[USA] South Carolina regulators reject Duke IRPs

On June 17, 2021, the South Carolina Public Service Commission (PSC) voted 4-2 to reject the integrated resource plans (IRP) submitted by two Duke Energy subsidiaries, Duke Energy Carolinas and Duke Energy Progress.[1] The decision comes ten months after Duke filed its IRPs with regulators in North and South Carolina. The IRPs outlined six pathways for its electricity mix under different carbon policy scenarios. Duke favors the base case without strict carbon regulations. Under this pathway, Duke would add about 8.6 GW of solar and more than 1 GW of storage by 2035. The utility would also add 9.6 GW of new natural gas and close its remaining coal plants.

According to the PSC, Duke’s IRPs failed to meet the standards set in the state’s 2019 Energy Freedom Act, which aims to boost clean energy technologies by requiring utilities to consider procuring all sources of electricity generation. The commission questioned the modeling Duke used to project future natural gas prices as well as its estimation of the ability of solar to meet the state’s energy needs. The PSC’s directive asks the utility to make several changes to its plan related to modeling and energy price forecasts. The PSC requests that Duke’s assessments include 20-year Purchase Power Agreements for third-party solar priced at $38/MWh as a selectable resource, with additional PPA pricing at $36/MWh and $40/MWh. These prices are roughly on par with other 20-year PPAs in the region. A more detailed order is expected in the coming weeks. Once the order is out, Duke will have 60 days to file its modified IRP, followed by a 60-day comment and review period. The PSC then has 60 days to approve or reject the modified IRP.

[1] https://dms.psc.sc.gov/Attachments/Matter/f30b83c7-3382-4d64-b0b6-b59712378b3d

[USA] ERCOT asks residents to use less energy during heatwave

A high number of outages in Texas combined with potential record electricity usage caused the Electric Reliability Council of Texas (ERCOT) on June 14, 2021, to request that residents reduce electric use during peak hours through June 18, 2021.[1] On June 14, 2021, generator owners reported that about 11,000 MW of generation is on forced outage for repairs. Of that generation, 8,000 MW is thermal energy, and the rest is intermittent resources. Typically, the average for thermal generation outages on hot summer days is about 3,600 MW. Roughly 1,200 MW of power was regained overnight on June 14, 2021, when some repairs were done.[2]

According to ERCOT, the peak load reached a new record. On June 15, 2021, the peak load was 69,943 MW, which exceeds the previous June record of 69,123 MW set on June 27, 2018. ERCOT has requested that residents set their thermostat to 78 degrees or higher. The grid operator has also asked that residents turn off lights and pool pumps and avoid using large appliances like ovens, washing machines, and dryers. In addition, residents have been asked to turn off and unplug all unnecessary devices.

[1] http://www.ercot.com/news/releases/show/233037

[2] http://www.ercot.com/news/releases/show/233159

[USA] Federal judge reverses Biden administration pause on new oil and gas leasing on federal lands

On June 15, 2021, Judge Terry Doughty, a federal judge in the U.S. District Court for the Western District of Louisiana, ordered new oil and gas leasing to restart in public lands and waters.[1] The move reverses President Biden’s January 2021 executive order that paused new lease sales during a review of the federal oil and gas program.[2] The review would likely include an assessment of the climate impacts of drilling for federal resources, which could lead to new restrictions on drilling in sensitive areas or higher royalty rates.

Judge Doughty’s preliminary injunction reverses Biden’s leasing pause until the court decides on the arguments in the case, allowing leasing to resume nationwide. The judge said the Department of the Interior had overstepped its authority by halting new oil and gas leasing and cited the legal requirements to offer leasing under the Mineral Leasing Act and the Outer Continental Shelf Lands Act. According to Judge Doughty, federal agencies could cancel or suspend specific leases if they had identified problems but could not suspend leases for a review of the leasing program. He also rejected the Biden administration’s argument that the Department of Interior’s pause on new leases is not a final agency action that could be reviewed under the Administrative Procedure Act[3]. Judge Doughty’s decision is a win for Louisiana Attorney General Jeff Landry (R), who is leading a coalition of 13 attorneys in the case against the Biden administration’s leasing pause. The attorneys argue that the leasing pause could lead to economic harm in their states. The Biden administration cannot move forward until the case is resolved or there are further orders from Doughty, the 5th U.S. Circuit Court of Appeals, or the Supreme Court.

