Clean Energy Stands to Win Big with Biden Administration’s Proposed Infrastructure Plan
On March 31, 2021, President Biden released his $2 trillion infrastructure plan (the “Infrastructure Plan”) intended to target grid modernization, energy efficiency, and renewable energy development as part of the Administration’s ongoing effort to achieve a net-zero emissions power sector by 2035, and net-zero economy by 2050. In response to the recent Texas power crisis, the Infrastructure Plan proposes a $100 billion investment to modernize the electric grid with at least 20 GW of high-voltage capacity power lines. The Biden Administration also proposes creation of a Grid Deployment Authority at the Department of Energy to leverage existing rights-of-way and support creative financing tools to encourage high-voltage transmission lines.
The Infrastructure Plan proposes a 10-year extension and phase down of an expanded direct-pay investment tax credit and production tax credit for clean energy generation and storage. The Biden Administration also proposes creation of an Energy Efficiency and Clean Electricity Standard (EECES) aimed at cutting electricity bills and electricity pollution, increasing competition in the market, incentivizing efficient use of existing infrastructure, and leveraging the carbon-free energy provided by nuclear and hydropower resources. Electric vehicle (EV) development is a key aspect of the plan, with an investment of $174 billion toward building a network of 500,000 EV chargers by 2030, replacing 50,000 diesel transit vehicles, and electrifying at least 20 percent of the school bus fleet.
Environmental justice issues remain at the forefront of the Biden Administration’s agenda, with the Infrastructure Plan proposing a $5 billion investment in remediation and redevelopment of Brownfield and Superfund sites in disadvantaged communities. Consistent with this effort, the Infrastructure Plan proposes a $10 billion investment in public land and water conservation, community resilience, and advancing environmental justice through a new Civilian Climate Corps. The Infrastructure Plan also calls for retrofitting residential, commercial, and municipal buildings to be energy efficient and electrified and a $27 billion Clean Energy and Sustainability Accelerator to mobilize private investment into distributed energy resources and clean transportation. The Administration hopes to stimulate the fossil-fuel industry workforce by allocating $16 billion toward plugging orphan oil and gas wells and cleaning up abandoned mines.
Building on the themes from President Biden’s clean energy plan, he is calling for a $35 billion investment in climate and innovation research and development. This effort includes launching ARPA-C to develop new methods for reducing emissions and building climate resilience, a $5 billion increase in funding for other climate-focused research, and $15 billion in demonstration projects such as utility-scale energy storage, carbon capture and storage, hydrogen, advanced nuclear, EVs, floating offshore wind, and biofuel products.
The Infrastructure Plan faces Congressional hurdles and lengthy debate in the coming months.