Author: Catherine Morehouse Published: 3/3/2020 Utility Dive
The bill would include 17 demonstration projects for advanced nuclear, carbon capture, long duration storage and geothermal, moving away from the Trump administration’s more research-focused funding.
Flickr; Tim Evanson
A comprehensive Senate energy package has a better chance than most energy bills of getting through Congress, according to some policy watchers. But opposition from groups opposed to its inclusion of fossil fuels and exclusion of tax credits for renewables and electric vehicles may present challenges.
The bill’s text was unveiled Thursday by Senate Energy and Natural Resources (ENR) Chair Sen. Lisa Murkowski, R-Alaska, and ranking member Sen. Joe Manchin, D-W.Va. It includes 555 pages that combine almost 50 energy bills reported by the Senate in 2019, and address everything from nuclear energy to carbon capture to renewables.
The comprehensive bill presents critical federal aid to a power sector faced with the Herculean task of mid-century decarbonization, according to supporters. And its bipartisan backing presents a rare opportunity to modernize federal energy policy, which hasn’t been updated in such a broad manner since the Energy Independence and Security Act was passed in 2007.
The bill’s prospects in the House appear positive as well, but there are reservations.
Bipartisan overlap on policies around energy storage, carbon capture, nuclear and renewables already exists in the House, staff from the House Science, Space and Technology Committees and Senate ENR said during a Feb. 27 webinar hosted by the Center for Climate and Energy Solutions (C2ES).
“There’s a strong foundation to work with in terms of getting something to the house floor and then to the president’s desk,” Brad Townsend, managing director for strategic initiatives at C2ES, told Utility Dive.
But critics note that its clean energy and climate policies don’t go nearly far enough, and provisions that would expand mining could undermine any environmental progress the bill might otherwise make. Environmental and energy efficiency groups have been the biggest opponents.
“This bill includes a number of small bore proposals, some productive and some detrimental. It also incorporates some egregious non starters such as a provision to vastly expand the permitting of destructive mining operations, as well as an expansion of fracked gas exports,” Sierra Club Legislative Director Melinda Pierce said in a statement.
Bringing elusive dispatchable, zero-carbon resources to scale
The focus on getting zero-emission, dispatchable technologies to scale is one of the most critical issues facing the power sector, utility executives have noted. As the sector embraces increasingly ambitious carbon-free electricity goals, it is banking on one or more of those potential technologies reaching commercial scale, whether that be hydrogen, advanced nuclear, carbon capture, long-duration energy storage or a combination of them all.
“What we’re hearing over and over from utilities is that …. they don’t have the technologies they need to get all the way to zero [carbon]. And so in our view, this bill really takes on that challenge,” Rich Powell, executive director of conservative clean energy group ClearPath Action, told reporters during a Monday press call on the bill.
The Trump Administration has traditionally shied away from demonstration projects, a strategy that stops short of funding pilots under the belief that deployment should be left to the private sector. But this bill moves away from that approach and the idea that the federal government can spur rapid decarbonization through research funding alone.
The legislative package would call for deploying two new nuclear reactors by 2025 and another by 2035; five carbon capture projects by 2025, split between coal and natural gas to ensure at least two for each fuel; five grid-scale storage projects that include different technologies by 2025; and four geographically diverse geothermal projects by 2025.
“There’s a real … focus on demonstration projects, which … really stands out as both really impactful and also sort of novel relative to where the conversation has been in the last few years,” said Townsend.
“Expecting the private sector to be able to take really big risks on [clean energy] technologies, especially given the uncertainty in the long-term policy environment … is not really realistic and certainly not in line with what we have heard from companies,” he said.
It is important for the United States to be a leader in advanced nuclear technology, particularly as China and Russia are “surging ahead” in the advanced and small reactor space, Powell said. The bill would also address smaller barriers to carbon capture and geothermal by including a focus on natural gas power plant retrofits, and expanding the geographic footprint of geothermal pilots eastward.
“They could hugely expand the footprint of geothermal so you can start thinking about doing a lot of this east of the Mississippi, which has not been traditionally where those [projects] are located,” said Powell. That “could bring renewable geothermal energy to a lot of the parts of the country where a lot of other renewable resources are a little challenged.”
Including technologies like nuclear and leaving room for natural gas and coal under the promise of carbon capture has allowed the bill to garner support from a wide range of industry groups including the Nuclear Energy Institute, coal advocacy group America’s Power, the American Gas Association and Edison Electric Institute.
“We believe the most realistic way to address greenhouse gas … emissions is through a technology-centric strategy. To be successful, such a strategy must be based on sustained investments, as well as allow adequate time to develop and deploy those technologies. The American Energy Innovation Act … is consistent with this strategy because it promotes innovative and transformational technologies like carbon capture, utilization and sequestration,” America’s Power CEO Michelle Bloodworth told Utility Dive in an email.
Bill barriers
Solar and energy storage groups expressed more tentative support. Though those groups support a lot of the bill’s efforts, they’d like to see a tax credit added for solar, storage and electric vehicles.
“We do think additional legislative work is needed on tax and climate policy, among other energy-related issues,” Erin Duncan, vice president of congressional affairs for the Solar Energy Industries Association, said in an emailed statement. But the group appreciates the bill’s “support for short-, mid- and long-term innovation” in the solar industry, as well as its focus on cybersecurity, grid security and energy storage, she added.
The Energy Storage Association similarly expressed support for certain aspects of the bill such as the inclusion of the Better Energy Storage Technology Act, which encourages grid-scale storage deployment, but called for a tax credit addition for the resource.
“In order to realize a modernized, clean grid, it is critical that the Senate take immediate action to provide commensurate incentives for energy storage, as it has with other clean energy technologies. Enacting a standalone energy storage tax credit would benefit all stakeholders,” the group said in a statement.
The American Wind Energy Association did not respond to requests for comment.
But though the tax credits are an important piece of decarbonization legislation, “this package has a lot of really important pieces in it,” said Townsend. “We certainly don’t view the particular focus of this legislation as an impediment or a reason not to take up what we think is a really good bill.”
Environmental and energy efficiency groups have been even more critical, however.
Though the Natural Resources Defense Council supports many aspects of the bill, the package “would undermine bedrock environmental laws, weaken public lands protections and ramp up dirty energy fueling climate change. … That’s unacceptable,” said Alexandra Adams, senior director of federal affairs at NRDC.
“Innovation and R&D of course have a role, but what is urgently needed right now goes beyond research that will have payoffs far down the road,” said Sierra Club’s Pierce. “We need action on deploying the proven clean energy technologies that are reducing emissions today. The most direct way to do that would be advancing clean energy tax incentives for technologies including solar, on and off-shore wind, energy storage, energy efficiency and electric vehicles.”
Of additional concern is the fact that the bill eliminates a provision from a bipartisan efficiency bill that would have updated building efficiency codes.
Those codes “would drive enormous efficiency gains in new homes across the country, making future housing stock more affordable and more sustainable,” Ben Evans, vice president for the Alliance to Save Energy, said in a statement. “That’s a big missed opportunity, and we will continue working with our Republican and Democratic supporters to get these provisions added back to the bill.”
“It’s clear that this package is not everything we would need to deal with climate goals, but it’s a really substantial foundation upon which to build, and a foundation that also is bipartisan,” C2ES President Bob Perciasepe told reporters during the Monday webinar.