[1]https://naturalresources.house.gov/imo/media/doc/Terry%20Doughty%20June%2015%20Lease%20Sales%20Opinion.pdf

[2] https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/27/executive-order-on-tackling-the-climate-crisis-at-home-and-abroad/

[3] The Administrative Procedure Act governs the way in which administrative agencies of the federal government may propose and establish regulations. The legislation gives U.S. federal courts oversight over all agency actions. Under the Administrative Procedure Act, a court can decide that a final agency action is unlawful and set aside the action if it does not fulfill the legislation’s reasoned decision-making requirement.

[USA] Report: Energy storage deployment could reach 125 GW by 2050

According to a report released on June 1, 2021, by the National Renewable Energy Laboratory (NREL), energy storage deployment could reach over 125 GW of installed capacity by 2050 under modest assumptions—a more than five-fold increase.[1] Depending on cost and other variables, the report, “Storage Future Study (SFS), Economic Potential of Diurnal Storage in the U.S. Power Sector,” estimates that deployment could total as much as 680 GW by 2050. Currently, there is 23 GW of storage capacity in the U.S., most of which is pumped hydropower.

The report’s authors concluded that new storage deployment would primarily start with shorter durations of about four hours, and as costs drop, durations would gradually increase to 12 hours. By 2030, annual battery storage deployment could range from one to 30 GW. By 2050, deployments could range between seven to 77 GW. According to the authors, energy storage will provide the most considerable value when deployed together with solar and given the ability to provide grid services. In the study, researchers added new capabilities to the NREL’s Regional Energy Deployment System (ReEDS) to model the value of diurnal battery energy storage and its offerings to grid services. They modeled two sets of scenarios: one with storage providing multiple grid services and one that restricted the services that storage can provide. The NREL found that not allowing storage to provide grid services like firm capacity and time-shifting would hinder deployment.

[1] https://www.nrel.gov/news/program/2021/grid-scale-storage-us-storage-capacity-could-grow-five-fold-by-2050.html

[USA] ACORE releases new report on benefits of a transmission ITC

On May 13, 2021, the American Council on Renewable Energy (ACORE) released a report that outlines the benefits of a transmission investment tax credit (ITC).[1] The report, titled “Investment Tax Credit for Regionally Significant Electricity Transmission Lines: A Description and Analysis,” was released during a webinar featuring Senator Martin Heinrich (D-NM) and Representative Steven Horsford (D-NV). The transmission tax credit, which would provide tax incentives for transmission development, has been proposed by the senator and congressman in Congress and is included in the Biden administration’s American Jobs Plan.

According to the report, a targeted tax credit is necessary to incentivize the construction of necessary high-voltage transmission infrastructure. A transmission ITC would create upwards of 650,000 jobs, enable an additional 30,000 MW of renewable energy capacity, spur more than $15 billion in private capital investment in the near term, and provide $2.3 billion in energy cost savings for the lower 80% of income brackets. The report also argues that there is currently no other functioning means of funding critically needed large-scale regional and interregional transmission in the U.S. The authors said expanding transmission benefits domestic manufacturing, yields public health and environmental justice benefits, improves grid reliability and resilience, and generates carbon emissions reductions.

[1] https://acore.org/report-transmission-itc-would-create-650000-jobs-spur-15-3b-in-investment/

[USA] Biden administration announces new initiatives to cut building emissions and create jobs

On May 17, 2021, the White House announced new federal investments to energy efficiency in buildings and new opportunities to modernize buildings while creating new jobs.[1] The plans include developing the first building performance standards (BPS) for federal buildings. The new BPS will be spearheaded by the Council on Environmental Quality (CEQ) and will establish metrics, targets, and tracking methods to reach federal carbon emissions goals. The Department of Energy (DOE) announced that it will invest $30 million into workforce initiatives designed to train people to develop and construct high-performance buildings. In addition, the DOE is launching a low-carbon buildings pilot program, and in coordination with the Department of Housing and Urban Development, the program will partner with 55 commercial, industrial and multifamily organizations to participate and share lessons about constructing and developing energy-efficient buildings. The DOE also announced a new initiative in partnership with the Advanced Water Heating Initiative to increase market adoption of heat pump water heaters in residential and commercial buildings.

