Update: Latin America Renewable Energy Calls for Public Bids

By Erick Hernández Gallego on Posted in Energy, Featured, GT Alert, Latin America, Renewables

Read in Spanish/Leer en Espanol.

Please find below an update of relevant considerations regarding Calls for Public Bids in Renewable energy matters in Latin America (see prior related GT Alerts here).

Colombia

On Sept. 29, 2020, President Iván Duque Martínez held the official presentation ceremony of companies Afinia and Air-e as two new electric power operators in the Caribbean region.

On Nov. 25, 2020, the Mayor’s Office of Bogotá declared Public Tenders No. TMSA-LP-03-2020 and TMSA-LP-04-2020 partially void. The purpose of these tenders is to award concession contracts for the exploitation of the public service of electric terrestrial, automotive, urban, mass passenger transport of the Integrated Public Transport System.

On Dec. 16, 2020, the Vice Minister of Energy of Colombia, Miguel Lotero, announced the dates of the award schedule for the new renewable energy call for bid for 2021. The auction rules will be announced in June 2021, and the awarding date will be in October 2021. This call for bids will benefit users who are not yet connected to the National Interconnected System.

Transcaribe, the company in charge of the transportation system in Cartagena, is considering the incorporation of electric units. A call for bids is expected the coming months.

Argentina

Chinese company Goldwind will put five wind farms in Argentina into operation in the next two months.

In December 2020 the Miramar Wind Farm was inaugurated. This power plant with 98.6 MW of installed capacity will generate energy equivalent for the consumption of approximately 29,500 people.

Ecuador

In December 2020, a long-term concession contract was granted to Solarparck for the construction, operation, and maintenance of the photovoltaic solar project El Aromo, which will generate around 340 GWh per year and is expected to begin operations by the end of 2022.

El Aromo will have an installed capacity of 200 MW, and the concession will be granted for a term of 20 years (including the term for the construction).

Consortium Cobra Zero-E was awarded the Villonaco II and III wind project, which will be developed in the province of Loja. This project will have a capacity of 110 MW.

Chile

On Sept. 24, 2020, the Ministry of Energy published in the Official Gazette the Distributed Generation Regulation for self-consumption introducing several improvements to the sector and establishing rules to allow efficient and sustainable development of large-scale projects.

The Regulation allows for the injection of energy with jointly owned equipment for users to coordinate and install a single generation system to benefit from the surplus for it to be deducted from the coordinated users’ bills. The regulation entered into force Nov. 6, 2020.

The German Minister of Economy and Energy, Peter Altmaier, informed in early December that a loan for 8.23 million euros was approved for the green hydrogen project “Haru Oni,” which will be installed in Magallanes.

Taxpayer Certainty and Disaster Tax Relief Act of 2020: Spotlight on the Extensions of Certain Alternative Energy Tax Credits

By Margaret J. Weil, Jeffrey A. Chester and Andrew W. Scher on Posted in COVID-19, Energy, Featured, GT Alert, Renewables, Tax

On Dec. 21, 2020, Congress passed a COVID-19 relief bill (the Consolidated Appropriations Act, 2021), which President Trump signed into law on Dec. 27, 2020. The bill includes the Taxpayer Certainty and Disaster Tax Relief Act of 2020, which provides much-anticipated extensions to critical alternative energy tax credits (including those for wind and solar projects) certain of which were on the brink of expiring.

Continue reading the full GT Alert, “Taxpayer Certainty and Disaster Tax Relief Act of 2020: Spotlight on the Extensions of Certain Alternative Energy Tax Credits.”

Greenberg Traurig Represents BayWa r.e. in Installation of the Company’s Largest Onshore Wind Project to Date

By Greenberg Traurig, LLP on Posted in carbon emissions, Clean energy, Environment, Featured, Renewables

Global law firm Greenberg Traurig, LLP served as lead counsel for BayWa r.e. in the financing, and sale of the 250 MW Amadeus Wind Project, which completed construction and achieved financial close in December. Situated northwest of Abilene in Rotan, Texas, the wind farm is BayWa r.e.’s largest onshore wind project completed to date and “will generate enough clean, renewable energy to meet the electricity needs of more than 74,800 homes annually,” according to a press release issued by BayWa r.e.

Continue reading the full GT Press Release, “Greenberg Traurig Represents BayWa r.e. in Installation of the Company’s Largest Onshore Wind Project to Date.”

Pa.’s Advancement of Waste Reduction and Recycling: Amendments to the SWMA

By Kaitlyn R Maxwell on Posted in Articles, Featured, Pennsylvania, State & Local

Pennsylvanians have called for action on climate change and resource reuse in the commonwealth. Although the commonwealth has delayed action on a number of “zero waste” bills, Pennsylvania recently took action to join other states in supporting waste-to-energy and advanced recycling. On Nov. 25, Gov. Tom Wolf approved House Bill 1808 (now, Act No. 127), which amends Pennsylvania’s Solid Waste Management Act by categorizing “advanced recycling” as manufacturing rather than waste processing or treatment.

