The United States is broadening the scope and diversity of its energy mix at a rate and to an extent not seen in a century, if ever. The changes underway provide both important opportunities and critical challenges for owners seeking to repurpose existing assets in a market governed by overlapping federal, state and local regulations.Continue Reading Six Key Considerations for Transitioning Existing Fossil Fuel Transport, Storage and Electricity Generation Assets to New Uses
On February 13, 2023, the Internal Revenue Service (“IRS”) issued its “initial guidance”[1] regarding the Low-Income Communities Bonus Credit Program (the “Program”) established by the Inflation Reduction Act of 2022 (the “IRA”)[2] and codified under new Section 48(e) of the Internal Revenue Code (“IRC”) concerning “special rules for certain solar and wind facilities placed in service in connection with low-income communities.” The guidance makes strides to implement the Program required by the IRA, but it also leaves some gaps to be addressed in more guidance to come. Continue Reading IRS Issues Guidance for Inflation Reduction Act Low-Income Bonus Tax Credits
As previously discussed in our blog Inflation Reduction Act: Wage and Apprenticeship Requirements, the Inflation Reduction Act (the “IRA”) restructured the tax credit system associated with qualified clean energy projects. In particular, to receive the full value of various tax credits, companies must now pay the prevailing wage rates and employ a certain number of registered apprentices in the construction, alteration, and/or repair of qualified clean energy facilities or projects as defined under the Code.Continue Reading Inflation Reduction Act: Prevailing Wage and Apprenticeship Requirement FAQs and Key Takeaways from the Initial Guidance from the Treasury and IRS
U.S. state and federal lawmakers, as well as federal regulators, are increasingly focusing on the role of blockchain and distributed ledger technology in ongoing efforts to combat climate change and to facilitate the transition from carbon-based fossil fuels.Continue Reading Lawmakers and Regulators Examine Role of Blockchain Technology in Energy Transitions
Continued commitments to renewable generation in 2021 mean that corporate purchasers remain major drivers in the development of new wind and solar power generation projects in the United States. Megawatt numbers vary depending on the source; however, there is no dispute about the significant role played by corporates. While corporate offtakers were initially focused on wind generation, corporate offtakers now regularly contract for solar generation as well.
Continue Reading Corporate Offtake Agreements are a Driving Force Behind the Shift Toward Renewable Energy in the United States
Investors are increasingly focused on Environmental, Social, and Governance (ESG), and more companies are reporting on these statistics. Reporting on ESG metrics is challenging because there is a lack of consistency in the market as to what ESG is, how to measure whether ESG is successful, and how that success is rewarded. In the debt capital markets, industry trade groups are working to provide market participants with ESG reporting frameworks in order to unite these ESG reporting efforts and move towards a more uniform reporting standard. The latest proposed framework is the Social Loan Principles published by the Asia Pacific Loan Market Association, the Loan Market Association and the Loan Syndications & Trading Association.
Continue Reading Six Key Items to be Aware of Regarding the Social Loan Principles
Offshore Wind Goes West. On May 25, the Biden administration and the State of California announced an effort to develop areas off of the coast of California for up to 4.6 GW of offshore wind generation. While Northeastern states and project developers are poised to begin bringing commercial scale offshore projects to market, this announcement represents the first concrete step to open up the West coast to offshore wind development. Wind generation in the waters off the West coast will face some unique challenges (such as water depths that will force the use of floating wind turbines that are still in pre-commercial stages of development), but will also face some of the same challenges that we have been working through on the East coast (such as constrained transmission corridors, undeveloped onshore interconnection and transmission infrastructure and the need for Jones Act-qualified vessels). Here are six key things to be aware of in the development of floating offshore wind in California.
Continue Reading Six Key Things to be Aware of in the Development of Floating Offshore Wind in California
On October 1, 2020, the fourth edition of the Equator Principles came into effect. This fourth edition expands the scope of infrastructure projects that are captured by the principles and
Continue Reading Six Key Items to be Aware of Today Regarding the Equator Principles IV
Momentum is growing quickly towards widespread construction of US offshore wind-powered electrical generation facilities. Several States along the northern part of the Atlantic coast have projects actively under development and RFPs for more projects to come. Recent regulatory guidance has been issued clarifying Jones Act implementation. Here are six key trends and developments for market participants to be aware of.
Continue Reading Six Key Items to be Aware of Today in U.S. Offshore Wind (“OSW”)
In light of a recent IRS Private Letter Ruling addressing public utility property and loss disallowance rules, here are six key items to be aware of today in tax equity transactions for renewable energy projects owned by public utilities.
Continue Reading Tax Equity for Public Utilities
On May 28, 2020, the IRS proposed long-awaited regulations that address key areas of uncertainty in existing guidance for Internal Revenue Code Section 45Q (45Q) carbon capture and sequestration tax credits. Although some questions remain unanswered, the regulations are a significant step towards reducing regulatory uncertainty and fostering a functional market for 45Q credits. This article will focus on the regulations’ key takeaways for transaction structuring, while also highlighting technical clarifications of significant import for this nascent industry.
Continue Reading IRS Proposes Key Section 45Q Carbon Capture and Sequestration Regulations