The Environmental Protection Agency (EPA) said that it is launching new residential and commercial sector partnerships to accelerate efficiency and electrification retrofits in underserved residential households through the ENERGY STAR Home Upgrade program. The White House also announced new ENERGY STAR standards to improve heat pump technology and fast chargers for electric vehicles.

[1] https://www.whitehouse.gov/briefing-room/statements-releases/2021/05/17/fact-sheet-biden-administration-accelerates-efforts-to-create-jobs-making-american-buildings-more-affordable-cleaner-and-resilient/

[USA] Agilitas Energy to begin pre-construction activities on largest battery energy storage system in Rhode Island

On May 6, 2021, Agilitas Energy announced that it is starting pre-construction work on its 3 MW/9 MWh lithium-ion battery storage system in Pascoag, Rhode Island, which will be the largest battery energy storage system in the state.[1] The battery storage project will provide peak shaving services to the Pascoag Utility District, a quasi-municipal, “not-for-profit” utility that serves 4,800 customers, and ancillary services to ISO-New England (ISO-NE). According to Mike Kirkwood, the general manager of the Pascoag Utility District, the project will allow the District to modernize its infrastructure and avoid a more costly transmission line reconstruction project. The project is Agilitas Energy’s first battery energy storage system in Rhode Island and is slated to enter commercial operation by Q2 2022.

In 2020, Rhode Island’s then-governor Gina Raimondo signed an executive order committing the state to meet 100% of its electricity demand with renewables and non-fossil fuel resources by 2030. According to Agilitas Energy, battery storage could enable the state to meet its climate goals by storing electricity generated by renewable energy sources for use at another time. Additionally, the company stated that its system would enable flexibility and result in cost savings for end consumers.

[1] https://agilitasenergy.com/agilitas-energy-to-commence-construction-of-largest-bess-in-rhode-island/

[USA] Biden signs executive order to bolster federal cybersecurity

President Biden signed an executive order on May 12, 2021, to strengthen cybersecurity in the U.S. and protect federal networks.[1] The executive order, titled “Executive Order on Improving the Nation's Cybersecurity,” comes in the aftermath of the ransomware attack that shut down the 5,500-mile Colonial oil pipeline on May 7, 2021. Colonial is the largest gasoline pipeline in the U.S. and supplies an estimated 40-45% of all fuel used on the East Coast. As of May 13, 2021, Colonial has restarted operations of the pipeline, but the brief shutdown caused widespread uncertainty.[2]

The executive order’s main directives are to 1) set more rigorous IT and cybersecurity policy, 2) remove barriers to information sharing among federal agencies, 3) modernize federal government cybersecurity, 4) enhance software supply chain security, 5) establish a cybersecurity safety review board, 6) standardize the federal government’s response to cybersecurity vulnerabilities and incidents, 7) improve detection of cybersecurity issues on federal networks, 8) improve the federal government’s investigative and remediation capabilities, and 9) adopt national systems security requirements. The Cybersecurity Safety Review Board will be co-chaired by the government and the private sector and will analyze lessons learned from major cybersecurity incidents. Although the order does not apply to the private sector, private companies will need to increase their own security to contract with the federal government.

[1] https://www.whitehouse.gov/briefing-room/statements-releases/2021/05/12/fact-sheet-president-signs-executive-order-charting-new-course-to-improve-the-nations-cybersecurity-and-protect-federal-government-networks/

[2] https://www.colpipe.com/news/press-releases/media-statement-colonial-pipeline-system-disruption

[USA] DOE announces 100-day plan to address threats to the electric grid

On April 20, 2021, the Department of Energy (DOE) launched a 100-day plan to increase the cybersecurity of electric utilities’ industrial control systems (ICS) and protect the electric grid as a part of the Biden administration’s effort to safeguard critical infrastructure in the U.S against threats.[1] The initiative is a coordinated effort between the DOE, the electric industry, and the Cybersecurity and Infrastructure Security Agency (CISA). In partnership with electric utilities, the DOE’s Office of Cybersecurity, Energy Security, and Emergency Response (CESER) will advance technologies and systems that will provide cybersecurity capabilities for ICS of electric utilities. The 100-day plan will encourage the implementation of measures or technology that “enhance their detection, mitigation, and forensic capabilities;” include milestones throughout the initiative for identification and deployment of technologies and systems that facilitate near real-time situational awareness and response capabilities in ICS and operational technology (OT) networks; reinforce the cybersecurity of critical infrastructure information technology networks; and include a “voluntary industry effort” to improve threat visibility in ICS and OT systems.

