Historically, the US has met its rising demand for energy from fossil fuels. However, the Federal government’s recent announcement to transition to clean energy in a big way calls for investments in low-carbon, climate-resilient energy infrastructure as well as significant scaling-up of investments to support the broader development, economic, energy security and climate agendas.
Despite being the wealthiest country in the world, the US ranks 13th when it comes to the overall quality of its infrastructure. According to the White House, as of March 2021, the public domestic investment, as a share of the economy, has fallen by more than 40 per cent since the 1960s. Due to decades of disinvestment, infrastructure such as roads, bridges and water systems are not up to the mark.
Moreover, with the effects of climate change being increasingly felt in the US, chronic underinvestment in resilience has harmed various infrastructure sectors such as transportation and power. In particular, underinvestment in transportation has often led to services being disrupted, making travel conditions unsafe, causing severe damage, and increasing maintenance and operating costs. Furthermore, the mid-February 2021 power grid failure in Texas clearly indicated the degree to which the US electric grid is vulnerable to catastrophic outages.
In a March 2021 White House briefing, it was acknowledged that there exists a dire need to undertake extensive research and development (R&D), manufacturing and training in different sectors of the US economy. Furthermore, it was emphasised that there is a need to invest in strengthening the country’s infrastructure and competitiveness, and create good-paying, union jobs of the future.
Over the course of the last few months, the US government has introduced various policy initiatives to spur infrastructure investment across the nation. At a time when the ongoing pandemic has led to job losses, eroding more than 30 years of progress in women’s labour force participation, and threatened economic security, the recent announcements regarding infrastructure investments have been targeted towards mitigating socio-economic disparities, advancing racial equity and promoting access to opportunity. Global Transmission Report summarises some of the key takeaways from the recently introduced policy initiatives.
American Jobs Plan
The American Jobs Plan is an initiative by the Biden Administration to invest in the nation to create quality jobs and rebuild the country’s infrastructure. The USD2 trillion plan seeks to upgrade roads, bridges and water systems and help make the country’s infrastructure more resilient to the impacts of climate change.
The plan lays out a complete range of solutions that are needed to achieve technology breakthroughs that address the climate crisis and position America as the global leader in clean energy technology and clean energy jobs.
The Biden Administration will invest USD15 billion in demonstration projects for climate R&D priorities, including utility-scale energy storage, carbon capture and storage, hydrogen, advanced nuclear, rare earth element separations, floating offshore wind, biofuel/bioproducts, quantum computing, and electric vehicles (EVs), as well as to strengthen US technological leadership in these areas in global markets.
Bipartisan Infrastructure Framework
The USD1.2 trillion Bipartisan Infrastructure Framework—one of the largest long-term investment plans for the US infrastructure sectors—which aims to create a more sustainable and resilient economy, proposes to invest two-thirds of the resources proposed in the American Jobs Plan. The framework is a critical step towards making historic investments in clean transportation, clean water, universal broadband and clean power infrastructure sectors. The framework also plans to create a first-of-its-kind Infrastructure Financing Authority that will leverage capital into clean transportation and clean energy. To this end, the Biden Administration is continuing to keep up pressure on Congress and push forward the Bipartisan Infrastructure Framework.
Some of the key components of the framework include:
Aiming for a better power infrastructure
Building a resilient power infrastructure is the need of the hour for the US. A study conducted by the Department of Energy (DoE) found that power outages cost the US economy up to USD70 billion annually. To enhance investment in power infrastructure, the Biden Administration is proposing the creation of a targeted investment tax credit that incentivises the buildout of at least 20 GW of high-voltage capacity power lines.
Additionally, for the electric power transmission sector, President Biden’s plan will establish a new Grid Deployment Authority at the DoE that will help better leverage the existing rights-of-way (RoW) along roads and railways and support creative financing tools to spur additional high priority, high voltage (HV) transmission lines.
Further, the Administration plans to establish an Energy Efficiency and Clean Electricity Standard (EECES) aimed at cutting electricity bills and electricity pollution, increasing competition in the market, incentivising more efficient use of existing infrastructure and continuing to leverage the carbon pollution-free energy provided by existing sources like nuclear and hydropower.
The framework also plans to connect every American to reliable high-speed internet, driving down the prices for internet services and closing the digital divide.
The framework will modernise 20,000 miles of highways, roads and main-streets. It will fix the 10 most economically significant bridges in the country that are in need of reconstruction and will repair about 10,000 smaller bridges, providing critical linkages to communities. The plan proposes to replace numerous buses and rail cars, repair stations, renew airports, and expand transit and rail into new communities. The plan is the largest federal investment in public transit in history.
President Biden is calling on Congress to invest USD85 billion to modernise the existing transit systems and help agencies expand their systems to meet rider demand. This investment will double federal funding for public transit, spend down the repair backlog, and bring bus, bus rapid transit and rail service to communities and neighbourhoods across the country.
Moreover, the framework aims to build a national network of EV chargers along highways and in rural and disadvantaged communities. It outlines one of the largest investments in EV infrastructure in US history, which will accomplish the President’s goal of building 5,00,000 EV chargers across the US.
