Addressing climate change and its effects is one of President-elect Joe Biden’s top four priorities. Growing the clean-energy sector will be necessary to achieve his new administration's goal of economy-wide, net-zero emissions by 2050 at the latest, a 2035 target for a “carbon pollution-free power sector” and plans to rejoin the 2015 Paris Agreement, from which President Donald Trump announced the US would withdraw, an action that took effect on Nov. 4.
That global agreement sets a collective goal of limiting CO₂ rise in the 21st century to under 2° C above pre-industrial levels, with each country submitting specific reductions. The U.S. had initially pledged to cut, by 2025, greenhouse gas emissions to 26%-28% below the 2005 level, as well as strive for an overall 28% emissions reduction.
Rejoining the agreement will likely lead the administration “to put a lot of money into increasing the use of renewable energy, and construction projects will have to factor that into their planning and designs,” says Raymond Lodato, University of Chicago assistant instructional professor in the Environmental and Urban Studies and Public Policy Studies programs.
“Already, red states like Texas are investing heavily in renewable energy despite the lack of direction from the federal government," he says. "Any project currently in the planning stages should be trying to limit the carbon impact of both the construction and the built project as much as possible.”
In a conference call with congressional leaders, the president-elect and members noted the renewable-energy sector’s potential to fuel bipartisan solutions for climate change and the need for well-paying union jobs.
The jobs potential has already generated action, with a Nov. 19 announcement by North America's Building Trades Unions and leading U.S. offshore wind developer Orsted of a deal to "transition U.S. union construction workers" into that renewable energy sector as a "model for labor-management cooperation and workforce development," they said.
"Our highly trained men and women professionals now will gain new experience in deep-water ocean work," said building trades' President Sean McGarvey, who added that the pact follows one between Orsted and 300 union craft trades who built the 30-MW Block Island wind farm off the Rhode Island coast, completed in 2017.
Orsted has much larger projects under development off the coasts of Rhode Island, New Jersey, Maryland and Virginia, as well as work in other renewables sectors.
The Solar Energy Industries Association’s legislative and regulatory agendas to put the U.S. on a path to 100% clean energy includes infrastructure, job programs and “most urgently” a new tax policy that rapidly expands the use of solar energy, says Lyle Rawlings, president of New Jersey-based Advanced Solar Products and vice president of a 62-member group cooperative.
He adds that it wants a 30% federal investment tax credit for projects extended through 2025. The existing credit, now at 26%, will drop to 22% at the end of 2020. The best action would be to convert tax credits to a cash grant to open a new way to deploy capital, support a rapid conversion to renewables and have a stimulus effect to end the COVID-19 recession, Rawlings told ENR.
“This will likely have Biden’s support,” he says. President Trump’s policies hit the solar industry hard with higher tariffs on photovoltaic panels and regulatory changes that made it more difficult for clean energy projects to compete with fossil fuels. “It was pretty much a comprehensive assault on renewable energy,” he says.
Offshore wind is likely to play a central role in Biden’s energy agenda, said Ed Crooks, vice chair of industry research firm Wood Mackenzie.
While serving in the U.S. Senate from Delaware, Biden was an early supporter and strong proponent of offshore wind-energy development, says Jim Lanard, a former executive with Blue Water Wind, which was developing a windfarm off the state’s coast at the time.
Through mandates or goals, states are committed to nearly 30 GW of renewable energy. “But in the east, there is not a lot of space for solar or land-based wind, so the only way those standards can be met is with offshore wind,” Lanard says.
Brandon Burke, policy director for The Business Network for Offshore Wind, an advocacy group for project developers, says federal approval—possibly by year end—of final environmental permits for the first major U.S. commercial-scale project could quicken other signoffs “and significantly enhance market certainty that investors must see to justify large manufacturing investments.”
U.S. government approval of the $2-billion, 800-MW Vineyard Wind project off the Massachusetts coast was set back by more than a year in 2019, with new permit requirements added at the last minute. Some saw this as politically-motivated.
Burke says the Federal Energy Regulatory Commission (FERC) should also have a bigger role in requiring regional entities such as grid operators to develop integrated transmission planning approaches, with the federal government also offering more direct and indirect financial support to build and upgrade infrastructure.
N.J.'s New Bar for States, Feds
That role was brought into focus on Nov. 18, with New Jersey announcing an alliance between a state and a grid operator, PJM Interconnect, to jointly develop what would be the first offshore wind power connection into the existing state transmission system, which could become a regional hub.
New Jersey's Board of Public Utilities now will seek bid proposals in first-quarter 2021 for design and construction options for onshore system upgrades, potential offshore platforms to collect energy from multiple wind farms, and an ocean transmission "backbone" to channel collected power from multiple state facilties and offshore lease areas.
The approach would be a departure for planned projects so far, whose developers have won approval to control offshore wind power transmission as well as production, to insure that third parties delays in completing grid connection construction do not impact generation schedules.
New Jersey has a goal of 7,500 MW of offshore wind by 2025.
"I am optimistic that with the changing of the guard in Washington, a more functional FERC will be cooperative with regional grids," said Joseph Fiordaliso, board president. "The future is bright."