The DOE also released a new Request for Information (RFI) to seek stakeholder recommendations for supply chain security in U.S. energy systems. In addition, the DOE announced that it is revoking the "Prohibition Order Securing Critical Defense Facilities.” The prohibition order, which the Trump administration issued in 2020, blocked utilities that supply critical defense facilities from procuring certain types of bulk power system equipment from China.

[1] https://www.energy.gov/articles/biden-administration-takes-bold-action-protect-electricity-operations-increasing-cyber-0

[USA] Biden administration sets a goal of 50% emissions reduction by 2030

On April 22, 2021, President Joe Biden announced that the U.S. will reduce greenhouse gas (GHG) emissions 50-52% below 2005 levels by 2030.[1] The goal was decided through a government process that included the National Climate Task Force, which was formed when the U.S. re-entered the Paris Accord. The 2030 goal advances previous targets set by former President Barack Obama to reduce emissions up to 28% below 2005 levels by 2025. While many details on the new 2030 emissions target have not been released, the plan is consistent with the administration’s efforts to reach net-zero emissions in the power sector by 2035. The announcement was made on the first day of the Leaders Summit on Climate, a two-day virtual summit hosted by President Biden that is expected to include 40 foreign leaders. The event also included executives from financial institutions like the World Bank, union officials, green energy companies, and entrepreneurs.

[1] https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/22/fact-sheet-president-biden-sets-2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and-securing-u-s-leadership-on-clean-energy-technologies/

[USA] Biden’s budget proposal includes major increases in overall clean energy spending

On April 9, 2021, President Joe Biden sent a preliminary outline of his budget request for Fiscal Year 2022 to Congress.[1] The $1.52 trillion budget request included new climate change investments, totaling more than $14 billion more compared to FY2021, across nearly all agencies. This is the first time that a budget request has detailed funding of specific climate programs. The administration is requesting a 10.2% increase to $46.1 billion for the Department of Energy (DOE), a 21.3% increase to $11.2 billion for the Environmental Protection Agency (EPA), and a 16.3% increase to $17.4 billion for the Department of the Interior (DOI). At the DOE, funding for clean energy programs includes $1.9 billion to support the development of a new energy efficiency and clean electricity standard, provide local grants to incentivize clean energy workforce support, and support the development of streamlined transmission. For the EPA, funding requested by the administration includes $110 million to restore EPA staff capacity to pre-Trump administration levels and $1.8 billion in programs to reduce greenhouse gas emissions. Biden’s budget request for the DOI includes $450 million to remediate orphaned oil and gas wells, remediate mining sites, and develop new jobs.

Proposed clean energy spending in other agencies includes $6.5 billion to the Department of Agriculture to spur rural clean energy projects and $300 million to the General Services Administration to electrify its vehicle fleet. The budget request follows the April 2021 release of the administration’s $2 trillion infrastructure plan, which proposed a federal clean electricity standard[2] and expanding clean energy tax credits. Both the budget request and the infrastructure plan are intended to put the U.S. on a path to achieve net-zero emissions by 2050.

[1] https://www.whitehouse.gov/wp-content/uploads/2021/04/FY2022-Discretionary-Request.pdf

[2] A clean electricity standard requires a percentage of retail electricity sales to come from low- and zero-carbon electricity sources. The share of clean electricity typically increases with time. Clean electricity standards are similar to renewable portfolio standards, which require that a certain percentage comes from renewable sources.

