This blog is the second in a series, “The ABCs of the AJP.”

The American Jobs Plan recognizes that a net-zero economy will require significant innovation in and deployment of energy storage technology.  For example, the President’s efforts to decarbonize the power sector by 2035 will include increased reliance of renewable energy sources, which will benefit greatly from utility-scale battery systems.  The push to electrify the transportation sector also depends on cost-competitive batteries powering vehicles.  Here, we present three ways in which AJP seeks to advance battery technology and adoption.

• Tax Credits. The AJP proposes a 10-year extension to the Investment Tax Credit (ITC) and Production Tax Credit (PTC), which incentivize adoption of clean power generation technology.  In addition to extending the length of these credits, their scope would be extended as well to include energy storage systems.
• R&D Investment. As mentioned in our prior post, the AJP would commit $15 billion in demonstration projects for a number of climate R&D priorities.  Among these would be utility-scale energy storage projects.
• Domestic supply chain for electric vehicle batteries. The AJP would include funds to build and retool factories to promote increased EV battery manufacturing capacity in the United States, as part of a broader vision of a reliable and independent domestic supply chain for electric vehicles.  The country’s current dependency on Asia for battery manufacturing and raw materials has already been a focus of the new Administration, and the AJP would build on these efforts.

According to Princeton’s Net-Zero America Study, total installed capacity of batteries with a 5-7 hour duration would need to increase to at 180 GW by 2050 in its high-electrification, 100% renewable scenario.  The Energy Information Administration’s (EIA) Annual Energy Outlook 2021 projects only 59 GW by 2050 in  its reference case, meaning what would happen based solely upon current laws and regulations.  While EIA expects that utility-scale battery storage will more than quadruple this year, with 4.3 GW slated to come online by the end of 2021, Princeton projects that the annual average installation rate for utility-scale batteries will need to grow to 14 GW per year between 2040 and 2050 to support a high-electrification scenario.  Thus, despite projected reductions in battery cost, deploying the utility-scale batteries needed to achieve carbon neutrality by mid-century in higher electrification scenarios will demand policies of the sort reflected by the AJP.