The reservation of the Standing Rock Sioux, located near the border of North and South Dakota, experiences powerful winds that regularly sweep its expansive plains at speeds of 20 miles per hour.
In 2020, the tribe initiated a plan to harness this energy by establishing the first tribal-owned utility-scale wind farm in the country. This project (known as Anpetu Wi) aims to provide employment opportunities, revenue, and electricity to an area with limited access to such resources.
The wind farm holds significant importance in the Standing Rock Sioux’s long-term economic strategy. The revenue gained from selling power to the regional grid would surpass the income generated by the reservation’s casino, which currently amounts to approximately $6 million annually.
Why Anpetu Wi Is on Pause
In recent years, the Bipartisan Infrastructure Bill and the Inflation Reduction Act (IRA) have created substantial opportunities for the development of wind and solar projects on tribal lands. These initiatives provide approximately $14 billion in subsidies and incentives. Moreover, they allow tribes and tax-exempt entities to receive direct payments in lieu of traditional tax breaks.
However, progress on the Standing Rock Sioux’s Anpetu Wi project has been hindered. Connecting to the regional electrical grid is a costly and multi-year process that requires technical expertise, which many tribes lack.
With some of the clean energy incentives set to expire as early as 2024, the Standing Rock Sioux and other Native tribes may miss out on this incredibly rare opportunity.
Cheri Smith, the president of the Alliance for Tribal Clean Energy, has emphasized the urgency of finding solutions to the grid connection issues. In a recent interview with Reuters, Smith said, “All of that money isn’t going to do its job unless we remove these roadblocks.”
The Standing Rock Sioux’s project is one of several large-scale clean energy initiatives proposed by tribes seeking to leverage the new federal subsidies for green energy.
According to interviews conducted with tribal representatives, government officials, and industry experts, these projects combined would produce a minimum of 4 GW of electricity.
The Unique Challenges Faced by Native Tribes
According to tribal leaders, half of the Indigenous clean energy projects are progressing slowly in the process of connecting to the grid. The remaining projects have not even started.
This highlights the challenges faced by small developers in navigating the grid interconnection process and accessing the incentives provided by Indian Regulatory Affairs.
In contrast to larger corporate competitors, tribes lack the necessary upfront capital and expertise to overcome regulatory obstacles and successfully connect major power projects to the grid. As a result, these tribes, who are among the poorest communities in the United States, risk missing out on significant development opportunities in renewable energy. This risk is especially high given that competition for incentives is so intense.
The Treasury Department has acknowledged the financial constraints faced by tribes in the predevelopment stage. However, it pointed out that Indian Regulatory Affairs does not allow for the release of funds until interconnection agreements are secured.
As an example, the Standing Rock Sioux tribe has already invested $3 million in technical studies and fees to remain in the queue for grid connection, even though there’s no guarantee of approval. Furthermore, additional deposits ranging from $1 million to $10 million may be required to move forward.
This situation represents a significant missed opportunity. A study conducted by the National Renewable Energy Laboratory found that tribal lands account for approximately 6.5% of the nation’s renewable energy potential.
Native American households experience significantly more electricity access issues compared to the national average. For instance, despite the proximity to major cities like Phoenix, only 30% of the Navajo Nation reservation has access to electricity.