[USA] California Energy Commission announces $50 million project for zero-emission trucks and bus infrastructure

During a virtual event held on April 13, 2021, the California Energy Commission (CEC), the state’s primary energy planning and policy agency, announced the approval of a $50 million multi-year project to add sites for recharging or refueling zero-emission buses and big trucks.[1] The Energy Infrastructure Incentives for Zero-Emission Commercial Vehicles (EnergIIZE) project will use a “concierge-like model” to work directly with private companies and local transit agencies to help plan and fund charging and hydrogen fueling infrastructure additions. CALSTART, a nonprofit consortium focused on the clean transportation industry, will administer the first-of-its-kind project. CALSTART will receive an initial $17 million to design and launch the project, with additional funds subject to annual approval from the state budget and the CEC. Tetra Tech Inc., CALSTART’s long-term incentive program administrator, and GRID Alternatives, a non-profit that manages clean energy programs in low-income communities, will be a part of the project team.

The EnergIIZE project is funded by the CEC’s Clean Transportation Program, which invests more than $100 million annually to support research, development, and deployment of advanced transportation and fuel technologies. According to the CEC, the EnergIIZE project will benefit at-risk communities by meeting the infrastructure needs of companies and public agencies committed to adding clean battery-electric and hydrogen equipment. The project will also help advance Governor Gavin Newsom’s goal of 100% zero emissions from medium-duty and heavy-duty vehicles by 2045.

[1] https://www.energy.ca.gov/news/2021-04/energy-commission-announces-nations-first-incentive-project-zero-emission-truck

[USA] Marine energy industry sets deployment goal of 1GW by 2035

In a new report released on April 14, 2021, the National Hydropower Association (NHA) announced new industry deployment targets of 50 MW by 2025, 500 MW by 2030, and 1 GW by 2035.[1] The report, titled “Commercialization Strategy for Marine Energy,” considers the accelerated commercialization of marine energy technologies that generate electricity from waves, tides, and currents in oceans and rivers, as well as from the ocean's heat cycles. The NHA report follows the release of a Department of Energy (DOE) report on marine energy released in February 2021 that found that the total marine energy resource in the U.S. is roughly equivalent to 57% of U.S. electricity generation in 2019. The NHA report argues that marine energy could be essential for remote areas of the U.S. dependent on fossil fuels by providing zero-carbon power generation without the need for expensive new transmission lines. Marine technologies could also help produce green hydrogen and could be a strong complement to more intermittent renewable technologies.

The NHA report calls for the federal government to accelerate the commercialization of marine energy technologies by increasing financial support for research development, reducing market barriers, and creating financial incentives for marine energy deployment. Specifically, the NHA is looking for substantial new investments in the DOE’s Water Power Technologies Office and the Navy Energy Program, which will accelerate technology demonstration, reduce costs, and increase technology adoption.

[1] https://www.hydro.org/wp-content/uploads/2021/04/NHA_MEC_Commercialization_Strategy_Marine_Energy.pdf

[USA] FPL files 10-year plan that would expand emissions-free energy

Florida Power & Light Company (FPL), a subsidiary of NextEra Energy, filed a Ten-Year Site Plan with the Florida Public Service Commission on April 1, 2021.[1] The plan includes opening a 409 MW solar-powered battery storage facility and seven new solar energy centers by the end of 2021. The solar-power battery storage facility, currently under construction in Manatee County, will be the largest facility of its kind in the world. According to FPL, zero-emissions sources will generate 40% of its power by the end of the decade, a more than 65% increase from 2020. Under the plan filed with the commission, FPL would install 30 million solar panels and have more than 11,000 MW of installed solar capacity by 2030. Currently, FPL is the state’s largest solar producer and has 40 solar energy centers in Florida. By 2030, FPL also plans to have 700 MW of battery storage, a 186% increase compared to 2021.

Regarding coal, FPL has shut down less efficient coal-fired units to save customers millions of dollars, and on January 1, 2021, the company closed its last remaining coal-fired plant in the state. FPL is also currently building the FPL Dania Beach Clean Energy Center, an ultra-efficient power plant in Fort Lauderdale. The company does not currently anticipate the need to build another new natural gas power plant through 2030. For nuclear, FPL plans to request that the Nuclear Regulatory Commission extend the licenses of St. Lucie Units 1 and 2, allowing for up to 20 additional years of operations.

