Released on March 31, the Biden-Harris administration’s massive infrastructure plan, called the American Jobs Plan, is hugely ambitious. Biden accordingly described it as a “once-in-a-generation investment.” The proposal does not just look to fix the US’ crumbling infrastructure—currently ranked 13th in the world—it aims to transform the US economy, simultaneously addressing climate change, employment, and historic inequities. Its strength is that it recognizes the connections between infrastructure, energy, water, climate change, access to services, jobs, and justice. However, this might also be its weakness. While the individual proposals are not necessarily inseparable, coming in at an estimated $2 trillion, the plan will face significant hurdles in Congress. If it passes, it is likely to look very different than it does now.
Creating demand: the power of procurement
President Biden’s expansive and hugely ambitious American Jobs Plan recognizes—in multiple instances—the power of the federal government to create demand for clean energy technologies, and thus create large, private sector markets for those technologies. With the largest budget of any government in the world, the US federal government has the singular power to push emerging technologies down the cost curve, ultimately making it cheaper for corporations and individuals to deploy these technologies (though in the short term, supply might not keep up with huge government purchases as production ramps up, crowding out private sector demand). From electric vehicles to clean power technologies and from low-carbon building materials to electric heat pumps, Biden plans to use the government’s vast resources to rapidly deploy these technologies at scale. More than tax credits and subsidies, utilizing federal buying power to accelerate the deployment of clean energy technologies might be the fastest route to the clean energy economy of the future.
Randy Bell is the Director of the Atlantic Council Global Energy Center.
Biden infrastructure plan key to delivering on Appalachian infrastructure priorities
President Biden’s American Jobs Plan has the potential to deliver significantly on critical infrastructure priorities in the nation’s energy-producing regions, particularly Appalachia. The president’s plan, appropriately announced in Pittsburgh, allocates $16 billion to the plugging of oil and gas wells and to the cleanup of abandoned mines. Investment at this level would be transformative to regions that have lost substantial revenue and employment opportunities to the energy transition, trends further exacerbated by the COVID-19 pandemic. Beyond the environmental necessity for reclamation, these efforts would provide union jobs to a workforce that had relied for decades on similar opportunities in the fossil fuel sector.
In addition to site remediation, the plan also aims to deliver accessible and affordable broadband connection to all rural Americans. Reliable connection is essential to economic diversification, grid modernization, and—as evidenced clearly by the COVID-19 crisis—access to many aspects of everyday life. Currently, more than 35 percent of those living in rural areas do not have access to high-speed internet. Furthermore, even in areas where connection has previously been made available, reliable broadband has long been cost-prohibitive for many. Alongside the other pillars of the plan—particularly the considerable investment in clean drinking water and electrical infrastructure—increased connectivity and the reclamation of abandoned mine lands are key elements to an equitable energy transition and building back historically energy-producing regions in a resilient, sustainable way.
Kelsey Forren is an Assistant Director at the Atlantic Council Global Energy Center.
Biden Plan seeks to develop US electric mobility sector
Included in the American Jobs Plan is funding for half a million electric vehicle (EV) charging stations by 2030 throughout the United States (more than five times the current number of “outlets,” a third of which are in California). The plan also includes “incentives for Americans to buy EVs and money to retool factories and boost domestic supply of materials,” in an effort to increase the domestic market share of EVs. Driving accelerated supply and demand for battery electric vehicles (BEVs) will require more aggressive tailpipe standards and BEV mandates, and some of these measures can be enacted under existing Clean Air Act authority without new legislation.