Continue reading the full article, “Pa.’s Advancement of Waste Reduction and Recycling: Amendments to the SWMA,” originally published by The Legal Intelligencer on Dec. 17, 2020.

TRANSITION THOUGHTS: The Presidential Transition, NEPA, and Project Review

By David Mandelbaum on Posted in Climate Change, Energy, Environment, Executive Orders, Featured, Federal Regulation, NEPA, Policy

The incoming Biden Administration intends to take many major environmental policy actions aimed at climate change, enforcement, environmental justice, and several other issues, many of which entail reversing actions taken by the Trump Administration. Companies and their environmental managers should monitor and consider participating in this contentious process. GT will be tracking these changes in key areas on our E2 Law Blog in the coming months, with this second topic featuring “The Presidential Transition, NEPA, and Project Review.”

President-Elect Biden has called for immediate attention to climate change mitigation (for example, reducing net emissions of greenhouse gases) and adaptation (for example, location of roads, buildings, and so forth in places less likely to be affected by climate change-induced extreme weather events). He has also expressly emphasized the general need for infrastructure as a vehicle for economic stimulus and increased equity.

The outgoing administration has sought to speed up and to pare down environmental reviews generally, and environmental reviews of certain infrastructure and energy projects specifically. That raises the question whether the new administration will roll back those environmental view rollbacks, or whether it will retain some of the streamlining.

Section 102 of the National Environmental Policy Act (NEPA), 42 U.S.C. 4321, imposes the most familiar requirements for environmental review of projects. A major federal action that might or might not have a significant effect on the environment must typically undergo an environmental assessment (EA) to make that determination. If the project will have a significant environmental effect, then the agency permitting, funding, or undertaking the project must prepare an environmental impact statement (EIS), often on the basis of a report prepared by the project proponent. Agencies can exclude certain categories of projects from the review, but ordinary projects must await an EIS before federal actions can proceed. While NEPA contains no substantive requirement to avoid environmental impacts, the review generally takes the form of comparing the impacts of the proposed action to no impacts, the status quo.

The sort of analysis embeds a weak form of the “precautionary principle,” the rule that one should take no action until one is convinced that the action will be safe. But what if the current condition is itself environmentally risky? In that case, the smallest environmental impact may not arise from doing nothing. Some affirmative actions may be environmentally superior to the status quo, even though they themselves entail environmental impact or risks. To take a timely analogy, there may be a risk of side effects from the coronavirus vaccines, but not taking the vaccine is surely risky and according to the experts much more so. Windfarms, solar arrays, transmission lines, raised highways, rural broadband, electric vehicle charging stations, and on and on cause environmental impacts. But if the new administration wants them quickly, it may want to avoid increasing the burden of environmental impact review on their development.

The Council on Environmental Quality (CEQ) (the White House environmental policy office) adopted new regulations implementing NEPA earlier this year. 85 Fed. Reg. 43,304 (July 16, 2020), amending 40 C.F.R. pts. 1500-1508. Individual agencies then adopt regulations that implement the CEQ rules in the agencies’ specific programs. The CEQ rules impose presumptive page limits on EISs, 40 C.F.R. § 1502.7, and presumptive time limits on their preparation and review – one year for an EA and two years for an EIS, 40 C.F.R. § 1501.10; the median time prior to those rules was, according to CEQ, 3.5 years across all agencies.

The CEQ regulations also impose limitations on the scope of exercise. An EIS should not consider cumulative impacts of multiple projects or multiple phases of a project, it should not consider impacts outside the United States, and it need not consider impacts of climate change.

The second set of scoping restrictions seem contrary to the new administration’s stated priorities. Indeed, President-Elect Biden announced nominees for EPA Administrator and CEQ Director as part of his “climate team.” But it is not clear whether the first set of changes will be rolled back. Any change to these rules, and to the implementing agency regulations, require full notice-and-comment rulemaking, and cannot be made immediately.

Moreover, these CEQ regulations have been challenged by environmental groups, Wild Virginia v. Council on Envtl. Qual., No. 3:20-cv-45 (W.D. Va. filed Aug. 6, 2020); Alaska Community Action on Toxics v. Council on Envtl. Qual., No. 3:20-cv-5199 (N.D. Cal. filed July 29, 2020); Envtl. Justice Health Alliance v. Council on Envtl. Qual., No. 1:20-cv-6143 (S.D.N.Y. filed Aug. 6, 2020), and by a number of states, California v. Council on Envtl. Qual., No. 3:30-cv-6057 (N.D. Cal. filed Aug. 28, 2020). So far, the court has denied a preliminary injunction in the Virginia case on September 11. The lawsuits complicate any effort by the new administration to leave portions of the new rules intact, both legally and politically.