[1] http://newsroom.fpl.com/news-releases?item=126215

[USA] ERCOT report finds weather-related issues were the primary cause of February outages

On April 6, 2021, the Electric Reliability Council of Texas (ERCOT) sent its preliminary report to the Texas Public Utility Commission (PUC) on the causes of generator outages and derates during the February 14-19, 2021 extreme cold weather event.[1] ERCOT’s report follows initial requests for information from generators about why so much generation went offline during the cold weather event. The report found that most of the outages during the event were weather-related outages, which ERCOT defined as outages “explicitly attributed to cold weather,” such as frozen or flooded equipment. During the February 14-19 time period, weather-related issues caused 54% of generator outages, equipment failures caused 14% of outages, and fuel limitations caused 12% of outages. ERCOT estimates that approximately 51,173 MW were forced offline during that period, which is slightly lower than the original estimate of 52,277 MW. ERCOT is still waiting on data for February 10-13, 2021. The grid operator anticipates completing a full report on the event by the end of August 2021.

[1]http://www.ercot.com/content/wcm/lists/226521/51878_ERCOT_Letter_re_Preliminary_Report_on_Outage_Causes.pdf

[USA] NYPA approves major transmission line rebuild

The New York Power Authority (NYPA), the largest state public power utility in the U.S., announced on March 30, 2021, that it had approved the Northern New York Priority Transmission Project (NNYPTP).[1] NYPA also announced that it had selected National Grid as a co-participant to help rebuild transmission lines in the northern part of New York. The NNYPTP is a significant transmission line rebuild that will improve New York’s power grid resiliency and help the state meet its aggressive clean energy goals. The project includes completion of NYPA’s Smart Path Moses-Adirondack project, rebuilding approximately 45 miles of transmission in a region known as the Northern Alignment, rebuilding approximately 55 miles of transmission in the Southern Alignment, and expanding several substations. According to NYPA, the NNYPTP will enable more than 1 GW of wind and hydropower deliveries from the northern region of New York to the central part of the state. It will also avoid more than 1.16 million tons of carbon emissions annually, save $447 million in annual transmission congestion costs, and create hundreds of jobs. NYPA’s approval of the project allows for engineering and planning work to begin in preparation for the New York State Public Service Commission’s environmental review and approval process. NYPA expects to begin construction on the NNYPTP in 2022 and plans to complete the project in about three years.

[1] https://nypa.gov/news/press-releases/2021/20210330-nny

[USA] Entrust Energy files for bankruptcy in Texas amid storm fallout

On March 31, 2021, E&E News reported that on March 30, 2021, Entrust Energy Inc., an electric utility based in Houston, Texas, filed for bankruptcy after the extreme cold weather event in Texas in February 2021 caused electricity prices to soar.[1][2] The company provides electricity to more than 170,000 customers across eight states, including Texas. According to the Chapter 11 petition Entrust Energy filed in the Southern District of Texas, the company has assets of $100 million to $500 million and liabilities of $50 million to $100 million. Entrust Energy claims that it has a $270 million disputed claim with the Electric Reliability Council of Texas (ERCOT), the state’s power grid operator, related to supply obligations. Other claims from the filing include $1.6 million from JPMorgan Chase & Co. for a Paycheck Protection Program loan[3]. In early March 2021, ERCOT barred Entrust Energy from the state’s power market after the company failed to make payments stemming from the February 2021 cold weather event.[4] ERCOT’s filing at the time said that Entrust Energy owed $234 million in payments to generators and others. Entrust Energy’s bankruptcy filing follows bankruptcy filings from Brazos Electric Power Cooperative Inc., Texas’s largest power generation and transmission cooperative, and Griddy Energy LLC, a power retailer.

[1] https://www.bkalerts.com/recent-bankruptcy-cases/texas-southern-bankruptcy-court/4:21-bk-31070/bankruptcy-case-entrust-energy-inc-and-entrust-treasury-management-services-inc

[2] https://www.eenews.net/energywire/2021/03/31/stories/1063728833

[3] The Paycheck Protection Program was established by the CARES Act of 2020 to aid small businesses. The program provides small businesses with loans to pay payroll costs including benefits. The loans can also be used to pay rent, utilities, and interest on mortgages.

