Renewable energy (RE) investments are seen by many as “iffy” propositions. Relying on regulatory measures, fossil fuel energy prices, and often some form of government subsidies, conventional wisdom would argue that burdening such projects with yet even more regulated activities would be foolhardy, at best.

Decades of efforts to remediate and re-use previously contaminated lands have resulted in the clearing of all property buildings to make them competitive with “greenfield,” or undeveloped, areas as locations for new construction. As a result, these efforts have increasingly challenged historic preservation restrictions on demolishing buildings as impediments to redevelopment.

This approach is arguably wrong from the perspective of both energy efficiency (EE) and financial sense. The time has come to rethink both EE/RE policy and revitalization/economic development policy in terms of how these two areas can be better combined.

Contaminated sites often have locational disadvantages as residential or commercial settings, thus there is little competition for the land from other developers and little likelihood of opposition to new uses (so long as the land gets remediated and returned to the tax rolls). Additionally, because the sites tend not to be in well-developed neighborhoods, they are less likely to have restrictions on installations such as solar or wind power generators.

“Mine-scarred lands” fall into the category of contaminated lands and “brownfields” under federal law. They are scattered across the nation, frequently located high on hillsides in wind-blown or heavy sunlight areas. There may be little or nothing nearby consuming electrical power – but all those mines used electricity at one point and had power lines running to them. Thus, they are already tied to a local grid and would not require special rights-of-way in order to deliver power to consumers. Their very isolation would limit any zoning and/or other land use restrictions on solar or wind power systems installation and they would be eligible for remediation subsidies from the U.S. Environmental Protection Agency (EPA), which additionally would leverage any U.S. Department of Energy (DOE) and/or private sector investments associated with them.

EPA is so committed to RE on contaminated sites that it has launched a special program, RE-Powering America’s Land, that offers an array of resources for efforts focused on using abandoned sites for RE generation. In particular, EPA has worked with DOE’s National Renewable Energy Lab (NREL) to map RE power generating capacity across the nation, detailing the potential of individual sites the agency has in its registry of contaminated land. This registry is especially useful on larger abandoned mine sites.

Urban brownfields (e.g. abandoned docks, factory sites, and obsolete shopping centers) offer another set of EE/RE opportunities. Again, the EE objective when approaching these areas is to avoid demolition and new construction to the greatest extent possible. Historic preservation advocates will favor such efforts, and state and local economic development funds and programs can complement DOE support.

Overall, contamination remediation may add to project costs when compared to the development of a clean site, but there are some additional funding opportunities available. In many of the urban locations (unlike the old abandoned mines), the original polluters, or firms that have inherited the obligation to mitigate the environmental problems are willing to provide cleanup funds so long as another party buys the site and gets it off their property books. Those monies would further complement DOE funding.  

In the urban development context, at least three federal agencies offer programs and funds that complement DOE support: the Department of Housing and Urban Development (HUD), EPA, and the Department of Commerce’s Economic Development Administration (EDA). HUD’s Brownfields Economic Development Initiative (BEDI) just closed its latest grant competition and may not be refunded, but the Department’s interest in and commitment to such efforts will not disappear. EPA has had a Memorandum of Understanding with EDA to collaborate on supporting brownfield redevelopment since 2002. At a minimum, the MOU will increase support for local government EE/RE efforts that involve contaminated sites.

None of these prospects for EE/RE investment involve projects that can be rapidly implemented. Some may permit fund commitments before the end of November 2011, but most will be longer-term propositions. As funds get replenished from revolving loans, termination of loan loss reserve programs, and other sources, state and local EE/RE program managers should focus on abandoned sites in their efforts to most effectively and efficiently leverage the resources that are available.

Content for this Blog post courtesy of Peter B. Meyer of The E.P. Systems Group, Inc., a member of the Center for Climate Strategies financial technical assistance team