Permitting Reform Emerges as Washington’s Only Bipartisan Energy Track, Wood Mackenzie Says

Expanded tax credits for clean generation look unlikely while Republicans hold the White House, yet permitting reform retains cross-party momentum in Congress, according to Wood Mackenzie. Democrats won majorities in both the House of Representatives and the Senate at the midterms, and the consultancy expects faster line construction and quicker connection of new capacity to become shared ground for the two parties. Sharply rising demand, together with the threat of higher bills for consumers, is pushing both sides toward compromise even under divided government.

Consumption driven by data centres and electrification will lift US power demand by 3% a year between 2026 and 2035, Wood Mackenzie forecasts, with wholesale prices climbing 46% over that span. Losses from congested grids already exceed $10 billion annually, while the pace of new line commissioning in the 2020s has slowed to less than half the rate of the previous decade.

The consultancy points to a draft bill named Bipartisan American Affordability and Jobs Act, or BAAJA, as the main vehicle for acceleration. Its proposed deadlines are:

• Environmental reviews under the National Environmental Policy Act completed within two years, cut to a single year for long-distance lines.
• A ban on agencies retroactively cancelling construction and operating permits once issued.
• Court challenges confined to a 150-day window after an environmental decision is recorded.
• Nine months to issue the dredge-and-fill permits required under the Clean Water Act for linear infrastructure.

Wood Mackenzie analyst Siddhant Warrier argues that the wind industry’s chance of reform lies in being folded into a cross-technology national bill whose implementation Congress then monitors.

Equipment remains a second bottleneck. An August executive order curbed grid imports from 24 countries including China, with final guidance due in December. There is an 18% shortage of power transformers and a 14% shortage of substation transformers.

The consultancy recalls that the 2007 energy independence law passed under a comparable balance of power, though Wood Mackenzie expert David Brown warns that partisan deadlock could still produce stagnation.

Source: PV Magazine USA