Letter in Support of the Energy Permitting Reform Act of 2024

Dear Chair Manchin and Ranking Member Barrasso,

On behalf of the Information Technology and Innovation Foundation (ITIF), I write in support of the Energy Permitting Reform Act of 2024 (EPRA). This bipartisan effort is a welcome development to use government policy not to force change, but to enable change, through the widespread development of the clean energy technologies we need to drive costs down to meet the price and the performance levels of dirty energy.^[1]

Building New Tech in the Field Can Drive Down Prices and Improve Performance

Permitting reform is all about reducing the hurdles and bottlenecks that keep projects from reaching fruition.^[2] Current permitting issues affect all types of projects, although they especially negatively impact new innovative clean energy technologies like hydrogen, carbon capture and storage, long-duration energy batteries, and small modular reactors. This is because these projects require new technology and infrastructure and have fewer successful past projects to point to and learn from in the permitting process.

Big spending bills like the Infrastructure Investment and Jobs Act and the Inflation Reduction Act have a limited funding window, anywhere from five to ten years of federal support. If those new clean energy projects are held up by byzantine permitting processes, then the United States will have missed the opportunity to deploy, learn from, and improve the technologies that are necessary to reduce emissions.

Permitting reform must focus on reducing the hurdles to deploying technologies in the field in a reasonable time, rather than just making it easier to build older-technology projects. Clean alternatives, even with generous federal subsidies, are largely more expensive than incumbent technologies. One way to drive down costs for these alternatives is to speed up deployment to gain valuable data, build products and market demand, and increase learning-by-doing. Federal and private investment in RD&D is crucial and so are federal regulations and subsidies for new technologies. But nothing beats the power of the market in testing the mettle of new technologies.

Grid Policy Needs to be More Than Permitting Reform for Poles, Wires, and Plants

The energy grid of the 20th century connected large, centralized power plants to tens of thousands of users in a monodirectional fashion. The grid of the 21st century needs to connect hundreds of thousands of various sizes and types of power sources with millions of load centers including homes, electric vehicles and buses, industrial heating and hydrogen facilities, and energy storage, all in a multidirectional fashion. These resources need to be able to communicate in real-time; shift demand and supply in accordance with weather patterns; and be safe, secure, reliable, resilient, and flexible as more of the economy becomes dependent on electricity as a primary energy source.

Historically, the discussion in Congress has focused on speeding permitting for physical energy infrastructure and neglected the potential of digital energy technologies to enhance reliability. Traditional energy infrastructure faces steep federal and state permitting hurdles in the form of procedural environmental reviews and siting issues. Digital energy technologies face unique regulatory hurdles beyond just procedural burdens, such as a burdensome regulatory structure that treats many digital energy solutions providers like traditional utilities, a lack of coordination among regional grids, and different industry standards and protocols for digital technologies that communicate across the grid. A failure to address regulatory burdens to digital energy technologies leads to a missed opportunity to think beyond the 20th-century notion of what the electric grid can look like.

Clean energy and climate innovation to make products and services cheaper, cleaner, and better requires policy support to continue through the early phases of deployment, while private investment ramps up and ultimately takes over entirely.^[3] Hydrogen, carbon capture and storage, advanced nuclear, and next-generation renewables like floating wind-turbines are among technologies where the feedback between deployment and innovation to drive down costs will be vital. Today, a major hurdle to getting many of these projects built is not technology, financing, or cost uncertainty, but regulatory and permitting hurdles that can delay projects for years or scuttle them entirely.

ITIF has long called for national permitting reform and this bill is a step in the right direction. We applaud the Committee's efforts and look forward to this bill advancing to the Senate and House.

Sincerely,

Robert D. Atkinson

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