However, President Trump issued a number of executive orders seeking to expedite or to circumvent environmental reviews, and those can be rescinded by President Biden relatively easily.

  • “Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects,” EO 13766, 82 Fed. Reg. 8657 (Jan. 30, 2017), sought to create a fast-track for review of “high priority infrastructure projects.”
  • “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects,” EO 13807, 82 Fed. Reg. 40,463 (Aug. 24, 2017), required establishment of a single lead agency to coordinate environmental reviews and permitting of infrastructure projects more generally, including setting timeline goals.
  • “Promoting Energy Infrastructure and Economic Growth,” EO 13868, 84 Fed. Reg. 15,495 (Apr. 15, 2019), applies specifically to energy projects and requires a single point of contact for federal permitting and review. It specifically called out state reviews underlying issuance by states of water quality certifications under section 401 of the Clean Water Act, 33 U.S.C. 1341, a specific problem for pipelines and other linear structures that cross streams and wetlands. WQCs were ultimately the subject of a new regulation restricting the scope of state review and imposing stricter timelines. 85 Fed. Reg. 42,210 (July 13, 2020), adopting 40 C.F.R. pt. 121.
  • “Accelerating the Nation’s Economic Recovery From the COVID-19 Emergency by Expediting Infrastructure Investments and Other Activities,” EO 13927, 85 Fed. Reg. 35,165 (June 4, 2020), responded to the economic effects of the COVID-19 pandemic by declaring an emergency, and directing federal agencies to use any emergency authorities under their NEPA regulations to avoid or to streamline review of any infrastructure projects. It is an expansion on the earlier COVID regulatory relief order, “Regulatory Relief To Support Economic Recovery,” EO 13924, 85 Fed. Reg. 31,353 (May 22, 2020).

Like the CEQ NEPA regulations, each of these has a substantive or scoping component that one would expect the new administration not to like. On the other hand, we will have to wait and see what happens to the efforts to expedite and to streamline the process of environmental review.

As noted above, future changes of environmental policies under the Biden Administration and other important environmental developments will be discussed in this blog.

TRANSITION THOUGHTS: What Clean Air Act Permittees Should Track in the Biden Administration

By Michael Cooke and Christopher Bell on Posted in Clean Air Act, EPA, Featured, Federal

The incoming Biden Administration intends to take many major environmental policy actions   aimed at climate change, enforcement, environmental justice, and several other issues, many of which entail reversing actions taken by the Trump Administration. Companies and their environmental managers should monitor and consider participating in this contentious process. GT will be tracking these changes in key areas on our E2 Law Blog in the coming months, with this first topic featuring “What Clean Air Act Permittees Should Track in the Biden Administration.”

Several Clean Air Act rules and policies were adopted by the U.S. Environmental Protection Agency (“EPA”) during the Trump Administration that directly affect operations with air permits. Some of these regulatory changes were accomplished by issuing guidance memos while others by made by conducting rulemakings that only recently have been completed and may be more vulnerable to being reversed.

Regulatory changes made via guidance memos are particularly vulnerable to revision because guidance documents might not be considered final agency action, which makes them tougher to challenge in court and more easily changed. Also, states can enact more stringent rules in their Clean Air Act State Implementation Plans (“SIPs”) (that EPA can also approve and enforce) that go beyond federal requirements.

In addition, when a presidential transition occurs, even recently adopted rules can be vacated by an incoming Congress using its Congressional Review Act (“CRA”) authority. The CRA allows Congress to pass, on simple majority votes of each house, joint resolutions that vacate regulations published within the past 60 legislative days. Thus, depending on which party gains majority control of the Senate through the upcoming Georgia runoff elections, the CRA might come into play. During the first year of the Trump Administration, when Republicans controlled both houses of Congress, the CRA was used to roll back Obama-era regulatory actions.

In addition to possibly rescinding, revising, or replacing the Trump-era rules, the Biden Administration may have to deal with a large volume of litigation over the Trump-era rules. As a result, we might see the Biden Administration declining to defend challenges to the prior rules, seeking to stay litigation while rescission or replacement rules are developed, or selectively defending portions of the rules.

Therefore, in the next several months, as business and operational plans are being made, companies should carefully consider how changes in Clean Air Act rules and policies might apply to their planned activities and objectives. Here are just a few samples of changes that were implemented that permittees should consider tracking.

