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

 The American Jobs Plan (AJP) envisions moving to 100 percent carbon pollution-free power by 2035.  To do this, the Plan contemplates sweeping updates to the power sector to increase use of zero-emissions electricity and modernize the physical infrastructure to make it cleaner, more resilient, and more cost-effective for end users.

The AJP’s reimagining of the American power sector is a critical component of the President’s goal to achieve net-zero emissions by 2050, as significant investments in electric vehicles (EV), EV charging, and electric heat pumps for both commercial and residential dwellings are intended to accelerate the nation’s progress in lowering greenhouse gas emissions.

Citing the Texas power outages as an example of the vulnerability of the nation’s aging power systems, as well as the estimated $70 billion annually that power outages cost the nation, the plan proposes that Congress invest $100 billion to update the nation’s electric grid.  As reflected by our prior posts on grid modernization, transmission infrastructure, and offshore wind, this Administration has prioritized a clean electricity grid as the centerpiece of its carbon reduction strategy.

To help deliver clean electricity across the nation, including at least 20 gigawatts of high-voltage capacity power lines, the plan proposes a 10-year extension and phase down of a direct-pay investment tax credit and a production tax credit for clean energy generation and storage.

These tax proposals are also intended to encourage investors to apply tens of billions of dollars to further this ambitious electric grid revitalization plan.

Most significantly, President Biden proposes developing an Energy Efficiency and Clean Electricity Standard – what’s usually described as a “Clean Energy Standard” or CES – which would support existing clean energy resources like nuclear and hydropower, while also creating incentives to deploy incremental renewable resources.

In line with this Administration’s strong focus on environmental justice, the Plan’s power-related goals recognize the importance of worker empowerment, including requiring robust standards for occupational safety, public health, and environmental safety.

To be sure, the plan will require significant activity across the private and public sectors to ultimately deliver the clean energy future it envisions.  In addition to developing targeted financial incentives for private sector action, the plan recognizes the potential for the federal government’s purchasing power to help develop demand for emerging markets and offer proof of concept.  The AJP proposes that the federal government purchase 100% renewable energy to power the federal government’s buildings across the United States, including courthouses, VA hospitals, and office buildings in every state.

Although Congress’ reception to the idea is yet to be determined, the White House hopes to encourage lawmakers to require the electric grid in the United States to derive 80 percent of its power from zero-emissions sources by 2030.  Numerous analyses suggest that this goal would be possible with the deployment of a clean electricity standard.

The Administration has already taken steps to advance the clean energy future the AJP contemplates.  In May, the commercial-scale wind farm project off of the coast of Martha’s Vineyard, Vineyard Wind, was approved.  The project is expected to create 800 megawatts of clean energy by 2023, enough to power 400,000 homes.  The Administration also recently announced that it will allow for utility-scale offshore renewable energy development on parts of the Pacific coast.  These offshore wind developments will necessitate further investment and innovation in the US power grid.

The U.S. power grid will be called upon to decarbonize other sectors, such as transportation, and, to serve that role, it will need to decarbonize on a more accelerated pace than the rest of the economy.  That’s why the Biden Administration has set a target for an 80 percent reduction in power-sector emissions by 2030, while promising a 50 to 52 percent economy-wide reduction by that same year.

The power sector has dramatically reduced its emissions over the past several years, such that the 2030 goal that the Obama Administration set in 2015 when it promulgated its Clean Power Plan was achieved a decade in advance, even though the plan never went into effect.  While these changes are largely being driven by market forces and consumer demand, continuing this trajectory may require regulation in the form of a proposed CES.  Significant questions remain as to whether a CES could be enacted by this Congress.

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Photo of Lindsay Brewer Lindsay Brewer

Lindsay Brewer is an associate in the firm’s Washington office. She advises clients on environmental, product safety, occupational safety, and public policy issues. She has experience with a wide range of environmental and safety programs, with a focus on the Clean Air Act…

Lindsay Brewer is an associate in the firm’s Washington office. She advises clients on environmental, product safety, occupational safety, and public policy issues. She has experience with a wide range of environmental and safety programs, with a focus on the Clean Air Act (CAA), the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA/Superfund), the Federal Trade Commission Act (FTC Act), the Consumer Product Safety Act (CPSA), the Federal Motor Vehicle Safety Standards (FMVSS), and the Occupational Safety and Health Act (OSH Act).