4.) Applicant submission of Site Assessment Plan
5.) MMS review of lease and Site Assessment Plan and preparation of necessary environmental compliance documentation (e.g., NEPA, CZMA, ESA)
6.) MMS determination of lease terms and conditions in consideration of environmental, socioeconomic, and market factors.

Renewable Energy Development in the Western States

State law and policy also play an important role in renewable energy resource development and are often categorized by type of renewable resource or by geographic location. Sometimes, states join together to cooperate on broader-scale renewable energy plans. In the West, for example, several states have joined together on the Western Renewable Energy Zones project of the Western Governors’ Association (Click here for more information). A recent National Wildlife Federation report  highlighted the tremendous potential for renewable energy development on Indian lands in the West, which make up 5 percent of the country and hold 10 percent of the nation's renewable resources.

The western United States will also be home to several new federal renewable energy offices. In June of 2009, Secretary of the Interior Ken Salazar announced that the Department of the Interior (DOI) will open four renewable energy offices to help expedite the application process for renewable energy projects in the west. The four new renewable energy offices will be located in Arizona, California, Nevada, and Wyoming.  

Click here for state-by-state listings of current incentives for renewable energy development. Click here or an interactive map and list of large, grid-connected renewable energy projects in the “Interwest” states (Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming). 

For a brief synopsis of renewable energy development in a few of the western states, see below: 


California receives more of its electricity from renewable geothermal, solar, and wind resources than any other state (click here for more information.) California is also a national leader in Renewable Portfolio Standards. The California RPS of 20 percent--which will rise to 33 percent--is one of the most ambitious standards in the country. An effort to defeat this standard by citizen initiative failed in 2010.

California adopted a Renewable Energy Transmission Initiative (RETI) to help identify necessary transmission projects, to support future energy policy, to facilitate transmission corridor designation and transmission, and to ease renewable energy generation siting and permitting. The RETI will also work to identify renewable energy zones in California and in neighboring states that are willing to provide electricity to California utilities by 2020. Furthermore, the RETI will identify renewable energy zones where development can occur in the most cost-effective and environmentally friendly manner. Once these zones are identified, the RETI calls for the preparation of detailed transmission plans to facilitate renewable energy development on these sites. The RETI process will be open and collaborative for all interested parties and will be supervised by a coordinating committee made up of representatives from the California Public Utilities Commission (CPUC), the California Energy Commission, the California Independent System Operator (California ISO), and the publicly owned utilities (SCPPA, SMUD, and NCPA).

California is also seeking to encourage renewable energy development with its newly created $10 million "Renewable Energy Resources Development Fee Trust Fund," which will allow energy firms to meet obligations under the California Endangered Species Act without directly improving habitat for species. The new fund will allow renewable energy developers to offset environmental damage caused by their projects by paying into a state mitigation fund rather than making landscape improvements themselves. Click here for a story about the likely impact on solar energy development in the state.


As home to the National Renewable Energy Laboratory (NREL), Colorado is a leader in renewable energy research and development. For example, in 2004, Colorado became the first state in the nation to put a renewable energy standard (RES) directly before the voters through the ballot initiative process. Colorado voters passed Amendment 37 into law, establishing a three percent RES by 2007 and a ten percent RES by 2015. In 2007, the Colorado legislature followed suit and passed House Bill 1281, which expanded the RES to 20 percent by 2020. That law also included municipal utilities and rural electric providers, a group that was previously excluded under Amendment 37. These utilities and rural providers must achieve a" target="_blank">ten percent RES by 2020. House Bill 1001, enacted in March 2010, requires Xcel Energy and other investor-owned utilities serving Coloradans to draw 30 percent of their energy from renewable sources by 2020, rather than the previous mandate of 20 percent. The new law also emphasizes small-scale, home-based energy production, and may result in as many as 100,000 homes with solar panels, small wind turbines or other energy-producing devices.

Like California, Colorado has also had its share of renewable energy transmission problems. Colorado has attempted to solve some of these transmission problems through state legislation. In 2007, Senate Bill 100 was signed into law by Colorado Governor Bill Ritter. The law applies to all Colorado electric utilities that are subject to rate regulation. Every other year, these electric utilities are required to identify “energy resource zones” or areas where transmission constraints are hindering electricity delivery to consumers, development of new electricity generation facilities, or both. The electric utilities must also develop plans for the new transmission infrastructure that will be necessary to reach the untapped energy resource zones. In making these plans, the utilities must consider how transmission can be provided to encourage local ownership of renewable energy facilities, such as renewable energy cooperatives. Utility companies must also consider the timing of the development of energy resources in those zones in accordance with the timing of transmission development. If the electric utilities comply with the requirements of the law and receive a Certificate of Public Convenience and Necessityfrom the Colorado Public Utilities Commission, then they may recover the costs that they prudently incur in planning, developing, and completing the new transmission infrastructure.

For more information on Colorado’s renewable energy efforts, see: 

Colorado’s Clean Energy Choices 

Colorado Energy Profile 


In June of 2009, Secretary of the Interior Ken Salazar announced that the Department of the Interior (DOI) will open four renewable energy offices to help expedite the application process for renewable energy projects in the west. The first of these offices will be located in Las Vegas, Nevada. 

In addition to the federal renewable energy office in Las Vegas, Nevada is also home to a state-wide renewable energy office, the Nevada Renewable Energy and Energy Conservation Task Force (“Task Force”), located in Carson City. The Task Force was created by the Nevada legislature in 2001 for the purpose of advising the Nevada State Office of Energy in the creation and review of a comprehensive state energy plan. Each year the Task Force submits an “Annual Report to the Nevada State Legislature and the Governor of the State of Nevada,” which reviews the status of renewable energy in the state, describes the Task Force’s activities, and provides findings and recommendations for future government action, regulations, and legislation. Copies of the Task Force’s Annual Reports can be found here.

Another helpful source for current renewable energy issues in Nevada is the Nevada Public Utilities Commission, which puts its active renewable energy dockets online

New Mexico

New Mexico is also a key player in renewable energy development in the west and throughout the United States. In 2007, New Mexico established the Renewable Energy Transmission Authority (RETA), the first entity of its kind in the nation. RETA’s mission is to help develop new electric transmission capacity to export large volumes of renewable energy to market. New Mexico expects that RETA will also stimulate clean energy production and create high paying jobs, capital investment, and greater economic development in rural areas of the state.  RETA’s publications can be accessed online

Pending Legislation in the 113th Congress

In February, Sens. Jon Tester (D-Mont) and Dean Heller (R-Nev) introduced S. 279, the Public Lands Renewable Energy Development Act, which would create a leasing pilot project to develop a renewable energy development approval process similar to that used for oil and gas.

Useful Agencies and Links

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