Biden’s plan would also replace about 75-80 percent of the diesel transit buses in use in the United States today (currently 65,000) primarily with electric buses (e-buses) and replace 20 percent of school buses. Since the federal government, through the transportation budget, normally finances 80-90 percent of the cost of new transit buses (and their infrastructure) for local and regional transportation districts, this will mean realigning and upgrading an existing program. Normally the government would be replacing one half to two-thirds of all currently operating transit buses over the next decade in any event. E-buses can cost as much as 30 percent more than diesel buses but have lower operating costs; federal loans to local transit authorities for the difference in acquisition costs could provide a huge impetus for this program since those loans could easily be paid back in seven to eight years (according to most current calculations) from savings in operating expenses. If implemented, this program will certainly supercharge the development of a domestic electric bus industry, which is still in its infancy in the United States.
Biden’s plan details the establishment of an “Energy Efficiency and Clean Electricity Standard” (EECES), which would require an increasing amount of electricity to be derived from low-carbon generation, aiming at a zero-carbon power system by 2035 (which would likely include existing hydropower and roughly 20 percent nuclear). The mandate would require congressional legislation, and the Biden plan does not indicate specific reductions that would be required each year prior to 2035, leaving those details to Congress.
House Democrats have introduced the CLEAN Future Act, which includes a clean energy standard (CES) that would require all electricity retailers to supply 80 percent zero-carbon power by 2030 and 100 percent clean electricity by 2035. Essentially, a CES sets efficiency “rates” that each electricity producer or facility must meet (emissions per megawatt of electricity generated) and increases the requirement annually until only renewable or other zero-carbon sources can meet the overall efficiency standard. Clean electricity standards involve the trading of permits, so a CES is essentially a cap-and-trade system where the “caps” are efficiency requirements, not actual emissions caps. The House bill would also invest in “clean energy, distributed energy resources, grid infrastructure, and microgrids” to increase resiliency and cut pollution. The House bill would empower the federal government to speed up building out the transmission system to achieve clean energy goals.
While traditionally a CES—as a regulatory program—could not be enacted through the Senate by a narrow majority vote on budget reconciliation, efforts are underway to design a CES in which permit trading is taxed, in the hope that such a measure might meet Senate reconciliation requirements.
George Frampton is a Resident Senior Fellow at the Atlantic Council Global Energy Center.
A Clean Electricity Standard should be lauded for its technology-neutral approach
As the Biden-Harris administration works to put the United States on a pathway to decarbonize the power sector by 2035 and reach net-zero emissions by 2050, maintaining the current nuclear reactor fleet should be a key priority. However, nuclear power has struggled in recent years in the United States due to the low cost of natural gas and renewables and other features of the liberalized electricity market. The American Jobs Plan states that the administration will establish an Energy Efficiency and Clean Electricity Standard (EECES) that will “leverage the carbon pollution-free energy provided by existing sources like nuclear and hydropower,” implying a technology-neutral approach to power sector decarbonization. However, without greater detail, it is unclear whether this is enough to make nuclear energy cost competitive in the United States.
Dr. Jennifer T. Gordon is a Resident Senior Fellow and the Managing Editor at the Atlantic Council Global Energy Center.
Transmission, electric vehicles, and R&D funding will be key to advancing the energy transition
Three components of the infrastructure plan stand out for their potentially positive impact on energy and the environment. The commitment to invest in electric transmission addresses a critical but unsung element of the transition to clean energy, and it will substantially improve the United States’ ability to rely on renewable generation for more electricity. The investments in electric vehicles and infrastructure will not only lead to reductions in CO2 emissions, but will drive reductions in ozone, nitrogen oxides, and diesel particulates that harm human health, particularly low-income communities close to major transportation arteries. The increased funding in research and development will develop and demonstrate technologies, such as hydrogen production and advanced nuclear innovation, which will be needed to address some of the most difficult aspects of the energy transition, and will help maintain US global leadership in technical capabilities that will be crucial to expanding energy access while mitigating impacts on the environment.
Stephen S. Greene is a Nonresident Senior Fellow at the Atlantic Council Global Energy Center.
