Joe Biden has pledged a net-zero electricity sector in the US, should he win the Presidential election in November, alongside a whopping $2 trillion to combat climate change through what would be his first term in office. But in the small print, the country will not see a definite end to coal, fracking or investment in failing carbon capture technologies.
In a speech in Washington on Tuesday, the Democratic candidate placed climate-friendly investment at the center of a broader ‘Build Back Better’ economic recovery package, which will include an accelerated $2 trillion investment in carbon-free power and grid infrastructure, mass transit, efficient and sustainable buildings as well as climate-smart agriculture, while also rebooting the US auto industry with 1 million jobs. This $2 trillion in 4 years is a significant advancement on the previous promise for $1.7 trillion over 10 years, which was outlined in the primary several months ago.
“These aren’t pie in the sky dreams” said Biden. “These are actionable policies that we can work on right away.” But with Europe aiming for net-zero by 2050, this is without doubt the most ambitious decarbonization promise at this scale. The US’ electricity accounts for nearly 4% of the energy consumed on earth, and as much as 5% of global emissions. Biden wants the emissions at zero in just fifteen years.
In the plan, you can detect the hand of progressive allies like Jay Inslee, the Washington governor who first proposed the carbon-free electricity milestone to be reached by 2035. However, it does fall marginally short of fulfilling the promises that were set out in the Green New Deal, which called for an economy-wide net-zero by 2030.
It would have been surprising at this point if the plan had outlined exactly where the money would be allocated, but it has gone further than simply throwing a bone to climate-minded voters. Here’s a few take-home points that we’ve taken from Biden’s “Plan to build a modern, sustainable infrastructure and an equitable clean energy future.”
There was always bound to be some name calling and Trump-bashing in any party-political statement, reiterating Trump’s statements calling climate change a ‘Hoax,’ and that ‘Windmills cause cancer.’ But Biden has also outwardly criticized the current President’s decision to rollback much of the Obama-era environmental legislation, referencing the 100 rules being overturned (67 completed and 33 in progress), including those to limit tailpipe emissions from ICE vehicles.
There’s also criticism of how the current administration has failed to facilitate the acceleration of the US’ domestic renewables industry, with Chinese imports dominating the country’s solar market in particular. It identifies that uncertainties and waning support from tax credits for wind and solar have reduced investment in ‘at-home’ business, possibly outlining Biden’s intentions to reinstate or improve schemes like the ITC and PTC, which could include the incorporation of next-generation technologies in battery storage, offshore wind and green hydrogen.
In fact, this is mentioned in quite a rogue segment of Biden’s plan, in reference to job creation in the sector, where he establishes a “technology-neutral Energy Efficiency and Clean Electricity Standard (EECES) for utilities and grid operators,” to cut electricity bills through the energy transition. This, the plan states, will “spur the installation of millions of solar panels – including utility-scale, rooftop, and community solar systems – and tens of thousands of wind turbines – including thousands of turbines off our coasts – in Biden’s first term.” For context, 1,000 offshore wind turbines in today’s market will most likely account for nearly 10 GW of generation capacity. The plan also commits to pursuing more nuclear and hydropower throughout the country.
While investment in renewables is what we want to see, the plan has fallen short of several things that we consider mandatory for a comprehensive climate plan. There’s no mention of a coal phase out and no mention of a fracking ban. Instead, there’s the alarming promise that “Biden will double down on research investments and tax incentives for technology that captures carbon and then permanently sequesters or utilizes that captured carbon, which includes lowering the cost of carbon capture retrofits for existing power plants.”
We’ve stated in the past at Rethink Energy that persisting with natural gas risks $318 billion of lost profits in the power sector by 2050, and that the expense and lacking technical performance of CCUS systems will double this figure, all while the bulk of emissions continue to be pumped out – the Drax plant in the UK currently only has a capture rate of between 10% and 20%. If the US is determined to make use of its existing gas infrastructure, green hydrogen is the only way out, and Biden should instead ramp up his intention to “ensure that the market can access green hydrogen at the same cost as conventional hydrogen within a decade – providing a new, clean fuel source for some existing power plants.”
The seven specific segments of the plan include: Build a modern infrastructure; position the US auto industry to win the 21st century with technology invented in America; achieve a carbon pollution-free power sector by 2035; make dramatic investments in energy efficiency in buildings, including completing 4 Million retrofits and building 1.5 million new affordable homes; pursue an historic investment in clean energy innovation; advance sustainable agriculture and conservation; and secure environmental justice and equitable economy opportunity.
For modern infrastructure, the plan focuses on transport, with plans to further electrify the rail system, while providing zero-emission public transport to municipalities of over 100,000 population. By placing cities at the center of this, opportunities will be greatest for technologies offering high utilization rates, including electrified trains and hydrogen fuel-cell buses, alongside battery-electric taxis and municipal fleets.
Even if Elon Musk has placed his support behind Kanye West’s bid to become President, Tesla will be licking its lips with the promise that Biden aims to place America as the global leader in the manufacture of electric vehicles, and plans to prevent China from undercutting the US market. The US may be hard-pushed here, and this decision may be costly: Chinese EV manufacturer Airways recently took its U5 electric SUVs to market in Europe at around $28,000, with some of China’s domestic EVs closer to the $10,000 price point. For comparison, Tesla’s equivalent Model Y will go on sale in Spring 2021 for $39,000. Biden’s promises so far include rebate incentives to swap old, less-efficient vehicles for cleaner, home-built models, as well as 500,000 public EV charging stations.
Through the plan, standards will also be adjusted such that all new commercial buildings will adhere to a net-zero emissions by 2030, to cut the carbon footprint of the nation’s building in half by 2035.
With the promise of 100% clean energy by 2035, the sector which takes center stage is that of power. Through his first term, Biden will commit $400 billion to federal procurements of clean energy inputs like batteries and electric vehicles, which is noted as twice the cost of the Apollo moon-landing program. This will come with establishment of a new Advanced Research Projects Agency on Climate, which will focus on grid-scale storage at one-tenth the cost of lithium ion batteries, as well as advances in nuclear reactors, green hydrogen production, and CCUS.
The energy transition in the US has so far been extremely state-led, with states like New York and California independently implementing ambitious renewables targets and infrastructure. It’s possible that a movement like this could see more interstate collaboration and federal-led initiatives, and we hope it will. But the reality is that many of the ambitious pillars in Biden’s plan will require congressional approval, which will largely depend on any gains that the Democrats can make in the Senate in the election. If the election can open the path, progress still won’t be guaranteed, and substantial legislation will have to hold up through the 2022 midterm elections and any subsequent shifts in the House or Senate.