The North American Electric Reliability Corporation (“NERC”) is developing an expansion of its registration requirements to include certain owners and operators of inverter-based resources by creating a new registered entity function, called the “GO-IBR.”
Renewable Energy
Increased Sustainability in Healthcare through a Transition to Renewable Energy
As healthcare systems continue their bid to “first, do no harm,” more attention is being placed on the organizations’ broader impact on their communities, including the environment and air quality. It is estimated that the global health care industry is responsible for two gigatons of carbon dioxide each year, or 4.4% of worldwide net emissions. And according to a September 2019 report by Health Care Without Harm, over half of the industry’s emissions (representing an estimated 2.2% of the worldwide net emissions) can be attributed to the health care industry’s use of energy. The energy-intensive nature of the industry correlates with the often 24/7 use of health care facilities and the high-tech, life-saving equipment.
The Debt Ceiling Standoff and NEPA: New Changes to the NEPA Review Process
An increased borrowing limit for the U.S. was not the only change brought about by the recently enacted Fiscal Responsibility Act of 2023. The National Environmental Policy Act (NEPA) review process was also on the minds of our legislators. Indeed, Congress chose to use the debt ceiling fight as a vehicle for implementing several changes to NEPA aimed at improving project authorization and management and establishing timelines for completing the review process. While not all the changes in the so-called Builder Act are dramatic, a handful of them could provide additional certainty for those in the oil and gas and renewables industries seeking federal approval for their projects.
Everywhere a Sign: Remote Notarization in Renewable Energy Projects
The renewable energy industry is growing rapidly but it faces several challenges, including ever-increasing competition amongst developers for rights to the same land. This creates a race between developers to encumber project land.
Negotiating and executing a lease is normally more time-consuming than recording it, but recording the lease agreement (or other applicable real estate instrument) is not a step that should be overlooked or delayed. A lease is effectively meaningless to anyone not a party to it until it has been recorded in the public records of the county in which the leased property is located. Once the lease, or evidence of the lease, has been recorded, everyone not a party to it is put on notice and any agreement encumbering the leased land after that date is typically subordinate to the lease.
IRS Releases Guidance on Domestic Content Bonus Credit Amounts
On May 12, 2023, in Notice 2023-38 (the “Notice”), the IRS published rules intended for inclusion in forthcoming regulations regarding domestic content bonus credit amounts.
The Inflation Reduction Act of 2022 amended §§ 45 and 48 of the Internal Revenue Code (the “Code”) to provide a domestic content bonus credit amount for certain qualified facilities or energy projects placed in service after December 31, 2022, and added new Code §§ 45Y and 48E, which include a domestic content bonus credit amount for certain investments in qualified facilities or energy storage technologies placed in service after December 31, 2023.
To claim a domestic content bonus credit amount, a taxpayer must establish that the “Domestic Content Requirement” is satisfied with respect to an “Applicable Project” by certifying to the Secretary of the Treasury that any steel, iron, or manufactured product which is a component of the Applicable Project (upon completion of construction) was produced in the United States. The Notice provides guidance on what is required to meet the Domestic Content Requirement and the procedures for reporting and claiming domestic content bonus credit amounts.
Buyer Beware: Environmental Attributes Diligence in Biofuel Company Acquisitions
Like any acquisition, the purchase of a biofuels company should involve substantial due diligence so the buyer can best determine the value of the target’s assets and liabilities, assess the risks associated with its business operations, and identify areas that may require further investigation.
With a Push for Green, It Can Pay to Be Brown: Qualifying for the Inflation Reduction Act’s Brownfields Incentives and the Remaining Uncertainty
Thanks to the Inflation Reduction Act (IRA), which went into effect in January, it can pay to be a brownfield – a term used to refer to a property that is affected by potential or confirmed contamination. Specifically, the IRA offers incentives to renewable energy development that takes place on a brownfield site, which is included as an “energy community” under the IRA. On April 4, 2023, the Internal Revenue Service (IRS) and the Department of Treasury published limited guidance (Notice 2023-29, Energy Community Bonus Credit Amounts under the Inflation Reduction Act of 2022) on the bonuses available for production and investment of energy facilities in energy communities. Unfortunately, even with the guidance, the eligibility of certain sites as brownfields remains uncertain.
PUCT Adoption of Changes to Market Participant Qualifications and Reporting Requirements
In a rulemaking issued April 6, 2023, the Public Utility Commission of Texas (“Commission”) adopted amendments to market participant registration and certification requirements.[1] The Commission’s rule amendments significantly change qualification and reporting requirements for Retail Electric Providers (“REP”), Power Generation Companies (“PGC”), Self-Generators, and Power Marketers. This article outlines the most significant of these…
New State Laws Take Aim at Renewable Energy Siting NIMBYism
The siting of renewable energy infrastructure remains a contentious issue in some communities. Throughout the United States — both on the coasts and in the Midwest — new renewable energy development pits unlikely advocates against unlikely opposition. That said, more and more State governments that are looking to grow their renewable energy industries and meet climate goals are implementing legislative solutions to these renewable energy siting issues.
DOE Investing $47 Million in Clean Hydrogen Technology
On January 27, 2023, the U.S. Department of Energy (DOE) announced its intent to invest up to $47 million in funding for clean hydrogen research, development, and demonstration (RD&D) as part of its “Hydrogen Shot” – a program intended to reduce the cost of clean hydrogen to $1 per kilogram in the coming decade by reducing costs and improving the performance of hydrogen fuel cells. Hydrogen Shot is also part of the Biden administration’s strategy to decarbonize the electric grid entirely by 2035 and to reach net-zero emissions by 2050.