Access to high-speed broadband will enable smart grid services for millions of Americans
The American Jobs Plan takes a holistic approach to revitalizing rural communities. These efforts must start with bridging the digital divide, an area that is given significant attention in the Plan. According to the Federal Communications Commission, nearly thirty million Americans lack access to high-speed internet. While a reliable broadband connection can unlock educational and employment opportunities, it is also critical for energy systems operations. By “building high-speed broadband infrastructure to reach 100 percent coverage,” the Biden-Harris administration will strengthen rural energy security and improve energy efficiency. Smart-grid operations require high-speed broadband connection, especially for energy efficiency services. While some electric cooperatives have taken the lead on investing in this digital infrastructure, for many, the high cost remains a barrier. Access to high-speed broadband could result in significant energy savings for consumers and support more reliable, resilient, and efficient grid operations.
Olga Khakova is Associate Director For European Energy Security at the Atlantic Council Global Energy Center.
Support for energy efficiency is critical to rebuilding the clean energy economy and narrowing US wealth disparities
President Biden’s $2 trillion infrastructure plan is a seriously ambitious undertaking and, if executed to its fullest, has the potential to accelerate the clean energy transition, create millions of jobs, and rebuild a struggling domestic economy. Although the hallmark of the clean energy workforce, the energy efficiency sector has recently experienced substantial job losses in comparison to pre-pandemic levels, shedding over 300,000 jobs between March and December 2020 as a result of the COVID-19 pandemic economic crisis. Biden’s plan mentions energy efficiency six times. In providing federal support and resources for building retrofits and modernizations, the inhabitants of those buildings would not only save on their energy bills—savings that could then be reinjected back into the economy—but hundreds of thousands of jobs would be created in a vital economic sector currently in need of a boost. Beyond homes and commercial structures, Biden intends to apply energy efficiency solutions to public buildings across the country, from schools to hospitals to care facilities to veteran centers to government office buildings. And such an effort would also serve to advance social equity; many low-income families live in poorly insulated housing with older energy inefficient appliances, with over 10 percent of Americans spending one-tenth of their earnings just on utility bills. A sweeping effort to provide working families, particularly communities of color, with support in retrofitting their homes with critical weatherization services would generate important cost savings, stimulate the economy, and help narrow the US racial wealth gap. If President Biden hopes to rebuild the economy, create jobs, rectify historic injustices, and battle climate change, then ambitious energy efficiency goals are an effective policy focal point.
Zachary Strauss is an Assistant Director at the Atlantic Council Global Energy Center.
Innovation, industrial decarbonization, and environmental justice are what make this plan different
Infrastructure week has finally come, and it certainly has not disappointed. President Biden’s approximately $2 trillion infrastructure plan checks many of the boxes that climate advocates have prioritized, and it would prepare the country to rapidly decarbonize and to do so equitably. Beyond the big-ticket items like modernizing US power, building transportation infrastructure, and establishing a Clean Electricity Standard (the list goes on), two notable priorities stand out. First, the plan prioritizes innovation through huge support for clean technology research and development and demonstration (RD&D). The $35 billion proposed for climate and clean energy technology R&D marks a massive increase in public support for innovation, which will be critical not only for domestic decarbonization, but also for US competitiveness in the global clean energy industry. And $15 billion for demonstration projects across a range of promising technologies—from advanced nuclear to carbon capture to hydrogen—will help innovative technologies bridge the technological “valley of death” and reach the market more quickly. Second, the plan makes a point to marry industrial decarbonization with environmental justice by proposing hydrogen and carbon capture projects specifically in distressed communities that suffer from industrial pollution and that would particularly benefit from the economic development generated from new, green, and innovative industries. These two pieces of the plan—though less flashy than some of the top-line items—effectively advance the administration’s goals of decarbonization, economic growth and competitiveness, and justice. It is difficult to overstate the impact that this trifecta, and the plan as a whole, will have on the US energy system and industry.
David W. Yellen is an Assistant Director at the Atlantic Council Global Energy Center.
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