JANUARY 17, 2019 GTM
Clean energy has had it relatively easy during the federal government shutdown. Photo Credit: Shutterstock.com
Effects of the longest federal government shutdown in U.S. history, now on its 27th day, are wide-reaching: Federal workers are missing pay, the Food and Drug Administration is only inspecting “high-risk” food and drug facilities, economic growth is at risk, and over 40,000 immigration hearings have been canceled.
Comparatively, the impact on clean energy projects has been minimal. The long development pipeline for these utility-scale projects on federal lands — ranging from nine months to two years, according to Wood Mackenzie Power & Renewables Senior Solar Analyst Colin Smith — means that, though some activities may be stalled, the impact has so far been minimal. That could change depending on how long the shutdown continues.
“Unless your project was at an inflection point where government action was needed…it’s not really slowing anything down yet,” said Sarah Fitts, a corporate and transactional lawyer at Schiff Hardin who focuses on energy and infrastructure. “For now, what I see is people are just reordering [how] they do things.”
Greentech Media has already covered how the shutdown has impacted offshore wind due to halted activities at the Bureau of Ocean Energy Management. But for federal land onshore, the Department of the Interior’s Bureau of Land Management guides development of wind and solar projects. As of March 2018, the agency said it had approved 25 solar projects totaling 6,319 gigawatts and 35 wind projects totaling 3,284 megawatts.
According to a BLM spokesperson reached this week, solar and wind work are treated as exempted activities under the agency’s shutdown plan. That plan notes that “exempt employees whose salaries are paid from permanent appropriations (receipts) and unobligated balances from prior years will continue to work as directed by their supervisors and subject to the continued availability of funds.”
That means that as long as the agency has money from outside the budget cycle, it can continue those functions. The agency did not clarify whether solar and wind permitting has actually continued, but its project database doesn’t show any rights-of-way permits granted in recent weeks.
“At this stage of the permitting process, we should be working with the BLM and other stakeholders in the preparation of an environmental impact report/environmental assessment,” said spokesperson Paul Copleman in an email. “We’re still busy working to permit the project, and we look forward to the BLM rejoining the process.”
While there are projects in line that are hundreds of megawatts in capacity, Smith at WoodMac noted that’s a relatively small chunk of the entire U.S. utility-scale pipeline. In contrast to other recent threats, like market uncertainty tied to solar tariffs, he said the shutdown impact is small.
“If you compare it to module tariffs, that was something where there was uncertainty and delay that affected the economics of the entire pipeline, and that was from April 2017 to January 2018,” Smith said. “Even then, the market has been OK.”Experts said that if the shutdown continues to drag on, it could tighten timelines or delay projects down the line.
She added that, even when the shutdown ends, the backlog it’s created is likely to cascade of delays. “It’s a big mess,” she said. “And it’s unnecessary.”