As President Biden hit his 50-day mark in office, his administration remains committed to keeping campaign promises to stimulate economic growth through development of clean energy sources that address the challenge of climate change. With new leadership appointed by Biden, the Federal Energy Regulatory Commission (FERC) is taking a fresh look at the relationship between states and regional wholesale markets. And the Democratic majority in Congress is gearing up for a recovery and infrastructure package that could stimulate investment in advanced energy resources on a large scale. All this adds up to a new day in Washington, D.C., for the advanced energy industry. What that new day looks like was the subject of a recent webinar featuring AEE policy experts and speakers representing advanced energy developers and buyers.
“The Biden campaign really identified four critical issues that this country is facing,” said panelist Steve Caminati, Director of Strategic Engagement at Apex Clean Energy, a developer of large-scale renewable energy projects. “The exciting thing about clean energy is that we can solve for two of those: addressing climate change and rebuilding our economy. So we're really bullish about what we can achieve this year.”
Biden has already signed an executive order outlining a “whole of government” approach for addressing climate change, noted Leah Rubin Shen, Director at AEE. The order puts emphasis on creating jobs through clean energy infrastructure, greening government operations, and promoting climate-centered diplomacy. In line with this, Biden has taken steps to rejoin the Paris Climate Agreement and has committed to transitioning federal fleets to electric vehicles. Rubin Shen said indications are that “we aren’t going to see Clean Power Plan 2.0” as the way to reduce carbon emissions, but rather the Administration might “try to get creative” by pursuing something like a Clean Energy Standard through regulation.
Meanwhile in Congress, there is strong potential for a broad infrastructure package, including advanced energy, to be pursued by the majority Democrats, likely through budget reconciliation, said Caminati of Apex Clean Energy. It could take until the summer or even the fall, he said, but “what we’re hearing is there really is a sense of urgency to move quick and to get a real recovery package done.”
From the viewpoint of grid-scale advanced energy development, Caminati outlined several key areas of advanced energy policy engagement. These include tax adjustments that broaden eligibility for tax credits and to make their use more efficient, by providing direct pay to relieve constrains in the tax equity market. The industry is looking to Congress for relief from trade tariffs imposed by the Trump administration, “to allow truly cost-effective renewable energy to be deployed,” he said. In addition, developers are looking for “robust, transparent permitting and siting but we see importunities to improve the process to provide more predictability and efficiency.” Caminati also called for treating labor, domestic content, and economic development as “three linked areas” for developing a clean energy economy, in the process creating high-paying, quality jobs and really building careers.”
Caroline Golin, North America Markets Lead at Google, a major purchaser of renewable energy from new projects, highlighted the need for investment in transmission. Transmission buildout must match accelerating generation capabilities to ensure that renewable energy can reach customers throughout the country. Additionally, tax credits and funding for next-generation technologies will help support the grid and increase resilience as extreme weather events escalate.
“We want to make sure that we’re investing in the next-generation technologies that are going to round-out the grid, and that looks a little more technology agnostic in terms of the tax credits or the direct commercialization funding,” said Golin. “I think what’s going on with these extreme weather events around the country is, if nothing else, proof that we need to invest in the grid and get to a point where we can be integrating vastly new technologies.”
Meanwhile, at FERC, with new Commissioners Allison Clements and Mark Christie in place since November and new Chair Richard Glick now leading the still-Republican majority, the Commission is shifting gears, said AEE’s Jeff Dennis, managing director and general counsel. Areas in which Dennis sees “a lot of bipartisan interest” from commissions include (1) minimizing barriers for emerging technologies, (2) accommodating state policy objectives in wholesale markets, (3) expanding transmission infrastructure to support advanced energy development, (4) improving grid resilience against extreme weather, (5) reshaping pipeline approval processes, (6) improving public participation in FERC processes, and (7) prioritizing environmental justice.
Liz Delaney, Director of Wholesale Market Development at renewable energy developer Borrego, highlighted several key issues facing the industry at FERC. First is resource adequacy, including the Minimum Offer Price Rule (MOPR) ordered by FERC in PJM Interconnection and the similar mechanisms in ISO-NE and NYISO, where Delaney said “there is growing recognition that MOPR is not a sustainable solution,” but further market changes are needed. At the same time, implementation is underway for FERC Order No. 2222, which allows aggregations of distributed energy resources (DERs) to compete in wholesale energy markets. The order, she said, is “highly deferential” to the RTOs’ individual needs and processes, which could create a disparate and lengthy implementation timeline. Other matters she addressed included treatment of hybrid and co-located resources and a host of interconnection and transmission issues.
“Across the country we are seeing backed up and clogged interconnection queues both at RTOs and on the distribution level,” said Delaney. “There is an astounding amount of new renewable and storage generation. This is only going to get worse as energy transition accelerates.”
Ultimately, the panelists agreed, stronger alignment between FERC and state policymakers, with increased attention to customer voices, will be essential to mitigate these challenges, build smarter markets, and ultimately create a prosperous advanced energy economy in the U.S.
To watch the full “A New Day for Advanced Energy?” webinar, click below.