By Avi Salzman

SunZia, America's largest renewable energy project, showcases both the promise and uncertainty of the energy transition.

The project is a marvel, stretching across 550,000 acres and three counties in New Mexico. Its 916 wind turbines will stand about 600 feet tall and its 550-mile transmission line will send electricity generated in remote cactus-filled fields to power lines connected to high-population areas in Arizona and California. Once completed in 2026, it could provide enough juice for up to 3 million homes.

The project's scale and the speed with which the developers expect to build it are positives for renewable development in the country.

But the time it took to get to this stage points to one of the biggest problems facing renewable developers: Getting permission to connect new projects to the grid is an enormous undertaking. The wind and transmission project first started applying for permits in 2006 and has been working its way through legal and regulatory hurdles since.

For the U.S. to triple its renewable capacity by 2030, a goal the Biden administration announced last year, it will have to figure out how to get these kinds of projects up and running faster.

"Permitting reform is essential to us accelerating the energy transition, " said Kristina Lund, the president of Pattern Energy, a private company based in San Francisco, in an interview. "Sun Zia was being permitted for 17 years. What that means is that there were four different presidential administrations, 11 different heads of the Bureau of Land Management. It's highly costly. It's really difficult to make sure that the prioritization stays constant."

Several publicly traded companies are involved in the SunZia project too. Quanta Services is the main contractor and has become a go-to contractor for renewable projects. The turbines will be provided by GE Vernova and Vestas. Japanese company Hitachi developed the transmission line. European oil major Shell is one of the companies that has contracted to buy the electric power.

The SunZia project is expected to solve one of the biggest obstacles to California's path to decarbonizing its electricity grid. California has succeeded in transitioning electricity production to renewables during most days but faces a gap in the evening. New Mexico's wind gusts are particularly active in those early evening hours when people come home from work and switch on their appliances, Lund said.

As far as legal challenges, SunZia isn't quite out of the woods yet. Native American tribes and environmental groups sued the Bureau of Land Management over the project's high-voltage direct current (HVDC) transmission line that will send the power from all those wind turbines to Arizona. They say the federal government did not adequately assess the cultural importance of areas where the transmission line will travel, and that the project should be halted through an injunction. A federal judge ruled in favor of the government, but the plaintiffs have since appealed to the 9th Circuit Court of Appeals.

The long-distance high-voltage transmission line is a particularly efficient piece of machinery that is still rarely used in the U.S., Lund said. "We need more of that in this country, and it's great to show that we can do it," she said.

Transmission is probably the biggest roadblock to the growth of renewable energy in the U.S., experts say. Onshore wind installations have languished in the past four years after peaking in 2020, in part because projects have trouble getting approval for grid connections. Operators of two major electricity grids serving more than a dozen states have paused applications for new transmission approvals because of the backlog. Lund hopes that SunZia's example will encourage lawmakers to reform the process.

"One thing that is very encouraging to me is that the conversation on transmission has changed," she said. "For many years, we were just talking about the generation of the wind and solar energy, but now people understand that energy needs to get from where it's generated to where it's used, and transmission is the key."

Write to Avi Salzman at avi.salzman@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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October 01, 2024 01:30 ET (05:30 GMT)

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