Clean drinking water and waste-water infrastructure
The framework emphasises the elimination of the country’s lead-made (a toxic metal which is hazardous to human health) service lines and pipes, delivering clean drinking water to up to 10 million American families and more than 4,00,000 schools and child care facilities that currently don’t have access to it, including in Tribal nations and disadvantaged communities. The plan is the largest investment in clean drinking water and waste-water infrastructure in American history.
The unprecedented cybersecurity challenges currently being faced by the US need to be urgently addressed. In 2020, a major cyberattack penetrated thousands of organisations globally, including multiple parts of the US federal government, which led to a series of data breaches. The attack, which went undetected by agencies, continued for several months and has been reported to be the worst cyber espionage incident ever suffered by the US. Such incidents underscore the need for the federal government to modernise cybersecurity defences.
In March 2021, the Department of Homeland Security recognised that the government does not have the capacity to achieve the nation’s cyber resilience alone. Since a major part of the nation’s critical infrastructure is operated and maintained by private sector players, the government needs to work in tandem with the private sector to protect the interests of the people and the services that they rely on.
To this end, the US government plans to bolster its grid and improve resilience to tackle cybercrimes better. In April 2021, the Biden Administration kick-started a 100-day plan aimed at protecting the electric grid against cyberattacks. The effort is being led by the DoE, in partnership with the Cybersecurity and Infrastructure Security Agency (CISA) and the electricity sector. The plan will act as a pilot of the Administration’s broader cybersecurity initiative planned for multiple critical infrastructure sectors. The 100-day plan will assist owners and operators as they modernise cybersecurity defences, including enhancing detection, mitigation and forensic capabilities.
In May 2021, lawmakers in the US Senate and House introduced legislation designed to improve the nation’s electrical grid in response to concerns that the country’s power system is prone to cyberthreats. Three Bills have been introduced, namely, the Cyber Sense Act, the Enhancing Grid Security Through Public-Private Partnerships Act, and the Protecting Resources on the Electric Grid with Cybersecurity Technology (PROTECT) Act.
Both the Cyber Sense Act and the Enhancing Grid Security Through Public-Private Partnerships Act direct the DoE to work with private power utilities to improve cybersecurity across the nation’s grid. Whereas the PROTECT Act will help ensure utilities across the US, including municipal utilities and electric cooperatives, are able to continue investing in advanced, cutting-edge cybersecurity technologies, while also strengthening the partnership between private industry and the federal government. The Act also establishes a DoE grant and technical assistance programme to deploy advanced cybersecurity technology for utilities that are not regulated by the Federal Energy Regulatory Commission (FERC)—an independent agency regulating the interstate transmission of electricity, natural gas and oil.
Efficient Grid Interconnection Act of 2021
Recently, in June 2021, the Efficient Grid Interconnection Act of 2021 was introduced to expand access to clean energy and reduce grid congestion in the US. The Bill, introduced in the House of Representatives, was in response to the barriers to and delays in the implementation of new renewable energy generation and energy storage interconnections during the last few years in the US.
The Act requires FERC to issue regulations to equitably allocate network upgrade costs among all the beneficiaries of the upgrade and to require grid operators to study grid-enhancing technologies to defray the costs of traditional transmission upgrades.
The grid-enhancing technologies include dynamic line ratings (DLRs), advanced power flow control, topology optimisation, and other hardware or software that increases the capacity, efficiency and/or reliability of the network.
This Act is being recognised as a crucial move in unlocking America’s clean energy potential, which is a vital step in its fight to tackle the climate crisis.
Joint Federal-State Task Force on Transmission
In a crucial step towards identifying and resolving transmission-related issues in the country, FERC and the National Association of Regulatory Utility Commissioners (NARUC) recently announced the formation of a joint federal-state task force on electric transmission, which FERC established through a recent order.
Members of this first-of-its-kind task force will explore transmission-related issues to identify and realise the benefits that transmission can provide while ensuring that the costs are allocated efficiently and fairly. The efficient development of new transmission infrastructure is essential as the nation continues to transition to clean energy resources.
Additionally, the task force will explore opportunities for states to voluntarily coordinate to identify, plan and develop regional transmission solutions; and review FERC rules and regulations regarding planning and cost allocation of transmission projects. Furthermore, the task force will identify recommendations for reforms; and discuss mechanisms to ensure that transmission investment is cost effective, including approaches to enhance transparency and improve oversight of transmission investment through enhanced federal-state coordination.
Federal and state regulators will be called upon to address numerous issues, including how to plan and pay for new transmission infrastructure and how to navigate shared federal-state regulatory authority and processes. This will call for greater federal-state coordination and cooperation.
The US is fast transitioning to the use of clean energy sources. Recent months have witnessed the introduction of various new policies to push for energy transition at an accelerated rate. The initiatives introduced appear to be promising, with a focus on various key sectors of the economy.
The investments are targeted towards improvement of power infrastructure, public transit, EV, water services and broadband infrastructure. The recent announcements are a big leap towards prioritising and enabling climate-compatible, clean infrastructure across the US and are aimed at unlocking the nation’s clean energy potential.
The article has been sourced from Global Transmission and can be accessed by clicking here