Make Sure You Have a Way Out:
The Importance of Off-Take Infrastructure For Renewable and Energy Transition Projects

written by Jim Strawn

Is your project site close enough to the grid? Having resources is pointless without access to markets. To address this issue for agricultural purposes, Texas implemented the Farm to Market Road System, which is now the most extensive secondary highway system in the U.S. When it comes to natural gas, Texas has more miles of pipeline than the next five states combined, but there are still areas in Texas and all over the U.S. with untapped gas resources that lack pipeline access. Renewable and energy transition developers face this same situation all over the country, as the grid expansion may not have reached the location of their proposed projects.

Determining your project’s proximity to the market should be done at the earliest planning stage.  Suppose there is no substation within a few miles of your proposed project. In that case, you should consider alternative locations because the cost and time involved in building transmission to your area are likely prohibitive.

High voltage transmission companies have the legal right to use condemnation to acquire easements. However, even with this option, it can take several years to become fully operational. Obtaining regulatory approval is a complex and time-consuming process, and even if approved, the economics of constructing the necessary lines and infrastructure for your project may not be viable.

Even if the infrastructure is sufficiently close by, you will still need to obtain regulatory approval to connect your project to the grid.  The Texas grid doesn’t cross state lines and is not federally regulated. Even so, the permitting process with the Electric Reliability Council of Texas (“ERCOT”) can take up to 10 months for a small (up to 10 MW) project or up to 30 months for a larger project. 

RR&A has attorneys with decades of experience advising private and publicly traded energy companies. Because so many of our attorneys have spent time in-house, we understand the business as well as the legal risk in these situations. This is an experience most other law firms can’t offer. Contact RR&A at the earliest stages of your project to help evaluate legal and regulatory issues associated with your project location, develop your project timeline, and understand the legal needs at each project phase.

Read Related Posts

A Brave ReNEWable World: The Accommodation Doctrine and Renewable Energy Projects

Uncovering Encumbrances: What Lies on the Surface for Renewable and Energy Transition Projects?

Disclaimer: The information and material on this website is general information about our practice and firm. This information does not offer specific legal advice and the use of this information does not create an attorney-client relationship with RR&A or any of its attorneys. The information on this website should not be used for legal advice, and persons should not act upon the information on this website without engaging professional legal counsel.

Verified by MonsterInsights