Seeks High-voltage Grid Deployment Authority, 24/7 Clean Power for Federal Buildings
President Biden’s $2 trillion infrastructure plan has plenty for clean energy advocates of all stripes to like. For transmission advocates, the plan includes an investment tax credit aimed at building 20 GW of high voltage lines; for the solar industry, a 10-year extension of a direct-pay ITC for solar and storage; and for the carbon-capture contingent, “pioneer facilities” to demonstrate large-scale carbon capture for steel, cement and chemical production.
Biden’s framing of the infrastructure package as the American Jobs Plan — and its repeated references to good-paying, union jobs — reflect the White House strategy to build support for the plan across a broad spectrum of voters.
“My American jobs plan would put hundreds of thousands of people to work,” Biden said on Wednesday, speaking about the plan in Pittsburgh. “Line workers, electricians, laborers, laying thousands of miles of transmission lines, building a modern, resilient, fully clean grid and capping hundreds of thousands of orphaned oil and gas wells that need to be cleaned up because they’re abandoned, paying the same exact rate that a union man or woman would get having dug that well in the first place.”
At the same time, the plan’s energy provisions bear the stamp of policy recommendations clean energy groups have been advancing in reports and webinars since the election.
As outlined in a White House fact sheet, key energy provisions in the American Jobs Plan include:
- a federal Clean Energy Standard. The plan envisions an expanded energy efficiency and CES to help move the U.S. to carbon-free power by 2035, with an ongoing role for both hydropower and nuclear.
- streamlined permitting. The White House said it “will use smart, coordinated infrastructure permitting to expedite federal decisions, while prioritizing community consultation, and maximizing equity, health and environmental benefits.”
- transportation electrification. The plan includes $174 billion for point-of-sale rebates and tax incentives for consumers buying American-made EVs, as well as money to replace 50,000 diesel transit vehicles and electrify 20% of school buses.
- federal procurement. The plan would make the federal government a major clean energy offtaker by purchasing “24/7 clean power for federal buildings.”
- grid siting and finance. A new Grid Deployment Authority at the Department of Energy would “leverage existing rights of way — along roads and railways — and [support] creative financing tools to spur additional high-priority, high-voltage transmission lines.”
- direct-pay 45Q. The plan would modify and expand the bipartisan Section 45Q tax credit “to accelerate responsible carbon capture deployment and ensure permanent storage.” The program would be direct pay, making it easier to use for hard-to-decarbonize industrial applications, direct air capture and retrofits of existing power plants.
- equity. The plan reiterates Biden’s pledge to ensure 40% of the benefits of federal investments will target low-income and disadvantaged communities. “By pairing an investment in 15 decarbonized hydrogen demonstration projects in distressed communities with a new production tax credit, we can spur capital-project retrofits and installations that bolster and decarbonize our industry,” the White House said.
“Too often economic growth and recovery is concentrated on the coasts,” Biden said in Pittsburgh. “Too often investments have failed to meet the needs of marginalized communities left behind. There’s talent, innovation, everywhere.”
An End to Stopgap Incentives
While Biden’s plan makes repeated references to its bipartisan components, like 45Q, initial reactions from Republicans have been negative. Speaking on Fox News on Tuesday, Sen. John Barrasso (R-Wyo.), ranking member on the Senate Energy and Natural Resources Committee, called the plan’s funding source — increasing the corporate income tax from 21% to 28% — a “Trojan horse” aimed at “wealth redistribution.”
Any infrastructure package should be more narrowly focused on “things that people really need in terms of the infrastructure of the nation — the roads, the bridges, the highways, the ports, the dams,” he said.
But clean energy advocates were quick to support the plan. In an emailed statement, American Council on Renewable Energy CEO Gregory Wetstone said Biden’s plan “will move the clean energy sector beyond the endless cycles of temporary stopgap incentives toward a stable, long-term tax platform that will put millions of Americans back to work, upgrading our outdated grid and building a 21st century renewable energy economy. The direct pay option for renewable generation credits will go a long way toward accelerating the deployment needed to decarbonize the power sector by 2035, and new incentives for transmission and energy storage will be key to securing a more reliable, efficient and cleaner electric power grid.”
Abigail Ross Hopper, CEO of the Solar Energy Industries Association, applauded the plan while focusing her comments on job creation and equity. “An upcoming jobs study will show that solar has a unionization rate of 10.3%, which is substantially more than previously estimated and higher than the economy-wide average. These union jobs, along with numerous other career-sustaining jobs in solar, offer another moment to prioritize equity and create opportunities in every community, regardless of zip code, including for fossil fuel workers who are looking to continue their careers in the energy sector.”
Hopper also acknowledged that getting any clean energy legislation through Congress will be a challenge. “The release of these critical infrastructure priorities is just the beginning of a long policymaking process over the coming weeks and months that will require continued focus and determination on the part of elected officials,” she said.
There is considerable overlap between the Biden plan and energy and infrastructure bills House Democrats have rolled out in recent weeks, albeit with less ambitious spending. The Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act, introduced March 2, would authorize $565 billion over 10 years to get the nation to net zero by 2050. The bill would provide $500 million to boost the deployment of electric vehicle chargers versus Biden’s goal of building out a national network of 500,000 chargers by 2030, exact price tag unspecified.
The Leading Infrastructure For Tomorrow’s (LIFT) America Act, introduced March 11, calls for a $312 billion investment in energy, water, broadband and health care infrastructure — the same sectors targeted for upgrades and modernization in the Biden plan. LIFT proposes $500 million for energy-efficient retrofits at public schools, while Biden is asking for $100 billion for retrofits and for new schools that are “cutting-edge, energy-efficient and electrified.” (See LIFT Act Could Pour $312B into Infrastructure.)
Recent hearings on both bills underlined the considerable divide between Democrats and Republicans. While House Democrats have championed the CLEAN Future Act as an innovation and job generator, Republicans have countered that it is a roadmap for implementing the Green New Deal.
The bill and its goal of decarbonizing the U.S. energy system would “destroy our livelihoods, disrupt families, decimate communities, increase utility bills [and] threaten the stability our grid,” said Rep. David McKinley (R-W.Va.) at a March 18 hearing before the House Energy and Commerce Subcommittee on the Environment and Climate Change. (See Battle Lines Drawn over CLEAN Future Act.)
A few hours before Biden’s speech, Jeffrey Sachs, president of the Sustainable Development Solutions Network, predicted that, like the president’s COVID-19 package, the American Jobs Plan would have to be passed via a reconciliation process. Speaking at a webinar on the SDSN’s Zero Carbon Action Plan, Sachs said, “There will be 10 Republican senators that say, ‘Look, we want the country to move forward; we’ll work with the administration.’ Otherwise, they’re going to pass this on a reconciliation, or the filibuster is going to be ended because we’re really coming to a showdown on this issue.”