EPA’s “New Source Review Preconstruction Permitting Requirements: Enforceability and Use of Actual-to-Projected-Actual Applicability Test in Determining Major Modification Applicability.” On Dec. 7, 2017, EPA issued an NSR guidance memorandum on how to project future air emissions after an existing facility is modified. Interpreting a 2002 rule, EPA said that, so long as a company complies with the procedural requirements used to forecast projected emissions, the EPA would not second-guess the permittee’s emission projections. If a company mistakenly projects an insignificant increase, EPA said it would not pursue enforcement unless the post-project actual emissions indicate a significant net increase did occur.

EPA’s “Project Emissions Accounting Under the New Source Review Preconstruction Permitting Program.” Traditionally, in NSR applicability reviews, only project increases were considered in “Step 1” of the review used to determine if significant emission increases were expected to occur as a result of the project. Only after that Step 1 would other decreases and increases be considered. This memo stated that emissions decreases as well as increases can be considered in Step 1 and that decreases in Step 1 need not be creditable or enforceable. This approach allows for some projects to “net-out” of NSR at Step 1 and never reach Step 2. Environmental groups challenged the memo as final agency action, but the case was stayed because EPA began a rulemaking to codify the memo’s approach. On Nov. 24, 2020, EPA published a final rule, at 85 Fed. Reg. 74890, that incorporates this approach, which may also be challenged in court.

EPA’s “Reclassification of Major Sources as Area Sources Under Section 112 of the Clean Air Act.” Changes in EPA’s so-called “Once in, Always in” policy were made, first by memo and then in a final rule issued on Nov. 19, 2020. This rule reverses prior agency policy that once sources were deemed to be subject to MACT standards, they remained subject to them even when they no longer exceeded the HAP program’s major source emission thresholds. This final rule might trigger requests for reconsideration, might be challenged in court, and might be vulnerable to CRA review in the next Congress. In addition, depending on each state’s rules, this interpretation might not be observed in a particular state.

In 2018, EPA also issued a final interpretive rule, “Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR): Aggregation; Reconsideration,” that addressed aggregation of projects to determine if they are part of one modification at the facility for purposes of NSR permitting. EPA concluded that the timing of the projects is not the only factor in determining whether projects should be aggregated and established a rebuttable presumption that projects more than three years apart should not be aggregated. There is some debate on how binding an interpretive rule is on the agency that issues it, and states with SIPs may have latitude to interpret their own programs. Therefore, companies must continue to look carefully at which modification projects must be aggregated for purposes of NSR review.

Some other policy changes or reinterpretations that the EPA made during the last four years by issuing guidance memos include: EPA’s Dec. 2, 2019, “Revised Policy on Exclusions from ‘Ambient Air’” which revises the Agency’s 1980 policy on the exclusion of certain areas from the scope of “ambient air” under the Clean Air Act and EPA’s regulations; EPA’s April 30, 2018, letter to Pennsylvania’s Department of Environmental Protection and its Oct. 16, 2018, letter to the Wisconsin Department of Environmental Management re: the interpretation of “common control” for purposes of determining whether two or more entities at a single location constitute a single source making for air permitting decisions; and EPA’s Nov. 26, 2019, guidance document, “Interpreting ‘Adjacent’ for New Source Review and Title V Source Determinations in All Industries Other Than Oil and Gas.”

As noted above, future changes of environmental policies under the Biden Administration and other important environmental developments will be discussed in this blog.

WEBINAR: Tax Equity Critical Issues and State of the Market Sneak Preview

By Greenberg Traurig, LLP on Posted in Events

On Thursday, Dec. 10 at 12:00 p.m.- 1:00 p.m. CST, Greenberg Traurig is partnering with Marathon Capital on a virtual presentation on tax equity that will focus on critical deal points and feature a sneak-peek panel discussion on the state of the market as we approach year end. GT’s Global Head of Energy Project Finance, Jeff Chester, will serve as a panelist alongside Shareholder April Kim and Of Counsel Margaret Weil. Guest speakers include Marathon Capital’s VP of Tax & Restructuring, Wayne Chomitz.
Click here to register for the webinar.

Topics Include:

  • 2020 Market Recap
  • Tax Equity Yields
  • Extension of Tax Credits/Revival of Cash Grants
  • Safe Harbor Strategies
  • Tax Equity for Energy Storage
  • 45Q Tax Credit
  • Trend on DROs
  • Syndication of Investors
  • 2021 Market Preview

The State of Coal Ash Regulation and Implications for the Commonwealth

By Jillian Kirn on Posted in Coal, Coal Ash, Environment, Featured, Litigation

Two recent developments, the finalization of Part B of the coal combustion residuals, or CCR, rule and the finalization of the 2020 Steam Electric Reconsideration Rule have triggered conversation about, and litigation over, the path forward for long-term management of CCR in the United States.

Click here to access the full article, “The State of Coal Ash Regulation and Implications for the Commonwealth.”

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