Priorities for an Infrastructure Plan

On March 10 and 11, industry and government leaders convened online for the American Council on Renewable Energy (ACORE) Policy Forum. Speakers included key policymakers such as Sen. Joe Manchin (D-W.Va.), Chair of the Senate Energy and Natural Resources Committee, Sen. Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, and Secretary of Energy Jennifer Granholm, as well as several energy experts in the public and private sectors. Seeking ways to drive a just transition to a clean energy future, panelists discussed advancing diversity, equity, and inclusion; developing smarter tax policies; and upgrading nationwide infrastructure while repowering the economy.

Energy infrastructure in the United States needs expansion and upgrades to support the Biden-Harris Administration’s clean energy targets of 2035 and 2050. In the panel, “Priorities for an Infrastructure Plan,” energy industry experts discussed how to upgrade grid reliability and resilience while repowering the economy and achieving renewable energy goals. Panelists suggested ways the federal government and private industry could incentivize infrastructure growth and upgrades in transmission and distribution, existing renewable energy sources, and new renewable energy technology.

A large piece of improving grid reliability is building out transmission and distribution projects. Christina Hayes, Vice President of Federal Regulatory Affairs with Berkshire Hathaway Energy, underscored the need for a long-term tax credit that would take effect as soon as possible. This would allow transmission projects, which often take five years or more to complete, to begin now in order to achieve 2035 clean energy targets. In the same vein, Hayes called for siting and permitting consistency, as long-term transmission projects often struggle with rules that change with each administration.

Hayes also pointed out the role that utilities can play in building out transmission. Instead of advocating for federal agencies to build out transmission and distribution, Hayes argued that utilities already have the generation and load forecasting data, engineering expertise, and knowledge of customers and of cost-effective measures needed to drive transmission innovation.

Bill Murray, Senior Vice President of Corporate Affairs and Communications with Dominion Energy, added that the utility model, which promotes universal service and access, would be valuable in providing distributed energy equitably and fulfilling the promises of President Biden’s Justice40 initiative, which commits 40 percent of climate-related federal investments to frontline and disadvantaged communities.

Speakers also discussed the importance of prioritizing existing carbon-free energy sources in infrastructure upgrades. Scott Hennessy, Vice President of Federal Policy with Brookfield Renewable, argued that hydropower is undervalued by the federal government, citing the fact that it does not always qualify as a renewable energy source under the Environmental Protection Agency’s (EPA) Green Power Partnership Program. Hennessey called for tax credits for existing hydropower, in addition to the credits that are available for new generation technologies. Hennessy mentioned that pumped hydropower could also act as storage for the grid, and its development could be encouraged by a tax credit allowing for its long-term build cycle.

Tax credits have encouraged private investment into renewable sources, which is now paying dividends, as in the case of MidAmerican Energy in Iowa. According to Hayes, despite the lack of a 100 percent renewable portfolio standard (RPS) in Iowa, which would require all power sent to customers to be sourced from renewable energy, MidAmerican still generated enough wind power to provide 100 percent of energy on some days.

In terms of new renewable energy technology, speakers returned often to the subject of grid storage. In the United States, storage is only eligible for a federal tax credit when paired with solar power, which Hayes argued has led to a delay in using storage as a transmission asset. A stand-alone tax credit could help storage proliferate. Murray also brought up the federal government’s ability to provide funding for storage research and development (R&D), which could make storage more scalable for widespread use.

From a financial investor’s perspective, Susan Nickey, the Chief Climate Officer for Hannon Armstrong, confirmed that investors are comfortable with the technology of storage, but are often waiting on market reform and contractual revenue streams designated by federal regulation to invest widely.

For nascent technologies like green hydrogen (hydrogen produced using renewable energy), the panelists listed the Department of Energy’s Loan Guarantee Program and solar energy-style tax credits as models for incentivizing technologies that are not yet commercial. Nickey again underscored the need for technology to be commercialized and large-scale before investors will follow projects with capital.

Panelists often cited ways that grid upgrades were on the cusp of deploying widely, but investments are needed across federal and state governments, private industry, and utilities to push upgrades over the finish line. If the United States invests in transmission and distribution projects, existing renewable energy sources, and new generation technology, it can build the upgraded grid that is needed to reliably support a clean energy future.

Author: Rachel Snead

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