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A conservation with George Povall of All Our Energy
Today’s chat is with George Povall, director of the All Our Energy pro-offshore wind environmental group. Povall – who told me he was inspired to be an environmentalist by the film Avatar – has for more than a decade been a key organizer on the ground in the Long Island area for supporting offshore wind development. But these days he spends a lot more time fighting renewables disinformation, going so far as to travel the community trying to re-educate people about this technology in light of the loud activism against it.
After the news dropped that states are suing to undo the Trump executive order against offshore wind, I wanted to chat with Povell about what environmentalists should do to combat the anti-renewables movement and whether there’s still any path forward for the industry he’s spent nearly a decade working to build as an activist.
The following conversation transcript was lightly edited for clarity.
Okay so first of all, what made you become a pro-wind environmental activist?
This all goes back to maybe 15 years ago. I’ve always been environmentally minded. I’m 55 years old and not from the nonprofit sector. I like everybody else was living my normal life and maybe with some naivete thought that if things were good and economical and made sense and worked better than what we were doing in the past, we’d move on from that. But time kept creeping along and we went through the 1990s and 2000s and then I began to become more aware. I just thought people who knew more than I did would do something about this.
Surprisingly I look back and a movie that really motivated me to do what I’m doing is Avatar. They’re destroying the planet for the materials – exactly what we’re seeing now. We’re seeing it more than ever, with someone who is almost like a comic book villain now wanting to strip-mine the sea bed. I wonder what the anti-offshore wind people have to say about that.
It’s been surprising to me. We had always known there was going to be opposition to offshore wind, and disinformation coming. We had always tried to get out ahead of it but we were always unsuccessful in getting funding to deal with that.
Did the developers get ahead of it?
No. I think the developers got a lot of bad advice from the public relations firms they were using.
We kept telling them, please just tell the people what’s going on. I can see how they got into that position because people were asking questions about things that weren’t decided yet. But instead of saying they didn’t know and it wasn’t decided yet, they refused to admit they didn’t know something, even if that was the case. It engendered a lot of distrust in the communities that opponents were able to seize on quite easily.
I know from someone who has done campaigns of community organizing before, you just tell people what it is and what you know. It engenders trust. Unfortunately it didn’t go that way and I think a big part of that is they should’ve been more ready for people who were not willing to accept any answer as acceptable.
It feels to me like offshore wind has now become a wedge issue. A culture war issue. And they got people who frankly should’ve known better to listen to some of the least reliable people in the community throwing out claims that were ridiculous. And they overwhelmed a lot of people with half truths, misinformation. People couldn’t keep up.
What is the environmental movement actually doing now to address what is not just a policy problem but a cultural problem?
Well, that’s a great question and we have been trying to turn it around for a while. Though we have some resources, it is really hard to deprogram people. It’s very hard. I have spoken to people who came to me and said, I haven’t made up my mind. I am just looking for the right information. And when I gave it to them, they told me I was a “climate cult zealot.” That’s what everybody in the environmental movement is to them.
We need to really just bring in the people who support this stuff. It’s a basic concept but unfortunately we’ve never had the capacity to do that kind of thing. It’s something bigger organizations were doing, but they don’t have capacity for it now either. So it’s on us to just find the things that aren’t being done and do them. It’s about building coalitions.
It’s about starting from zero. Having offshore wind 101 information sessions and getting other organizations involved and getting their people educated. It can’t be a single process doing that. If the general public knew how a wind turbine works, if the average person on the street knew how it works, they’d laugh at people when they throw disinformation at them – but they don’t know it’s nonsense yet.
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A conversation with Scott Cockerham of Latham and Watkins.
This week’s conversation is with Scott Cockerham, a partner with the law firm Latham and Watkins whose expertise I sought to help me best understand the Treasury Department’s recent guidance on the federal solar and wind tax credits. We focused on something you’ve probably been thinking about a lot: how to qualify for the “start construction” part of the new tax regime, which is the primary hurdle for anyone still in the thicket of a fight with local opposition.
