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The energy landscape is evolving – we want clean, affordable, and reliable power. However, the United States’ complex patchwork of siting and permitting policies is proving to be a challenge, with extended timeframes for interconnection that can lead to delays or cancellations of clean energy and battery storage projects. 

In a Q&A session with Enel North America’s energy policy experts, Mona Tierney-Lloyd and Kyle Davis, learn about Enel’s efforts to advocate for unified state and federal actions. We’ll discuss the necessity for permitting and interconnection reform, which is vital to achieve the nation’s clean energy goals, advance crucial infrastructure, and embrace emerging technologies.

Mona Tierney-Lloyd is Head, Policy & Regulatory Affairs, Central/West Regions at Enel North America. In her role, she has been a successful energy policy advocate in regulatory and legislative arenas. She has 30 years of energy experience in shaping wholesale and retail market opportunities for utilities, retail suppliers, and distributed energy resources across the United States.

Kyle Davis is Head, Federal Policy and Eastern Region (USA & Canada) at Enel North America. In his role, he provides strategic leadership to the company’s North American business development efforts, focused primarily on trade, RD&D and commercialization policies benefitting renewable energy, energy storage, demand response, micro grids, and electric vehicles. He has over thirty years’ experience in the clean energy and sustainable transportation industries.

Thanks to funding and incentives from the 2021 Bipartisan Infrastructure Law and 2022 Inflation Reduction Act, substantial investments in renewable energy and storage are taking place. Could you share the current capacity of the projects seeking interconnection?

Mona: We’re looking at approximately 2,000 GW of projects in total across the industry that are seeking interconnection, spanning renewable energy and battery storage initiatives.

Can you provide insight into the timeline for project approval in this interconnection process?

Kyle: First, what has changed? How did we get to where we are today? Today’s electric grid was built around large, centralized power plants sited primarily in rural areas and delivering electricity to urban communities. Historically, utilities would receive only a handful of interconnection requests each year, usually for large, thermal power plants. However, in the last decade or so, interconnection requests have skyrocketed, with hundreds made for decentralized, large-scale wind, solar and battery storage projects, as well as smaller distributed energy resources. 

Today wind, solar and battery storage projects face a lengthy approval period ranging from 5 to 7 years. The slow pace of processing often compels developers to submit projects into interconnection queues, even if projects are speculative, merely to secure a spot in the queue. That has a domino effect on other projects in the event a speculative project withdraws from the queue, prompting what are known as “restudies” to subsequent projects that add cost and delay. Also, the longer it takes to bring this new, cleaner, and lower-cost generation onto the grid, the longer it means older, more polluting, and expensive resources must stay connected to keep the lights on.

What steps have been taken to address these interconnection challenges?

Kyle: In response to this high volume of interconnection applications, the Federal Energy Regulatory Commission (FERC) introduced new measures to increase information sharing earlier in the process, streamline and standardize the interconnection queue reviews, and enact financial penalties for late studies. 

The traditional study process, which occurred sequentially with new projects, now favors a cluster studies process, which avoids restudies when projects drop out of the queue. Application process changes include a new requirement that applicants demonstrate land control for proposed projects. Higher security deposits are also now required at different steps during the study process. Both of these changes are meant to discourage speculative projects, which clog the queues. While this marks a positive initial move, ongoing monitoring is necessary to ensure effective implementation.

What are the potential opportunities to overcome these challenges and bolster clean energy deployment?

Kyle: Local, state, and federal siting and permitting reform and robust regional and interregional transmission expansion are crucial. Without sensible siting and permitting reforms and adequate transmission planning and new investment, the U.S. will fall short by 100 GW in terms of the potential clean energy impact set by the Inflation Reduction Act. Echoing a phrase made popular by my friend and colleague, Rob Gramlich, “there is no energy transition without transmission.” We need additional regulatory and legislative action. 

Can you elaborate on the necessary changes in the permitting process?

Kyle: The current siting and permitting system in the U.S. poses a significant barrier to the future development and deployment of domestic clean energy. Coordinated efforts at state, federal and tribal agencies are essential for the timely rollout of clean, affordable, and reliable power. Process improvements should strike a balance between timely project decisions and comprehensive environmental reviews. 

For federal permits, examples include:

• A presumptive time limit of 2 years for completing environmental impact statements
• The use of programmatic reviews, categorical exclusions, and information from previous reviews
• Designating a single lead federal agency to coordinate multiple agency reviews

Some of these reforms were implemented in this year’s debt ceiling deal – known as the Fiscal Responsibility Act of 2023 – but more work is needed.

How does transmission expansion play into this scenario?

Kyle: Transmission reform is crucial. To meet our climate goals, we need new transmission investment urgently. Its absence means fewer wind, solar and battery storage projects are connected to the grid, which could result in 80% of the Inflation Reduction Act’s expected emissions benefits being lost. 

There is some good news. The Bipartisan Infrastructure Law included new federal grant funding managed by the U.S. Department of Energy that seeks to accelerate transmission siting and permitting reviews undertaken by state, local and tribal agencies. There’s also funding and work underway by the national labs meant to assist with regional and interregional transmission planning. This new federal funding is only now making its way to grant applicants, so it’s too early to say whether it spurs new transmission investment, but it’s a start.

