President Biden's American Jobs Plan takes a big step forward on the path to a clean energy future. But we'll need more to complete the journey.

The American Jobs Plan Takes Next, but not Last, Step on Clean Energy

, senior energy analyst | April 1, 2021, 2:03 pm EDT
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This post is a part of a series on Clean Energy Momentum

President Biden’s new American Jobs Plan includes spending proposal on a wide range of infrastructure needs across the nation, many of them critically overdue. Eliminating the dangers of lead water pipes, repairing crumbling roads and bridges, and building the resilience of our communities to the myriad threats they face. It also includes a long overdue and critical down payment on our clean energy future. Combined with President Biden’s new push to develop the nation’s offshore wind resources this is a big step forward on the path to a clean energy future. But it is not as big and comprehensive as we need to swiftly decarbonize and address the urgency of climate change.  

What’s in it for the clean energy economy?

President Biden’s ambition to rebuild and grow the clean energy economy rests primarily on one proven policy tool – the tax credit – complemented by investments to improve the efficiency of buildings, leverage the purchasing power of the federal government, get funding to disadvantaged communities and support research and development of the next generation of technologies.

All told, if you include the nearly $400 billion for retrofitting the nation’s building stock, the proposed investments roughly add up to somewhere close to $900 billion. A solid investment for sure. Another $400 billion of that comes from the impact of extending clean energy tax credits for the next decade – not included in the announced cost of the package because the impact of the tax credits is netted out with other tax proposals, including the elimination of various fossil fuel tax breaks and loopholes.

As I said: tax credits are a proven policy tool. Combined with state clean energy policies they are the most significant driver of renewable energy investments to date. Another thing to note about the tax credits is that they would extend to include battery storage systems and high-voltage transmission projects. Both are long-time asks from the clean energy community, and both will provide necessary flexibility and deliverability for the system to successfully integrate increasing amounts of renewable energy.

What we also need

It is critically important in this moment to accomplish sweeping and significant investments in clean energy and the modern grid necessary to reliably deliver it to consumers, and the American Jobs Plan will tackle key pieces of that work. And it’s great to see more focus in the plan on investments at the community level and a renewed commitment to research and development. But these important pieces alone won’t get us where we need to be.

To decarbonize our electricity supply we need a massive and coordinated build-out of renewable energy resources, doubling or even tripling what’s currently on the grid every few years to achieve our goals and accommodate growing demand. Tax credits will lower the cost of that transition but alone won’t push it at the scale and pace that we need.

Investments in our electric transmission system must accompany the transition to renewable energy to build a reliable, clean, and resilient modern grid. Credit: Oran Viriyincy/Flickr

The transmission system challenge is just as daunting. An MIT study suggests we’d need a doubling of transmission capacity to accommodate the renewable energy resources necessary to decarbonize the electricity supply, and a Princeton Net Zero America study calls for a tripling of transmission capacity to decarbonize.

As with renewables, tax credits for transmission will lower the costs and will get the next tranche of projects moving – both laudable goals – but will only get us so far and not far enough.

What’s truly needed to tackle the challenge is a comprehensive and coordinated national strategy to build a truly clean, equitable, and resilient energy system that can power the 21st century and beyond. That includes important tools like Energy Efficiency and Clean Energy Standard that the American Jobs Plan mentions but doesn’t elaborate on.

It also includes a coordinated approach among federal agencies such as the Department of Energy and Department of Interior, along with state and regional stakeholders, to implement a strategy that taps into the nation’s best renewable energy resources and delivers that clean energy to where it’s needed to run our economy.

Is the American Jobs Plan a solid next step on the path to our clean energy future? Absolutely. And it’s well worth the effort to get it done. But let’s get it done quickly because there’s more work to do.

Oran Viriyincy

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