Today we highlight the Quadrennial Energy Review’s (“QER”) focus on grid modernization through increased renewable generation and its identification of opportunities to improve development, project financing, access, and the siting process. Part I of our series focused on “infrastructure challenges,” namely transmission and distribution and storage.

Renewable Generation Development

QER 1.2 dedicates significant analysis to renewable generation based on Federal environmental objectives. To encourage the deployment of clean energy generation, it recommends that Federal agencies, namely the DOE and the Department of the Treasury, coordinate to identify practices that support system evolution to a cleaner grid. QER 1.2 suggests that these Federal agencies consider state-level policies, mechanisms, and financial incentives. QER 1.2 recognizes that large-scale, centralized nuclear generation faces economic and regulatory challenges. It recommends an increase in funding for the DOE’s life-extension R&D nuclear program to ensure maximum benefits from existing nuclear generation. It also calls for the Nuclear Regulatory Commission (“NRC”) to increase licensing support for advanced nuclear technology.

Large-scale hydropower projects also face economic and regulatory challenges stemming from environmental regulations, so QER 1.2 recommends the development of environmental mitigation technologies for new and existing hydropower to prevent project delay due to environmental impacts. QER 1.2 further recommends that the DOE, the Army Corps of Engineers, and the Bureau of Reclamation convene with stakeholders to discuss opportunities to improve existing Federal hydropower. QER 1.2 specifically identifies the following hydropower topics: (i) technology upgrades; (ii) increasing generation, capacity, and essential reliability service capabilities; (iii) operations and maintenance efficiency; (iv) acquisition improvements; (v) funding flexibility; (vi) and mitigating impacts from hydropower.

Financing and Access

QER 1.2 recommends that the DOE and the Department of the Treasury standardize contracts/financing structures for non-traditional clean energy project structures. It also recommends extension of the Federal government’s power purchasing authority from 10 to 20 years. QER 1.2 advocates for expanded access to renewable generation. It recommends strengthening incentives for public housing authorities to invest in renewable energy, and encourages public-private partnerships to underwrite and support clean energy access for low and moderate-income households. QER 1.2 calls for the Federal government to increase support for grants and technical assistance for isolated rural, island, and tribal communities to transition away from expensive diesel-generated electricity to towards renewable energy. For example, QER 1.2 recommends that Congress enable the USDA to administer renewable energy financing under the Rural Electrification Act, Section 317(c).

Siting

QER 1.2 identifies variance in land use requirements between different types of power generation due to diverse operational requirements. It recommends that the DOE and DOI initiate technical workshops on generation-siting best practices. The DOE envisions that these workshops will draw on state and local expertise to create tools for developers and regulators to streamline the environmental impact analysis process.