Twenty-seven percent of U.S. greenhouse gas emissions come from the electricity sector. If we are to meet reasonable climate goals, that sector will have to drastically reduce emissions and expand as the transportation, industrial, and building sectors (which combined account for 62 percent of U.S. greenhouse gas emissions) electrify.
In the fact sheet accompanying the American Jobs Plan, the administration proposes two policies to address that challenge: a “targeted investment tax credit that incentivizes the buildout of at least 20 gigawatts of high-voltage capacity power lines” and an Energy Efficiency and Clean Energy Standard to move “toward 100 percent carbon-pollution free power by 2035.”
It’s a head-shakingly weak proposal.
Understandably, we need more transmission. And new transmission is almost impossible to build. Frankly, current state and federal regulations make it impossible to build the transmission we need to meet climate goals.
But to propose an investment tax credit to fix the problem is an Orwellian energy policy. The regulations are too strict. So we’re going to provide tax dollars to overcome the regulations?! Absolutely not. We must change regulations to make it easier to build transmission across government and private property. This will require strong eminent domain authority, which will result in a lot of available capital to construct new transmission lines.
Also, a clean energy standard that comes even close to net-zero emissions from the electricity sector by 2035 is impossible. That would require eliminating the 59 percent of U.S. electricity generation that currently comes from fossil fuels (or 19 percent coal and 40 percent natural gas) except to the extent that generation can be offset by carbon capture, utilization and storage (CCUS).
A lot could be said about the state of CCUS technology and the need to build CO2 pipelines, which face siting hurdles comparable to electricity transmission lines, but let’s examine the legislative mechanics.
The deal-making needed to craft a net-zero-by-2035 clean energy standard would be extraordinary. Of course, natural gas and coal producers would object. A few renewable- or nuclear-rich utilities would be supportive but want an out in case they couldn’t meet the standards. The coal-dependent rural utilities would want to be exempt. Municipal utilities would have their own interests. Northeast utilities would want a standard compatible with their existing regional greenhouse gas regime. The government’s own Bonneville Power Administration could meet the standard, but the Tennessee Valley Authority couldn’t meet that timeframe. Texas would want its usual exemption. And a standard would have to reflect regional differences in the availability of low-emissions generation options.
One can imagine policy deals to accommodate individual interests, but concessions in one area would require stricter limits in others to still achieve net-zero emissions, resulting in good actors bearing unfair cost. Negotiators wouldn’t even get close enough to a deal for it to inevitably unwind.
Based on my experience staffing legislative mark-ups and conference committees, the deal space for a net-zero-by-2035 clean energy standard is a null set.
And dispositively, the Senate Committee on Energy and Natural Resources has jurisdiction over the Federal Power Act and is led by able senators from West Virginia and Wyoming. There is no overlap between a clean energy standard they might support and a clean energy standard that would achieve net-zero emissions by 2035.
There will be supporters in Congress of an investment tax credit for transmission. Transmission companies will support the proposal, of course. It’s free money while they continue trying to improve the regulatory obstacles. And utilities will engage on a clean energy standard. It’s good messaging and gives energy lobbyists a lot to fight over.
But the most interesting question about the net-zero-by-2035 clean energy standard is: What’s next after this inevitably doesn’t occur?