Modeling Obstacles to Energy Infrastructure for Improved Policy Analysis

The United States has a pressing need to rapidly enhance its energy infrastructure to address domestic and global priorities. The infrastructure needs are broad and varied, including clean electricity generation, pipelines, and electricity transmission.

One of the clear drivers for the policy conversation is to meet decarbonization goals on a timescale of decades. Pathways to meet the decarbonization goals for the power sector suggest that US deployment of renewables would need to be well over the peak historical build rate immediately, and that deployment rate would need to be sustained or increased every year for the foreseeable future (Denholm et al. 2022).

Success in building a single project, however, requires navigating a complex and interconnected series of hurdles. Bringing a single generation project online, for example, requires navigating not only the supply chain to source materials and finance the project but also processes related to siting, permitting, and interconnection. Any new transmission needed to support the project will require additional process steps. Along the way, the project may interact with government agencies at local, state, and federal levels; is likely to need to work with communities to build support; and may face potential litigation. Increasing the build rates of energy infrastructure to reach the necessary pace and scale to meet policy goals will require making all these contributors to construction timelines as efficient as possible.

In light of these challenges and needs, a broad and bipartisan concern about obstacles to energy infrastructure deployment has emerged, along with a general agreement that processes should be improved and coordinated. Dozens of legislative proposals from both parties have been put forward to address different aspects of this problem, but consensus on which obstacles are most important overall, or on the effectiveness of potential policy interventions to address them, has been elusive.

It is noteworthy that of the dozens of legislative proposals intended to reform the permitting process or address other obstacles to specific energy infrastructure, few have been supported by any type of analysis. In many cases, even basic questions about the obstacles are unanswered. This stands in contrast to recently enacted energy legislation such as the Inflation Reduction Act or Investment in Infrastructure and Jobs Act, which include many provisions based on analysis using energy system models and a broad academic literature.

The relative absence of analysis of policies intended to address obstacles to energy infrastructure is due to multiple factors. In some cases, the obstacles are not well quantified, challenging efforts to design policy interventions. Even when obstacles are quantified, the effects of policy interventions on the obstacles may not be well understood or may be complicated through interactions with other factors not addressed by the intervention. For example, the interconnection queue is an oft-cited obstacle to generation investment that can be affected by inadequate transmission or long permitting timelines, which are obstacles in their own right. And finally, energy system models and other analytic tools are not well equipped to quantify the effects of many policy interventions.

The result is bipartisan agreement on the need for more efficient processes to build energy infrastructure, leading the congressional and executive branches to focus on finding a solution. The policy conversation, however, is poorly informed, lacking both basic information and appropriate tools for analyzing policy solutions. The current debate about the relative effects on emissions of the proposed Energy Permitting Reform Act of 2024 exemplifies this issue, with estimates of the effects of specific provisions ranging by an order of magnitude, and in some cases there is even uncertainty about their overall sign.

This situation represents a critical opportunity for the research community to inform policymakers’ efforts by working at each of these levels to improve the characterization of obstacles, understanding of the effects of policy proposals, and representation within models. For this purpose, RFF has initiated a project to identify and fill information gaps. The goals of the project are to expand data and analysis on key obstacles to energy infrastructure, develop an improved understanding of current legislative proposals, and improve modeling capabilities to evaluate the impacts of legislative proposals.

In the first phase of the project, RFF convened experts on various aspects of deployment of energy infrastructure, including energy system modeling and permitting, for a series of three workshops on obstacles related to energy infrastructure deployment. The objectives of the workshops were to identify the most relevant barriers to deployment of energy infrastructure, determine the best metrics for understanding the impact of those obstacles, and inform the development of a coherent research strategy.

The first workshop positioned the project within the current policy context through a discussion with key congressional and administration staff and was intended to refine key research questions and identify the topics for subsequent workshops. The second centered on obstacles to building transmission, improving its representation in models, and identifying analytic approaches to answer key policy questions. The third was on the obstacles to building new generation resources and how to represent them in energy models. Ancillary conversations focused on the challenges associated with analyzing obstacles to industrial decarbonization in models.

This report summarizes the key takeaways from the discussions in the RFF workshop series. Insights from policymakers, subject matter experts, and energy modelers are discussed in each section and inform a research agenda to guide a series of commissioned research papers to be completed in 2025. The report is structured as follows: Section 2 provides a summary of existing research. Section 3 assesses challenges representing obstacles in energy models. Section 4 discusses recent policy developments and legislative activity, and Section 5 looks at the role of energy modeling. Section 6 considers takeaways and research priorities, and Section 7 is a concluding discussion of the near-term research agenda.