A group of 260 companies operating in the US clean-energy sector, including more than two dozen of the top firms in offshore wind, have submitted a letter urging the Congress to pass the beleaguered Build Back Better Act.
The open letter to Democrat Senate majority leader Chuck Schumer and Speaker of the House Nancy Pelosi calls for immediate action on the bill, which contains over $500bn in incentives for renewable energy and climate action, including incentives aimed at overcoming bottlenecks in development the offshore wind sector’s supply chain, port infrastructure, and transmission.
“[The Build Back Better Act] represent[s] a once-in-a-generation opportunity for Congress to take big, bold action to deliver the clean energy future Americans want and deserve,” the letter, which included signatories from offshore wind developers Orsted, Equinor and Atlantic Shores and turbine makers Siemens Gamesa and Vestas, stated. “We stand with you to get that job done.”
The letter was initiated by US industry advocacy body the American Clean Power Association (ACP).
“The Build Back Better Act is more than providing clean power to help us meet our environmental goals, it is also forecasted to generate significant economic activity, including one million good-paying American jobs over the next decade,” said ACP chief executive Heather Zichal in a statement.
“Congress should resume and finalise negotiations on this landmark legislation. The time to act is now.”
Orsted company representative Stephanie Francoeur told Recharge: “Orsted supports passage of these renewable energy policies that will help build an expansive and globally competitive US offshore wind industry and expedite the development of additional US clean energy technologies.
“In addition to creating good-paying jobs and new manufacturing facilities across the US, these policies will combat the looming threat of climate change and help our nation meet its clean energy goals.”
The bill moved through the US House of Representatives last November but stalled in the Senate, which it also must pass in order to become law. With a 50:50 partisan split in the Senate and zero support on the Republican side of the aisle, Democratic efforts were undermined by a single senator, Joe Manchin, from West Virginia, who said that he would be unable to support the bill in its current form due to concerns over the costs of the bill and its risks of raising the US’ already surging inflation.
At a press conference earlier this month marking the first anniversary of his presidency, President Joe Biden revived the effort by proposing to break the bill into smaller “chunks”.
“I’m confident we can get pieces, big chunks of the Build Back Better law signed into law,” Biden said at the time, expressing certainty of congressional support for the more than $500bn in climate change initiatives.
Ed Markey, a Democrat senator from Massachusetts and strong advocate for green energy and climate change mitigation, tweeted his approval for this approach: “I support President Biden in his effort to pass a Build Back Better package that can get 50 votes.”
“The climate and clean energy provisions have been largely worked through and financed. Let’s start there,” Markey added.
The climate provisions of the bill “will more than double clean energy investment to $750bn over the next ten years, supporting one million, good-paying American jobs over the same period of time,” argued the industry letter, which also warned of the risk of foot-dragging.
“The clean energy and manufacturing provisions in the Build Back Better Act must take effect 1 January 2022 to take full advantage of the unprecedented private sector commitment to clean energy projects and to create good paying jobs in every state,” the letter noted, despite the deadline having already passed.
“Each month of delay means an estimated $2bn in lost economic activity.”
The US aims for 30GW of offshore wind capacity by 2030, which the ACP forecasts stimulating $120bn in investment in the regional sector over the next decade, but key pinch-points in transmission and port capacity and an underdeveloped supply chain as well as manpower and vessel shortages risk slowing progress.
“The BBB includes supportive policies to assist in the creation of jobs, local economic development, and critical infrastructure associated with the establishment of a robust U.S. offshore wind industry,” Steven Dayney, head of offshore North America for Siemens Gamesa Renewable Energy told Recharge.
“If the bill is not passed, the buildout of the offshore wind industry and all the supporting infrastructure associated with its development will be delayed. This will affect job creation and economic benefits across multiple states,” Dayney said.
In its current form, the Build Back Better Act directly address many of these hurdles, with nearly $3bn aimed at addressing transmission sector inadequacies, including $2bn in Department of Energy grants for the construction of new high-capacity transmission lines and upgrading grid interconnections, as well as further incentives aimed at research and analysis, siting, and permitting of new transmission lines.
This is on top of the $65bn in the Infrastructure Act passed last fall that aims at a major upgrade of the US’ ageing transmission sector.
The US’ sluggish permitting of projects is a key drag on offshore wind development, and despite a rash of recent approvals for leasing and the promise of 16 construction and operations plan (COP) approvals by 2025, permitting is still a half-decade long process at least.
The Build Back Better Act would offer $100m directly to the Department of the Interior, which manages of development of energy on the outer continental shelf through the Bureau of Ocean Energy Management, “to provide for the development of more efficient, accurate, and timely reviews.”
It adds another $20m for the National Oceanic and Atmospheric Administration under the Department of Commerce, a key partner to BOEM in approving environmental impact statements, to likewise improve the efficiency and accuracy of its permitting.
Tax credits aimed at stimulating growth, raising wages, and encouraging labour union hiring and local manufacturing are likewise key components of the Build Back Better Act.
The failure to pass the billwould undermine Biden’s pledge for the US to reduce greenhouse gas emissions 50-52% from 2005 levels by 2030, which is in line with the Paris Agreement. The country would also be unlikely to achieve his other signature 2030 goals: an 80% decline in utility sector emissions; installation of 30GW offshore wind capacity, and electric vehicles to comprise half of all US automobile sales.
Surprise absentees from the letter included renewable energy transmission solutions supplier Anbaric, developers US Wind and Copenhagen Infrastructure Partners, and turbine OEM GE Renewables.
Regardless of the bill’s passage, the US offshore wind sector will burgeon, say insiders.
“Failure to pass the BBB bill certainly wouldn't kill the industry, but it potentially doesn’t allow it continue to accelerate as it has,” Jonah Margulis, senior vice president at Aker Offshore Wind told Recharge. “There's a tremendous amount of momentum behind the industry, and I don't see that slowing down.”