As the recent Intergovernmental Panel on Climate Change report confirmed, we must move much faster to clean up our energy system to avoid the worst consequences of climate change. International Energy Agency and Energy Innovation research both show the best path to this goal is reaching zero-emissions electricity in the United States by 2035 – a central tenet of President Biden’s climate strategy since July 2020.
Numerous scientific studies agree we can affordably achieve a reliable 80% clean energy grid by 2030 with existing technology, which puts the U.S. on track for 100% clean energy by 2035. The studies also show an 80% by 2030 clean grid would generate up to $1.5 trillion in new clean energy investments and prevent an estimated 317,500 premature deaths.
But the path to reaching 100% clean electricity is still uncertain – is expanding transmission the answer? Should we focus on massive renewable energy projects or small-scale clean energy resources? Will a clean energy grid be resilient in the face of increasingly extreme weather?
Technology won’t clean our grid by itself. Realizing these benefits requires smart federal policy to modernize our grid, overcome roadblocks to deploying renewables, and withstand the climate-related weather events putting greater stress on the grid. The bipartisan infrastructure deal provides a foundation for these investments, with more impactful climate-oriented policies like a Clean Electricity Payment Program proposed in the current Senate Budget Resolution.
To learn how federal state policy help the clean energy industry rapidly reduce power sector emissions, Energy Innovation’s Deputy Director of Communications Sarah Spengeman interviewed Greg Wetstone, President and Chief Executive Officer of the American Council on Renewable Energy (ACORE). Mr. Wetstone outlined how transmission can enable a faster renewables transition, how the infrastructure package can overcome obstacles to building new transmission lines, why transmission and local solutions like rooftop solar play complementary roles in decarbonizing our grid, and the importance of ensuring an equitable energy transition.
Q: Let’s start with the massive $1 trillion bipartisan infrastructure bill. What are the most important ways it will empower transmission to clean up our power grid?
A: The bipartisan infrastructure deal (BID) is a constructive first step in this year’s infrastructure process and contains several provisions to help build the transmission necessary to decarbonize the grid.
Specifically, Section 40105 would provide long-awaited clarity on federal backstop authority in the transmission siting process. While the Energy Policy Act of 2005 established federal authority over transmission siting in certain cases, that authority was subsequently limited by the courts, and the process proved too burdensome to function in practice. Section 40105 would allow the Federal Energy Regulatory Commission (FERC) to issue permits for interstate transmission line construction if a state commission withholds or denies a siting application one year after the date on which the application was filed, or one year after the Secretary of Energy designates the project part of a national interest electric transmission corridor, whichever is later.
The second constructive transmission provision can be found in Section 40106 of the BID. The Transmission Facilitation Program aims to kickstart significant transmission projects by allowing the Department of Energy to buy up to 50% of planned capacity on new lines, essentially acting as an “anchor-tenant” on the project until line capacity becomes more fully subscribed. We’ll be monitoring this innovative program as it moves forward. The impact may be constrained by the size of its borrowing authority, which is currently set at $2.5 billion.
But we should be clear-eyed here. It will be very difficult to achieve our vital carbon reduction targets without an investment tax credit (ITC) for regionally significant transmission in place to help modernize today’s balkanized and antiquated grid infrastructure. We recently helped coordinate a coalition letter to the House Ways and Means Committee from 50 diverse groups requesting the inclusion of a transmission ITC in the Committee’s budget reconciliation package. This policy would help foster the investment needed to expand and upgrade the nation’s high-voltage transmission system on the scale required to meet climate goals at the lowest possible cost to consumers.
Q: Some critics claim expanded federal focus on transmission and utility-scale wind and solar power plants will come at the expense of more local, distributed solutions like rooftop solar. How does ACORE and your membership see this playing out?
A: It is not an either-or proposition. We need to use every tool in the climate toolbox to accelerate the clean energy transition. To decarbonize the power sector by 2035, the U.S. must, conservatively speaking, install about 70 gigawatts of new renewable energy capacity every year – or roughly double the nation’s current rate of deployment.
