We discuss key regulatory trends and strategies to consider when pursing US transmission and interconnection opportunities.

By Tyler Brown, Marc T. Campopiano, and Jennifer K. Roy

Renewable energy production has grown at an exponential clip over the past decade, with continued strong expansion expected because of declining costs, numerous governmental incentives, and long-term decarbonization policies. This trend has driven a tremendous demand for new transmission infrastructure in the US and globally, yet new transmission lines often take years to develop due to regulatory hurdles and litigation challenges.

An unprecedented investment in transmission will be needed over upcoming decades to keep pace with demand and meet decarbonization goals. Companies and investors will need to factor into their strategies these key regulatory trends when pursuing US and global transmission and generator interconnection opportunities.

The state must dramatically expand its energy infrastructure and renewable energy sources to satisfy growing demand for electricity while meeting ambitious climate goals, according to California Independent System Operator’s Draft 2022-2023 Transmission Plan.

By Marc Campopiano, Joshua Bledsoe, Julie Miles, and Shawna Strecker

California has committed to ambitious carbon reduction targets and pledged to become carbon neutral no later than 2045.[1] However, to meet these lofty goals while providing reliable energy for millions, the state must commit to an unprecedented degree of renewable power and transmission line development.

The challenge is highlighted by the Draft 2022-2023 Transmission Plan (Draft Transmission Plan) published on April 3, 2023, by the California Independent System Operator (CAISO), the independent energy grid operator that serves approximately 80% of California and a small part of Nevada. As of 2018, California had about 80 gigawatts (GW) of total electric generating capacity.[2] CAISO predicts that California will need to almost double that total capacity in the next decade with new renewable generation and greatly expand the transmission grid in order to achieve clean power targets and vast electrification programs as California attempts to phase out fossil fuel usage. This scale of infrastructure buildout will require unprecedented investments, vastly expedited environmental permitting and review by regulatory agencies, and sustained political will to substantially incentivize and streamline priority projects.

This blog post examines the ambitious roadmap outlined in the Draft Transmission Plan, and CAISO’s long-term transmission planning more broadly, to advance California’s climate goals by undertaking 46 transmission projects and adding at least 40 GW, mostly from renewable sources, to the CAISO grid over the next 10 years.

The proposals form part of the Green Deal Industrial Plan and aim to scale up technology and materials for the energy transition.

By Paul A. Davies, Beatrice Lo, JP Sweny, Alexander Buckeridge-Hocking, Michael D. Green, and James Bee

On 16 March 2023, the European Commission (Commission) formally proposed two legislative initiatives and announced the development of a European Hydrogen Bank as part of its program to enhance the EU’s competitiveness in green technologies and support its transition towards net zero greenhouse gas emissions by 2050.

A new proposal aims to streamline the process for permitting and developing offshore renewable energy projects and reduce costs to developers.

By Janice Schneider, Nikki Buffa, Nathaniel Glynn, and Brian McCall

On January 30, 2023, the Bureau of Ocean Energy Management (BOEM) published a new proposed rule to update the agency’s regulations governing renewable energy development on the Outer Continental Shelf (OCS).[1] The proposed rule is the first major overhaul of BOEM’s offshore renewable energy regulations since they were promulgated, and seeks to benefit from the agency’s and industry’s experience since 2009. Since then, BOEM has conducted 11 offshore wind energy lease sales and currently is managing 27 active commercial leases.

The proposed regulations would “modernize regulations, streamline overly complex and burdensome processes, clarify ambiguous provisions and enhance compliance provisions in order to decrease costs and uncertainty associated with the deployment of offshore wind facilities,” and would save developers an estimated $1 billion over a 20-year period.[2] Regulatory changes to decrease costs and increase certainty for developers are particularly critical when offshore wind energy developers are facing ever-increasing installation and materials costs. Some developers are even seeking to renegotiate power purchase agreements for their contracts that account for increased development costs. Comments on the proposed rule are due by March 31, 2023.

The Plan aims to “simplify, accelerate and align incentives to preserve the competitiveness and attractiveness of the EU as an investment location for the net-zero industry”[1].

By Paul A. DaviesMichael D. Green, and James Bee

On 1 February 2023, the European Commission (Commission) presented a proposal for a Green Deal Industrial Plan for the Net-Zero Age (the Plan). The Plan forms part of the European Green Deal adopted in 2019, which sets out the EU’s green transition ambitions and climate targets towards reaching net zero by 2050. The Plan sits alongside other Green Deal initiatives, including the “Fit for 55” package of policies (which seek to reduce greenhouse gas emissions by 55% from 1990 levels by 2030), as well as REPowerEU (introduced to reduce reliance on imported fossil fuels and provide clean and affordable energy).

The Plan is designed to support the scaling up of the EU’s net zero manufacturing capacities and installation of sustainable products and energy supplies, whilst also enhancing the competitiveness of Europe’s net zero industry. This Plan is particularly relevant in light of the US Inflation Reduction Act in the US, which aims to mobilise over $360 billion by 2032[2], and recent concerns in relation to energy security and energy prices in the EU.

California’s first upcoming offshore wind lease sale, scheduled for December 6, 2022, is the next major step forward for clean energy in the Golden State.

By Nikki Buffa, Jennifer K. Roy, Janice M. Schneider, Daniel P. Brunton, Nathaniel Glynn, and Brian McCall

The Bureau of Ocean Energy Management (BOEM) and the State of California have taken significant steps to advance offshore wind development in the lead-up to BOEM’s upcoming auction for the first renewable energy lease sale in federal waters offshore California. The BOEM lease sale will involve a number of new facets not seen in other recent lease sales in New York and North Carolina, including revised bidding credits and lease stipulations. In anticipation of the lease sale, California is developing a permitting roadmap to streamline the state approvals process for any resulting offshore wind projects.

On the federal side, the Biden Administration is deploying significant resources and funding to boost development of floating offshore wind technologies that will be essential off the Pacific Coast. While BOEM’s upcoming lease sale and California’s actions to support offshore wind development represent an important moment for the offshore wind industry, many challenges remain to capture the full resource potential off California’s coast.

Making Europe greener, fairer, and more sustainable is at the heart of the European Commission’s new work programme.

By Paul Davies, David Little, Michael D. Green, and Pierre Bichet

On 19 October 2020, the European Commission (Commission) published its Work Programme (Programme) for 2021. The Programme — “A Union of vitality in a world of fragility” — provides an overview of the Commission’s legislative priorities for the upcoming year and a timeline on when legislative initiatives will likely be published.

The initiatives for 2021 have been revised to support the economic recovery given the COVID-19 pandemic. The Programme makes clear that the recovery should be both green and sustainable.

The Commission’s 2030 Climate Target Plan sets out required actions for a number of sectors.

By Paul A. Davies and Michael D. Green

On 17 September 2020, the European Commission (Commission) presented its 2030 Climate Target Plan, which calls for a greenhouse gas (GHG) emissions reduction target of at least 55%, compared to 1990 levels; sets out required actions for a number of sectors; and identifies key changes to be made to existing legislation.

To announce the 2030 Climate Target Plan, the Commission released a Communication, a synopsis report that analyses responses to previous consultations, and an impact plan.