June 7, 2023 Tweet A top Energy Department (DOE) official is pressing the renewable energy industry to embrace a higher level of "ambition" in deploying sufficient clean energy to meet goals the industry shares with the Biden administration, arguing companies should try more creative approaches to get around transmission-related challenges.
"There is a real lack of ambition in this industry," argued Jigar Shah, head of DOE's Loan Programs Office (LPO), during a June 7 appearance at the American Council on Renewable Energy's (ACORE) annual Finance Forum.
"The ambition is high on the modelling side of things -- no question, we can model the crap out of everyone else -- but the level of ambition we have in this industry about actually taking full control of our future is very low," Shah added -- specifically pressing industry to help solve transmission roadblocks and to embrace more creative solutions to such bottlenecks.
Further, Shah argued that clean energy developers should work more closely with labor and environmental justice groups if they want nearby communities to be receptive to their projects.
The LPO chief, who was previously the co-founder of a finance firm backing solar and other low-carbon projects, says industry tends to focus on the theoretical promise of building needed transmission to integrate high levels of wind and solar power. "But Jigar, the model shows that transmission is amazing! I don't understand why we can't just build it!" he said, summarizing prior remarks he has heard from industry representatives.
Instead, they should be looking at "arguments of real market power around who is winning, who is losing, why are people taking these positions [on transmission policy] and how do we change the way that some of these folks are going to vote."
Shah argued that the political factors are the primary block for new transmission lines, such as those that come with taking land for the projects via eminent domain, and possible higher costs for ratepayers in states crossed by interstate projects.
"There was a notion for a long time that this industry was special, that everything it did was amazing, that frankly we were God's gift to the electricity industry -- but that's no longer the case," he said. "There's a lot of people who don't want to see wind turbines in their backyard, who don't want to see solar panels next to their house."
To address these types of concerns, Shah called for intentionally working with labor groups and community advocates. He chastised developers who only visit a community toward the end of the planning process.
Last year's Inflation Reduction Act (IRA) -- which included a suite of major clean energy incentives -- passed because of a coalition between the clean energy sector, labor groups, and justice advocates, Shah said. "If that coalition breaks apart, that's when you start losing parts of the" IRA.
This comes as legislation suspending the debt ceiling largely omitted provisions to help deploy transmission projects, even though some lawmakers are continuing to press for more a comprehensive permitting bill this year that could include transmission elements.
During the event, ACORE CEO Greg Wetstone applauded the IRA's potential to spur 65-95 gigawatts (GW) of new utility-scale wind and solar projects annually -- which is almost three times more than the country's highest deployment rate. But he also flagged that "unlocking the full benefits" of the law will require doubling the country's historic pace of transmission.
Such deployment levels would go a long way to achieving the Biden administration's target of 80 percent renewable energy generation by 2030 and a 100 percent carbon-free electricity system by 2035.
Shah said industry should think big to address transmission bottlenecks. For example, he argued that, "clearly, the renewable energy industry has the ability to say, 'We're just going to pay for the transmission' and sell the leftover capacity." But right now, it isn't open to taking on that kind of an entirely new business model with different risks, he said.
Without this or other new financing models, "we're not really on track to [tripling the size of] our grid." Instead, he said the country is on track to a grid that is 1.6-1.8 times the size of the current system, with transmission project deployment reaching around 30-50 GW per year, Shah argued.
He also suggested other approaches to building new clean energy projects that could avoid current transmission roadblocks. For instance, he suggested that the renewable sector should consider increasing its ambition on rooftop solar. He said around 4 percent of U.S. homes currently have rooftop systems, and industry tends to be pessimistic about scaling up to levels as high as 30 percent, as is the case in other countries such as Australia.
"Are you really telling me that actually putting solar on rooftops is harder than transmission? That's what I'm hearing from everybody," Shah said.
The LPO head also urged industry to work with tribal governments, citing IRA incentives for these efforts. Shah asserted that the "vast majority" of renewable companies aren't engaging with tribes because they haven't in the past, and so are unsure of their reliability and what it's like to work with them.
But tribes "have the best land in the country for renewable development," Shah asserted, adding that they can "jump over interconnection queues" that are disproportionately limiting renewable projects.
Shah also pressed renewable industry leaders to work with the Biden administration to choose and confirm a fifth member of the Federal Energy Regulatory Commission, which could help advance administrative actions to help speed transmission. -- Abigail Mihaly (firstname.lastname@example.org)