Getting there does not involve a choice between distributed energy resources like rooftop solar panels with home batteries on the one hand, and large-scale renewable projects with the new transmission lines our grid requires on the other. We need to build a modern electric grid in which large-scale and distributed renewable energy resources are complementary, not competing. We need new transmission lines to help realize the potential of America’s largest renewable resources and strengthen interregional connections, and policies that incentivize distributed resources to enable much-needed flexibility and provide affordable, reliable power, especially when electricity demand is the highest.
Q: We know bigger power plants produce cheaper energy, but what are the key advantages of small-scale clean energy resources? Are these advantages being recognized by federal policymakers and where do you see room for improvement?
A: Small-scale, distributed energy resources play a pivotal role in our nation’s clean energy future, enabling a more efficient, more resilient grid. The renewable sector understands the advantages of a balanced approach, which is why many renewable energy companies are developing both utility-scale projects and distributed energy resources (DERs). These lower-cost, small-scale options are extremely popular with American homes and businesses, which have installed millions of rooftop solar installations over the last few years.
As for where there can be federal improvement, 186 lawmakers recently delivered a letter to House leadership urging the inclusion of a stable, predictable, and long-term clean energy tax platform in the infrastructure package. In our view, this kind of long-term policy support would be foundational for decarbonizing the power sector and would create millions of good-paying American jobs. Businesses need stability and planning, and the history of on-again, off-again tax credits for renewable deployment has clearly slowed growth. The direct pay option the lawmakers called for in their letter would also help ensure the pace of renewable energy deployment is not limited by constraints in the size of the tax equity market that developers now rely on to monetize tax credits. Additionally, we need a speedy and effective implementation of FERC Order 2222, which calls on regional transmission organizations and independent service operators (RTOs and ISOs) to enable DERs to fully compete in the wholesale electricity marketplace.
Q: Extreme weather events are threatening power system reliability across the country. How can transmission strengthen grid resiliency against climate change, and how can federal policy help?
A: Put simply, our electric grid is outdated. As severe weather events become more frequent, we’re seeing firsthand how our current grid infrastructure is increasingly unable to deliver reliable electricity to consumers who need it. Last month, we released a report that details the value additional transmission would have provided during five severe weather events in Texas, the Northeast and the Midwest. For example, more interregional transmission could have saved nearly $1 billion and preserved power for approximately 200,000 Texas homes during the recent freeze associated with Winter Storm Uri.
The analysis demonstrates that we are paying an enormous price for our lack of interregional transmission, and that the benefits of a robust transmission grid would quickly surpass the cost of constructing new lines. Policies designed to reform planning, paying for and permitting interregional transmission lines, including the proposed ITC for high-voltage transmission, realize immense benefits.
Q: How can the clean energy transition lead to a more equitable energy system, in terms of energy burden, local control, and pollution? What policies is ACORE focused on to help improve equity through a clean energy transition?
A: At ACORE, we’re actively working to cultivate a culture of diversity, inclusion and equity within the renewable energy sector. In 2020, we launched the Accelerate membership program to help reduce barriers for participants from underrepresented communities and better ensure that leaders in today’s renewable energy economy reflect the diversity of our society. We also need policies that allow disadvantaged communities to more readily access the benefits and cost-savings associated with renewable power. A predictable clean energy tax platform paired with expanded and updated transmission can deliver renewable power to every community at the lowest possible cost. Additionally, the Comptroller of the Currency recently reformed banking rules under the Community Reinvestment Act (CRA) to allow banks to prove compliance with the CRA by financing renewable projects in low- and moderate-income communities. Finally, the bipartisan infrastructure deal includes forward-looking workforce development policy designed to provide training and career opportunities for all Americans in the rapidly growing renewable energy workforce. Equitable access to pollution-free renewable power and an inclusive renewable energy workforce are central to America’s clean energy transition.
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