A next step for the Interior Dept.’s Bureau of Ocean Energy Management is to lease more area on the outer continental shelf for wind projects, including segments farther out to sea that will minimize conflicts with commercial and military interests.
Even with lukewarm Trump administration support, there were “record-breaking offshore wind lease area auction results in the past four years,” says Burke, with more than $400 million paid by developers.
“Results like these make the department one of the federal government’s largest revenue generators,” he contends.
Proponents also see growth potential in a Biden government for West Coast and Gulf of Mexico offshore wind, with better federal inter-agency cooperation and bipartisan congressional support
Offshore wind “is a once-in-a-generation opportunity to create jobs, expand companies and push American innovation,” says Burke.
Fossil Fuels-What's Ahead?
The clean-energy focus does not put the brakes on fossil fuel development, according to some participants and observers. A Biden administration is likely to favor a gradual transition away through slowed permits, possibly halted federal oil and gas leasing, and requiring carbon and lifecycle costs to be analyzed for federal projects.
“Fossil is not going to do well, but not as poorly as expected,” says David Dismukes, a Louisiana State Univeristy professor and executive director of its Center for Energy Studies. He expects a temperate, research-focused movement toward renewable energy, much like occurred in the Obama administration.
S&P Global Platts Analytics predicts a “muted impact” if Biden bans new federal drilling permits, which would put up to 1.1 million barrels per day of oil output and 3.7 billion cu ft per day of natural gas output at risk by 2025.
Biden has said he will transition away from fossil fuels and will ban hydraulic fracking on public land, but Dismukes says politics will play a role in administration follow-through if officials are concerned about the outcome of midterm elections in 2022—pointing out that energy was a key issue in a number of House races that Republicans won from Democrats tin the current election.
"When you dig deeply into the House and Senate results, this election was actually an overwhelming victory for U.S. energy leadership and the millions of jobs and economic benefits ]it] provides," said Mike Sommers, CEO of the American Petroleum Institute at a recent industry virtual forum. Formerly chief of staff to House Republican Majority Leader John Boehner and a special assistant to President George W. Bush, he also noted API outreach to the Biden team to provide industry input on climate change and deregulation policy ahead.
Industry officials have also noted growing Republican strength in statehouse elections, with the potential of more attorneys general blocking new curbs on oil and gas projects.
Dismukes adds the administration is going to be too busy with economic recovery and COVID-19 response to do too much on energy right away.
But a Biden Interior Dept. could adjust royalty rates for fossil-fuel extractors and for solar and wind producers using public land," wrote attorneys for the law firm Sidley Austin in a blog post. "Leveraging economic incentives to achieve the results desired (e.g., carbon-free electricity) would square to Biden’s campaign.”
ClearView Energy analyst Kevin Book, in a recent Platt’s podcast, said the administration is likely to slow-walk permits for fossil-fuel projects, including the controversial Keystone XL pipeline, through FERC and other agencies.
“It’s going to be a tough road permitting pipeline and LNG facilities through FERC. They are going to be very scrutinized,” Dismukes agreed.
Book says it’s likely a Biden executive order will require federal agencies to fully analyze the impact of carbon in projects, which will slow them and could halt traditional oil and gas construction jobs altogether. Addition of hydrogen in natural gas power plants is seen as one mitigating option, with the first such U.S. plant now under construction.
“Decisions will be slowed down for review,” Book said. “We have been told there will be a climate test” for infrastructure.
Bracewell’s Policy Resolution Group, a lobbying firm in Washington D.C., says the relationship between the Biden campaign and organized labor— Brad Markell, executive director of the AFL-CIO's industrial union council, was named to the U.S. Energy Dept. transition team—suggest that “policies undermining energy and manufacturing growth will fail to gain traction, at least as long as the U.S. seeks a path of sustainable economic recovery.”
Climate resilience also will get a boost under the new administration. Retired Maj. Gen. Michael J. Walsh, a former U.S. Army Corps of Engineers deputy commanding general for civil and emergency operations who now is a senior adviser at policy consultant Dawson and Associates, says he hopes for an infrastructure bill that funds Corps projects that have been studied and authorized—especially those to shore up protections for a changing climate along coasts and rivers.
The incoming administration will also weigh environmental justice considerations in plans for new development, decisions on remediation projects and for job creation, says university professor Lodato. “Projects that will have a demonstrably negative impact on communities of color will undergo a heightened level of scrutiny, and some will be scrapped.”
He lists lead-pipe removal in municipal water systems as an effort the administration is likely to boost resources for—an example of a way for it “not only to right historical wrongs, but as public works projects that create jobs in low-income areas.” Biden as a candidate pledged to allocate 40% of the planned investment in clean energy to “disadvantaged communities.”
Rural, urban and tribal communities could also see increased wildfire, storm and flood resilience and public land and water restoration efforts, noted Natural Resources Defense Council CEO Gina McCarthy, a former EPA administrator under President Obama, in a blog post.
Following an administration that enacted dozens of environmental regulatory rollbacks, the Biden government can be expected to begin to reverse them, including restoration of climate impact assessments for projects under the National Environmental Policy Act as a possible day one priority, Lodato says.
To make environmental policy executive-order revamps and rollbacks harder to reverse, “Biden is likely to seek legislative approval for some of these issues,” he adds.