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Biden Infrastructure Plan Includes 10-year Extension and Phase Down of Direct-Pay ITC

April 22, 2021


President Joe Biden rolled out his infrastructure package called the American Jobs Plan on March 31 in Pittsburgh, Pennsylvania. The plan includes a large investment in re-energizing the country’s power infrastructure and boosting renewable energy development.

The plan aims to create a more resilient grid, lower energy bills for middle class Americans, improve air quality and public health outcomes, and create good jobs, with a choice to join a union, on the path to achieving 100% carbon-free electricity by 2035.

President Biden is calling on Congress to invest $100 billion to:

Build a more resilient electric transmission system.

Through investments in the grid, we can move cheaper, cleaner electricity to where it is needed most. This starts with the creation of a targeted investment tax credit that incentivizes the buildout of at least 20 GW of high-voltage capacity power lines and mobilizes tens of billions in private capital off the sidelines — right away. In addition, President Biden’s plan will establish a new Grid Deployment Authority at the Department of Energy that allows for better leverage of existing rights-of-way — along roads and railways — and supports creative financing tools to spur additional high priority, high-voltage transmission lines. These efforts will create good-paying jobs for union laborers, line workers and electricians, in addition to creating demand for American-made building materials and parts.

Spur jobs modernizing power generation and delivering clean electricity.

President Biden is proposing a 10-year extension and phase down of an expanded direct-pay investment tax credit and production tax credit for clean energy generation and storage. These credits will be paired with strong labor standards to ensure the jobs created are good-quality jobs with a free and fair choice to join a union and bargain collectively. President Biden’s plan will mobilize private investment to modernize our power sector. It also will support state, local and tribal governments choosing to accelerate this modernization through complementary policies — like clean energy block grants that can be used to support clean energy, worker empowerment and environmental justice. And, it will use the federal government’s incredible purchasing power to drive clean energy deployment across the market by purchasing 24/7 clean power for federal buildings. To ensure that we fully take advantage of the opportunity that modernizing our power sector presents, President Biden will establish an Energy Efficiency and Clean Electricity Standard (EECES) aimed at cutting electricity bills and electricity pollution, increasing competition in the market, incentivizing more efficient use of existing infrastructure, and continuing to leverage the carbon pollution-free energy provided by existing sources like nuclear and hydropower. All of this will be done while ensuring those facilities meet robust and rigorous standards for worker, public, and environmental safety as well as environmental justice — and all while moving toward 100% carbon-pollution free power by 2035.

Put the energy industry to work plugging orphan oil and gas wells and cleaning up abandoned mines.

Hundreds of thousands of former orphan oil and gas wells and abandoned mines pose serious safety hazards, while also causing ongoing air, water, and other environmental damage. Many of these old wells and mines are located in rural communities that have suffered from years of disinvestment. President Biden’s plan includes an immediate up-front investment of $16 billion that will put hundreds of thousands to work in union jobs plugging oil and gas wells and restoring and reclaiming abandoned coal, hardrock, and uranium mines. In addition to creating good jobs in hardhit communities, this investment will reduce the methane and brine that leaks from these wells, just as we invest in reducing leaks from other sources like aging pipes and distribution systems.

Remediate and redevelop idle real property, and spur the buildout of critical physical, social and civic infrastructure in distressed and disadvantaged communities.

In thousands of rural and urban communities around the country, hundreds of thousands of former industrial and energy sites are now idle — sources of blight and pollution. Through a $5 billion investment in the remediation and redevelopment of these Brownfield and Superfund sites, as well as related economic and workforce development, President Biden’s plan will turn this idle real property into new hubs of economic growth and job creation. But it’s not enough to redevelop old infrastructure. President Biden’s plan also will bring these communities new critical physical, social, and civic infrastructure. This means investing in the Economic Development Agency’s Public Works program (while lifting the cap of $3 million on projects) and in “Main Street” revitalization efforts through HUD and USDA. President Biden’s plan also will spur targeted sustainable, economic development efforts through the Appalachian Regional Commission’s POWER grant program, Department of Energy retooling grants for idled factories (through the Section 132 program), and dedicated funding to support community-driven environmental justice efforts — such as capacity and project grants to address legacy pollution and the cumulative impacts experienced by frontline and fenceline communities.

Build next-generation industries in distressed communities.

President Biden believes that the market-based shift toward clean energy presents enormous opportunities for the development of new markets and new industries. For example, by pairing an investment in 15 decarbonized hydrogen demonstration projects in distressed communities with a new production tax credit, we can spur capital-project retrofits and installations that bolster and decarbonize our industry. The President’s plan also will establish ten pioneer facilities that demonstrate carbon capture retrofits for large steel, cement and chemical production facilities, all while ensuring that overburdened communities are protected from increases in cumulative pollution. In addition, in line with the bipartisan SCALE Act, his plan will support large-scale sequestration efforts that leverage the best science and prioritize community engagement. And to accelerate responsible carbon capture deployment and ensure permanent storage, President Biden’s plan reforms and expands the bipartisan Section 45Q tax credit, making it direct pay and easier to use for hard-to-decarbonize industrial applications, direct air capture and retrofits of existing power plants.

Mobilize the next generation of conservation and resilience workers.

This $10 billion investment will put a new, diverse generation of Americans to work conserving our public lands and waters, bolstering community resilience, and advancing environmental justice through a new Civilian Climate Corps, all while placing good-paying union jobs within reach for more Americans.

SEIA expressed its approval of the new plan through a statement by Abigail Ross Hopper, president and CEO:

“President Biden’s infrastructure proposal is a significant step in meeting our collective clean energy goals. The plan creates jobs, spurs the economy, faces the climate crisis, and advances environmental justice.

“The release of these critical infrastructure priorities is just the beginning of a long policymaking process over the coming weeks and months that will require continued focus and determination on the part of elected officials.

“The plan has a clear focus on domestic manufacturing, good jobs for all Americans and clean energy woven throughout. SEIA has offered proposals consistent with this plan that will help the economy build back better. Our industry stands ready to add hundreds of billions of dollars in investment and hundreds of thousands of jobs in all American communities.

“In line with the President’s emphasis on high-quality jobs, an upcoming jobs study will show that solar has a unionization rate of 10.3%, which is substantially more than previously estimated and higher than the economy-wide average. These union jobs, along with numerous other career-sustaining jobs in solar, offer another moment to prioritize equity and create opportunities in every community, regardless of zip code, including for fossil fuel workers who are looking to continue their careers in the energy sector.

“We look forward to working with the administration and bipartisan members of Congress to enact policies that generate the kind of economic growth and climate solutions we are all striving to achieve.”

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