The following is our chat lightly edited for clarity. Enjoy.
So can you explain what we’re looking at here with the guidance and its approach to what it considers the beginning of construction?
One of the reasons for the guidance was a distinction in the final version of the bill that treated wind and solar differently for purposes of tax credit phase-outs. They landed on those types of assets being placed in service by the end of 2027, or construction having to begin within 12 months of enactment – by July 4th, 2026. But as part of the final package, the Trump administration promised the House Freedom Caucus members they would tighten up what it means to ‘start construction’ for solar and wind assets in particular.
In terms of changes, probably the biggest difference is that for projects over 1.5 megawatts of output, you can no longer use a “5% safe harbor” to qualify projects. The 5% safe harbor was a construct in prior start of construction guidance saying you could begin construction by incurring 5% of your project cost. That will no longer be available for larger projects. Residential projects and other smaller solar projects will still have that available to them. But that is probably the biggest change.
The other avenue to start construction is called the “physical work test,” which requires the commencement of physical work of a significant nature. The work can either be performed on-site or it can be performed off-site by a vendor. The new guidance largely parrotted those rules from prior guidance and in many cases transferred the concepts word-for-word. So on the physical work side, not much changed.
Significantly, there’s another aspect of these rules that say you have to continue work once you start. It’s like asking if you really ran a race if you didn’t keep going to the finish line. Helpfully, the new guidance retains an old rule saying that you’re assumed to have worked continuously if you place in service within four calendar years after the year work began. So if you begin in 2025 you have until the end of 2029 to place in service without having to prove continuous work. There had been rumors about that four-year window being shortened, so the fact that it was retained is very helpful to project pipelines.
The other major point I’d highlight is that the effective date of the new guidance is September 2. There’s still a limited window between now and then to continue to access the old rules. This also provides greater certainty for developers who attempted to start construction under the old rules after July 4, 2025. They can be confident that what they did still works assuming it was consistent with the prior guidance.
On the construction start – what kinds of projects would’ve maybe opted to use the 5% cost metric before?
Generally speaking it has mostly been distributed generation and residential solar projects. On the utility scale side it had recently tended to be projects buying domestic modules where there might have been an angle to access the domestic content tax credit bonus as well.
For larger projects, the 5% test can be quite expensive. If you’re a 200-megawatt project, 5% of your project is not nothing – that actually can be quite high. I would say probably the majority of utility scale projects in recent years had relied on the manufacturing of transformers as the primary strategy.
So now that option is not available to utility scale projects anymore?
The domestic content bonus is still available, but prior to September 2 you can procure modules for a large project and potentially both begin construction and qualify for the domestic content bonus at the same time. Beginning September 2 the module procurement wouldn’t help that same project begin construction.
Okay, so help me understand what kinds of work will developers need to do in order to pass the physical work test here?
A lot of it is market-driven by preferences from tax equity investors and tax credit buyers and their tax counsel. Over the last 8 years or so transformer manufacturing has become quite popular. I expect that to continue to be an avenue people will pursue. Another avenue we see quite often is on-site physical work, so for a wind project for example that can involve digging foundations for your wind turbines, covering them with concrete slabs, and doing work for something called string roads – roads that go between your turbines primarily for operations and maintenance. On the solar side, it would be similar kinds of on-site work: foundation work, road work, driving piles, putting things up at the site.
One of the things that is more difficult about the physical work test as opposed to the 5% test is that it is subjective. I always tell people that more work is always better. In the first instance it’s likely up to whatever your financing party thinks is enough and that’s going to be a project-specific determination, typically.
Okay, and how much will permitting be a factor in passing the physical work test?
It depends. It can certainly affect on-site work if you don’t have access to the site yet. That is obviously problematic.