What specific actions are required for successful transmission expansion?

Kyle: Several actions are needed to ensure effective transmission expansion:

• FERC action: FERC should continue its work after its recent interconnection queue reforms by finalizing its transmission planning rule and continue working toward finalizing its transmission-related cost allocation reforms. 
• Federal tax credit: A federal investment tax credit is critical to incentivize investment in long-distance transmission, particularly inter-regional transmission lines, and lessen inevitable cost allocation debates. 
• Backstop siting authority: Currently, transmission lines can take upwards of a decade to permit, which is far too long. The establishment of FERC backstop siting authority for certain transmission lines is essential to breaking interstate coordination barriers.
• Minimum interregional transfer capacity: Mandating that regions have the physical capability to share electricity with neighbors lowers consumers’ electricity costs, while also helping to keep the lights on during weather events. Interregional transmission allows the grid to take advantage of daily and seasonal production differences amongst the regions, which means greater usage and less curtailment of wind and solar electricity.

Let’s take it down to the state and local level. Can you shed light on the challenges arising from the current state of local siting authorities?

Mona: Absolutely. In the United States, we’re dealing with a complex array of siting and permitting regulations that vary across different municipal, county, state, tribal, and federal jurisdictions. This diversity often leads to delays, increased costs and, in some instances, project cancellations. These hurdles can stem from unclear or uncertain local approval processes, which means some processes are very opaque in terms of timelines, costs, or criteria for approving, or rejecting, a proposed project. In some cases, rejection may lack a factual foundation. We have seen an increase in well-organized and well-funded local opposition to proposed projects. We’re observing instances where changes proposed by county commissions and planning boards become effective moratoria, without the clear assent of the community, in some instances, thereby overriding landowner rights.

How do you envision the role of states in addressing these issues, and what significance does standardization hold?

Mona: Enel always tries to establish a positive local presence in the communities where we would like to develop a project, including the local authorities. However, we think that states play an important role in providing a consistent and clear vision for land use, economic vitality, and a strong and diverse electricity system, in cooperation with the local authorities. Renewable energy projects can meet all of those needs and be developed in a responsible and collaborative manner with the local community.  

However, we need to know the rules of the road. We need to know how long a review is going to take and what the criteria for review will be. Transparency is vital to being able to bring projects online in a reasonable timeframe. These renewable projects infuse revenues into rural areas with limited economic growth opportunities, benefiting both the local economy and the landowners. For instance, Enel North America’s clean power projects in the U.S. have generated over $188 million in lease payments to landowners and over $89 million in new property tax revenue since 2016. We think that a standardized, statewide-siting process makes a lot of sense for the community, the landowners, and the developers.

Can you elaborate on the lessons learned from community engagement and its impact on project success?

Mona: Of course. It’s evident that maintaining a positive community presence directly correlates with project success. To achieve this, we work very closely with our local communities: county commissioners, planning and zoning departments, landowners, schools, hospitals, etc. Engaging with civic leaders and community members early in the process is essential. Their feedback guides project adaptations. Having a clear understanding with communities about new tax revenues and other local investment ensures they tangibly benefit from the power generated by the projects.  

Could you provide a specific example that exemplifies these principles in action?

Mona: Absolutely. Enel’s Diamond Vista wind farm in Kansas serves as a prime example of a renewable energy project rooted in strong community relationships. Initially met with concerns from local officials, Enel took the initiative to engage with civic leaders, community groups, and residents, actively listening to their needs and inquiries. Together, Enel and the community formed a long-term partnership based on mutual understanding. This level of community engagement serves as a blueprint for future development. 

What were the outcomes of this community-centered approach?

Mona: The results are remarkable. Diamond Vista involved around 450 construction workers, injecting $5.5 million into local spending during construction. The project provides steady income for landowners, contributing to the preservation of family farms in the face of fluctuating commodity prices and weather challenges. The wind farm created 13 permanent, full-time jobs lasting over 25 years. PILOT (payment in lieu of taxes) agreements generated approximately $4.5 million in local revenues over the first decade, offering significant support to schools and local services. Enel’s Creating Shared Value (CSV) approach is funding local programs such as reinstating a grocery store, library renovations, firefighter equipment upgrades, and student scholarships for STEM-focused higher education.

In a nutshell, what are the main takeaways?

Kyle: We require comprehensive, not incremental, change in order to meet clean energy targets in the U.S. There is no transition without transmission. The scope and speed of new grid infrastructure construction need to be unprecedented. It’s pivotal to tackle permitting challenges, promote transmission expansion, and collaborate effectively to pave the way for a cleaner, more reliable energy system.

Mona: Speaking more locally, states have an important role to play, but we need standardization and a more streamlined, transparent, responsive permitting process. We also need to work side-by-side with local communities and forge long-term benefit agreements. The success Enel has witnessed with our projects underscores the importance of building robust relationships. In the examples we discussed, these relationships guided effective allocation of funds and ultimately enabled Enel to secure the crucial local permit required for project construction.