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Wind & Solar
Competitive Leasing Program

Public Lands for Wind and Solar

January 16, 2017

wind and solarThe New US Competitive Leasing Program

Wind and solar power companies may be seeing an end to extensive subsidy programs. However, that doesn’t mean they will lose all government support. A new rule at the Bureau of Land Management has bolstered and reinvigorated a program. The programs allow companies to lease federal lands in an effort to fulfill the goals of the Climate Action Plan.

The plan calls for 20,000 megawatts of renewable power to be produced on public lands by 2020. The Department of Interior has been hard at work since 2009. Since then, 60 utility-scale renewable energy projects have been approved for construction. Reports indicate that this alone could generate over 15,000 megawatts of energy. With four years to go, the Interior is moving full speed ahead. This new rule should help solidify their progress.

“This new rule not only provides a strong foundation for the future of energy development on America’s public lands but is an important and exciting milestone in our ongoing efforts to tap the vast solar and wind energy resources across the country,” said Secretary of the Interior Sally Jewell. “Through a landscape-level approach, we are facilitating responsible renewable energy development in the right places, creating jobs and cutting carbon pollution for the benefit of all Americans.”

Changes to the Leasing Policy

One of the main changes to the current leasing policy includes alternations to how rents are calculated. Rents used to be calculated by using outdated data from a 2000 land and power survey. Now rents will be calculated based on land surveys and valuation of power pricing over a five year period. The new rule also allows for adjustments to be phased in. Adjustments can either be in alignment with shifting market values or at pre-determined scheduled and fixed adjustments. The overall impact of this shifting policy is lower rents and fees for solar projects. However, rates will increase for wind projects. As a net calculation, renewable energy projects will pay $19 million dollars less in rent and fees each year.

In addition to changing the payment schemes of rents and fees, this new rule offers incentives for companies to lease in areas with fewer resource conflicts. This also allows the Bureau to offer lands outside of designated leasing areas. Lands identified as prime renewable energy real estate includes roughly 700,000 acres in Arizona, Colorado, California, Nevada, New Mexico, and Utah. The Bureau anticipates that most projects will remain in these general areas, despite their newfound ability to offer leases elsewhere.

Application Process

The application process will also see some refinement under the new regime. The Bureau has greater discretion in streamlining the application process. For example, what was once two required pre-submission preliminary meetings has been replaced by two post-submission preliminary meetings and one public meeting. The Bureau can waive both non-public meetings. Rules for governing the prioritization of applications have also been adjusted.

Before this rule, competitive bidding processes were only available if and when applicants submitted applications for the same area. Now, the Bureau can initiate competitive bidding processes. Within designated leasing areas, the lease will be awarded to the highest bidder. Outside of these areas, the highest bidder will attain preferential status.

wind and solarThoughts from Industry Groups

The new rule is not universally loved. US News reports that industry groups are wary of the change, arguing that the system works as it is and that adjustments may “increase uncertainty and costs.” Assessment of the specific changes enacted, however, indicate that increased certainty is a key element of the new rule. With companies able to schedule prearranged rent and fee adjustments that are not necessarily market-based, there will be no surprise changes in annual costs.

Environmentalist groups welcome the rule because the areas designated low in resource conflict, and incentivized for renewable energy usage, are those that avoid environmental and cultural sites.

The Wilderness Society, for example, released a glowing appraisal: “This important guidance will facilitate responsible solar and wind energy development on public lands. By prioritizing development in designated low-conflict areas, the Wind and Solar Leasing Rule is expected to make the permitting process more efficient in appropriate areas while protecting wildlands and wildlife habitat from development.

It will put renewable energy on the same playing field as fossil fuels by implementing a competitive leasing process, assuring taxpayers fair compensation. It has been released after several years of planning, public input, and review.”

The process of creating this new rule included 36 comment letters and feedback from stakeholder’s engagement meetings. The final rule documentation and an accompanying fact sheet can be accessed on the Bureau of Land Management’s website.

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