US President Joe Biden has signed into law a $1trn bipartisan infrastructure bill that he is touting as a major step forward in his administration’s policy agenda for climate and clean energy.
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“The bill I’m about to sign is proof that despite the cynics, Democrats and Republicans can come together and deliver results,” said Biden at a signing ceremony at the White House attended by hundreds of elected US, state, and local officials and business leaders.
“I truly believe that 50 years from now, historians are going to look back at this moment and say, ‘That is the moment America began to win the competition for the 21st century’,” he added.
The Infrastructure Investment and Jobs Act includes $550bn in new federal spending over five years that represents an increase over present levels. About $300bn is targeted for public works such as repair and replacement of airports, bridges, highways and drinking and wastewater infrastructure; installation of broadband and to remediate legacy pollution from coal mines and oil fields.
The balance of funding is for investment in some areas of the economy that Biden contends are critical for an eventual comprehensive climate solution.
These include $66bn for passenger and freight rail; $65bn for power and electric grid, assessment of minerals and supply chains for clean energy technology, and carbon capture and clean energy demonstration projects; $47.2bn for cybersecurity and climate change mitigation and resiliency; $39.2bn for public transit, and $15bn for clean ferries and school buses and new electric vehicle charging infrastructure.
Within power and grid, the new law directs the Department of Energy (DoE) to establish a grant programme with $5bn funding to support activities that reduce the likelihood and consequence of impacts to the electricity network due to extreme weather, wildfires, and natural disaster.
Another $5bn is for federal assistance to demonstrate innovative approaches to transmission, storage, and distribution infrastructure to harden local and regional resilience and reliability, partly with a focus on rural areas where new long-haul, high-voltage power lines are necessary to link abundant low-cost wind and solar resource with load centres.
A new transmission facilitation programme will have a $2.5bn revolving loan fund to allow DoE to serve as an “anchor tenant” for a new clean energy transmission line or to upgrade an existing one. DoE can also buy up to 50% of the planned capacity that it may sell after determining the project has ensured financial stability.
The law also directs DoE to study capacity constraints and congestion when designating so-called National Interest Electric Transmission Corridors to facilitate construction of interstate clean energy power lines.
In a related area, the law establishes a federal goal of permitting clean energy-related infrastructure projects within two years that include transmission and offshore wind.
Importantly, the bill creates a new Office of Clean Energy Demonstrations at DoE with an initial $21.5bn in funding authority. This includes $8.3bn to fund multiple clean energy and carbon capture pilot projects, some too risky for private capital.
Another $9.5bn is for clean hydrogen programmes including creation of four regional hubs to demonstrate the production, processing, delivery, storage, and end-uses.
The law also recognises US supply shortcomings with rare earth elements and other critical minerals required for the manufacturing of batteries and clean energy components. It authorizes $320m to complete an initial “comprehensive national modern surface and subsurface mapping and data integration effort to better understand our domestic mineral resources.”
There is also more than $7bn in funding to support development of a supply chain for batteries for “clean, affordable, and resilient energy and transportation options.”
Elsewhere, the law amends the Outer Continental Shelf Lands Act to permit offshore energy storage. This move is expected to provide flexibility for the incorporation of energy storage in future offshore wind projects along the east coast.
Clean energy industry reaction
Clean energy groups hailed the new law as addressing a pressing national need, citing the critical role that infrastructure will play if the country is to achieve carbon net-zero by 2050, the goal set by Biden.
“The American Clean Power Association applauds President Biden and bipartisan Congressional leaders for making a historic and long overdue investment in America’s infrastructure,” said CEO Heather Zichal, calling it a “major victory for Americans”.
Gregory Wetstone, CEO of the American Council on Renewable Energy, said the law “puts in motion critical upgrades to our nation’s antiquated electric transmission infrastructure, an essential component of achieving a modern and decarbonised grid”.
Highlighting the $17.4bn in funding for waterway and coastal port infrastructure, the National Ocean Industries Association (NOIA) noted that the law is a milestone that will support the fast-growing US offshore wind sector.
“Our ports are the gateway to our nation’s offshore wind opportunity. Access to the capital will help ports invest and improve their operational capabilities in support of American offshore wind and the generational opportunity it provides,” said NOIA CEO Erik Milito.
Earlier this month when the bill cleared Congress, the Edison Electric Institute, which represents investor-owned electric companies, said it provides an “important down payment” on the EV charging infrastructure and low/no emission buses “that will help to accelerate the electrification of the transportation sector, which currently is the largest source of carbon emissions in the US economy”.