The global energy system is facing a polycrisis. Consecutive and escalating geopolitical crises have thrown the world’s oil and gas markets into turmoil, the artificial intelligence boom is placing unprecedented stress on power grids and threatens to drive a major energy supply deficit in the near future, and all of this is taking place against the backdrop of dangerous heat waves, underscoring the cost of our energy system and the urgency of the global clean energy transition. So what is standing in the way of decarbonization?
The answer, at least in part, is that the global clean energy transition is being strangled by red tape. Even more than access to the necessary capital and resources to build out clean energy infrastructure (which are, indeed, massive hurdles in and of themselves), permitting processes are the biggest roadblock standing in the way of clean energy expansion.
Byzantine permitting processes are choking clean energy innovation and expansion in Australia, Canada, Germany, and the United Kingdom, but nowhere is experiencing bigger bureaucratic bottlenecks than the United States, according to experts at JP Morgan as reported in an exclusive from Semafor. The result of the country’s long permitting timelines, antagonistic political environment, and complex overlapping state- and federal-level policies is “generation capacity not coming online, grid upgrades not being delivered, and industrial facilities not being built,” the JP Morgan op-ed reports. “All of these inefficiencies show up as higher costs, tighter supply, and reduced resilience when needs are skyrocketing.”
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A recent report from Wood Mackenzie corroborates these statements, finding that the Trump administration’s anti-renewable policies have put over $121 billion of investment dollars at risk, with stalled permits for renewable energy projects slowing the development of much-needed wind, solar and storage capacity.
When it comes to adding energy production capacity, there is no time to waste. Power demand from data centers is expected to double by just 2027 to reach a whopping 66 gigawatts in the United States alone. And yet, the Trump administration is slowing and even using taxpayer dollars to kill clean energy projects that are already in the pipeline. Last year, the Department of the Interior introduced a directive requiring the approval of senior officials at every stage of renewable energy permitting, even though experts have been saying for years that we need less, not more, red tape in the domestic renewables sector.
Renewable projects already faced an incredibly complex permitting process in the United States before this policy shift, which has only made a bad situation worse. “The majority of renewable energy projects are built on private lands, but developers often require federal permits because of the proximity to wetlands, sensitive wildlife habitats, or tribal lands,” Latitude Media explains. “Many different agencies can get involved in the process, depending on the technology and location of a project. They include DOI’s Fish & Wildlife Service, Bureau of Land Management and Bureau of Indian Affairs, as well as the Army Corps of Engineers.” Essentially, there are too many cooks in the kitchen, and it’s getting hotter.
The Wood Mackenzie report finds that about 32% of the U.S. early-stage renewable pipeline is now subject to additional federal scrutiny. That amounts to about 92 gigawatts of clean energy, or about enough to power 69 million homes, that now face long wait times to connect to the grid at a time when buildout has never been more urgent.
“Permitting remains one of the most critical barriers to advancing new projects, and without more coordinated and predictable processes, delays and uncertainty will continue to weigh on development timelines and investment decisions,” Gaby Ackermann Logan, a research associate at Wood Mackenzie, was recently quoted by Reuters.
While the policy environment is much more supportive for renewable energies in Europe, red tape remains a major issue across the Atlantic as well. Europe is facing its third critical heat wave this summer and its third energy crisis in four years. A massive scale-up of local clean energy infrastructure is paramount for the bloc’s energy security, but progress has been slow-going.
“Permitting is one of the silver bullets of the energy transition,” said SolarPower Europe’s Jonathan Bonadio. “When we get the paperwork and bureaucratic procedures right, solar and renewables will have a true fighting chance.”
By Haley Zaremba for Oilprice.com
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