But it wouldn’t prevent you from doing an off-site physical work strategy. That would involve procuring a non-inventory item like a transformer for the project. So there are still different things you can do depending on the facts.
What’s your ultimate takeaway on the Treasury guidance overall?
It certainly makes beginning construction on wind and solar more difficult, but I think the overall reaction that I and others in the market have mostly had is that the guidance came out much better than people feared. There were a lot of rumors going around about things that could have been really problematic, but for the most part, other than the 5% test option going away, the sense is that not a whole lot changed. This is a positive result on the development side.
And more of the week’s most important news around renewable energy conflicts.
1. Carroll County, Arkansas – The head of an influential national right-wing advocacy group is now targeting a wind project in Arkansas, seeking federal intervention to block something that looked like it would be built.
2. Suffolk County, New York – EPA Administrator Lee Zeldin this week endorsed efforts by activists on Long Island to oppose energy storage in their neighborhoods.
3. Multiple counties, Indiana – This has been a very bad week for renewables in the Sooner state.
4. Brunswick County, North Carolina – Duke Energy is pouring cold water on anyone still interested in developing offshore wind off the coast of North Carolina.
5. Bell County, Texas – We have a solar transmission stand-off brewing in Texas, of all places.
Is there going to be a flight out of Nevada?
Donald Trump’s renewables permitting freeze is prompting solar companies to find an escape hatch from Nevada.
As I previously reported, the Interior Department has all but halted new approvals for solar and wind projects on federal lands. It was entirely unclear how that would affect transmission out west, including in the solar-friendly Nevada desert where major lines were in progress to help power both communities and a growing number of data centers. Shortly after the pause, I took notice of the fact that regulators quietly delayed the timetable by at least two weeks for a key line – the northern portion of NV Energy’s Greenlink project – that had been expected to connect to a litany of solar facilities. Interior told me it still planned to complete the project in September, but it also confirmed that projects specifically necessary for connecting solar onto the grid would face “enhanced” reviews.
Well, we have the latest update in this saga. It turns out NV Energy has actually been beseeching the Federal Energy Regulatory Commission to let solar projects previously planned for Greenlink bail from the interconnection queue without penalty. And the solar industry is now backing them up.
In a July 28 filing submitted after Interior began politically reviewing all renewables projects, NV Energy requested FERC provide a short-term penalty waiver to companies who may elect to leave the interconnection queue because their projects are no longer viable. Typically, companies are subject to financial penalties for withdrawals from the queue, a policy intended to keep developers from hogging a place in line with a risky project they might never build. Now, at least in the eyes of this key power company, it seems Trump’s pause has made that the case for far too many projects.
“It is important that non-viable projects be terminated or withdrawn so that the queue and any required restudies be updated as quickly as possible,” stated the filing, which was first reported by Utility Dive earlier this week. NV Energy also believes there is concern customers may seek to have their deals for power expected from these projects terminated under “force majeure" clauses, and so “the purpose of this waiver request is thus to both clear the queue to the extent possible and avoid unneeded disputes.”
On Monday, the Solar Energy Industries Association endorsed the request in a filing to the commission made in partnership with regional renewable trade group Interwest Energy Alliance. The support statement referenced both the recent de facto repeal of IRA credits as well as the permitting freeze, stating it now “appears that federal agency review staff are unsure how to proceed on solar projects.” This even includes projects on private lands, a concern first raised by Nevada Gov. Joe Lombardo, a Republican, after the permitting freeze came into effect.
The groups all but stated they anticipate companies will pull the plug on solar projects in Nevada, proclaiming that by granting the waiver, “it will encourage projects facing uncertainty due to recent legislation and federal action to exit the process sooner and without penalty, creating more certainty for the remaining projects.”
How this reads to me: Energy developers are understandably trying to figure out how to skate away from this increasingly risky situation as cleanly as they can. It’s anybody’s guess if FERC is willing to show lenience toward these developers.