[4] https://www.bloomberg.com/news/articles/2021-03-04/a-second-power-provider-defaults-after-texas-energy-crisis

[USA] Biden announces sweeping $2 trillion infrastructure plan

On March 31, 2021, President Joe Biden unveiled a $2 trillion, 8-year infrastructure plan, called the American Jobs Plan, which includes billions of dollars of investment in electric vehicles (EVs), transmission, and clean energy.[1] The plan is intended to create millions of new jobs, rebuild the country’s infrastructure, and position the U.S. as a global leader. According to the administration, the proposal would put the U.S. on the path to achieve 100% clean electricity by 2035 and a net-zero emissions economy by 2050. If signed into law, the plan would be one of the largest federal efforts to reduce greenhouse gas emissions.

Biden’s plan proposes investing $174 billion in EVs, $100 billion in the electric grid, $46 billion in clean energy manufacturing, and $35 billion in research and development to address the climate crisis. The proposal would also create a national Energy Efficiency and Clean Electricity Standard (EECES) to reduce electricity bills, increase market competition, encourage more efficient use of existing infrastructure, and boost carbon-free energy from existing sources like nuclear and hydropower. For tax credits, the administration proposes extending the tax credit phasedown by another decade and expanding tax credits to include a direct pay option for clean energy resources.[2] Biden’s plan also calls for the repeal of subsidies and foreign tax credits for fossil fuels.

[1] https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/

[2] Expanding tax credits to include a direct pay option would allow tax credit holders to receive a direct cash payment from the U.S. Treasury instead of getting benefits through the tax equity market.

[USA] Report: Carbon tax could reduce emissions from federal fossil fuel leasing

In March 2021, the National Bureau of Economic Research (NBER) released a new working paper titled “Climate Royalty Surcharges.” The paper proposes potential carbon fees that could be added onto existing royalty rates to increase revenue from the federal fossil fuel leasing program and lower greenhouse gas emissions.[1] On January 27, 2021, President Biden issued Executive Order 14008, which paused new oil and gas leases on federal lands and waters while the administration reviews the environmental impacts of the federal leasing program. This review includes considering “whether to adjust royalties associated with coal, oil, and gas resources extracted from public lands and offshore waters, or take other appropriate action, to account for corresponding climate costs.”

Set in 1920 when the leasing program was established, the royalty rate on revenue generated from onshore oil and gas leases is 12.5% (18.75% offshore). Half of the revenues are allocated to the state the lease is in. According to the report, the program is projected to generate an average of $9.6 billion/year from 2020 to 2050 under the current rates, assuming the pause is lifted. However, a "climate surcharge" for fossil fuel leases of $22 per ton of CO2 equivalent would generate an estimated $14.2 billion/year on average from 2020 to 2050. It would also reduce emissions by about 32 million metric tons of CO2 equivalent. While $22 per ton of CO2 equivalent generated the most revenue, the report found that higher climate surcharges would further reduce emissions while still generating more revenue than current rates. In total, the paper’s proposed surcharges would bring royalties to approximately 39% to 51.5%.

[1] https://www.nber.org/system/files/working_papers/w28564/w28564.pdf

[USA] 13 states file lawsuit against Biden administration over oil and gas leasing plan

On March 24, 2021, 13 states[1], led by Louisiana Attorney General Jeff Landry (R), sued the Biden administration over its restrictions on new oil and gas leasing on federal lands and waters.[2] On the same day, Wyoming filed a separate challenge against the Biden administration in a different federal court.[3] On January 27, 2021, President Biden issued Executive Order 14008 which, among other initiatives, blocked new leasing while the administration conducts a review of the environmental impacts of the federal oil and gas program. The Louisiana-led lawsuit argues that the Biden administration violated requirements under the Outer Continental Shelf Lands Act (OCSLA) and the Mineral Leasing Act (MLA) to develop energy resources on federal lands and waters. According to the lawsuit, Biden’s policy could cause economic harm in fossil fuel-producing states like Louisiana and Texas. It could also cause energy prices to increase, which would indirectly harm the rest of the country. The lawsuit requested that the federal court block actions that relied on the executive order and allow the Bureau of Land Management (BLM) to restart quarterly oil and gas lease sales.

[1] Louisiana, Alabama, Alaska, Arkansas, Georgia, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah and West Virginia

[2] http://agjefflandry.com/Article/10878

[3] https://governor.wyo.gov/media/news-releases/2021-news-releases/wyoming-launches-lawsuit-challenging-biden-administrations-federal-leasing