Dive Brief:
- The sheer scale of the Inflation Reduction Act and the infrastructure buildout needed to implement it means that the federal government needs private stakeholders and local governments to take a proactive approach to the law, said speakers at Thursday’s Greentech conference.
- It’s “critically important” for the government to communicate about the law, said U.S. Department of the Treasury climate counselor Ethan Zindler, but they will also need help from trade associations, unions and other groups to “get the word out” about aspects like the prevailing wage requirement and electric vehicle tax credits so employers and consumers take advantage.
- Jesse Jenkins, head of the ZERO Lab at Princeton University, said that while challenges like transmission buildout still loom, the private sector has so far embraced the financial opportunity of the IRA and that “substantial progress” is being made on all fronts.
Dive Insight:
One of the difficulties in implementing the IRA and achieving a clean energy transition is that unlike recent technological revolutions, which have largely been digital, “we're talking about steel and copper and concrete in the ground across the country,” Jenkins said.
“By 2035 alone we're going to need to add about 75,000 miles of high voltage transmission lines, enough to run from New York City to Los Angeles and back 15 times,” Jenkins said. “That sounds like a lot for a country not used to building big things. But we have built big things in the past, this is not unprecedented, and shouldn't be viewed as impossible.”
Transmission buildout is impacted at different levels. On Wednesday, the Federal Energy Regulatory Commission approved a $796 million transmission plan despite objections from the Maryland Public Service Commission, while last month, New York Gov. Kathy Hochul vetoed a major transmission bill for her state. Even individuals impact these decisions, with analysis and consulting firm DNV finding residential opposition to transmission projects can pose a significant barrier.
Jenkins said that a 2.3% annual increase in transmission capacity is needed to avoid a constrained transmission scenario where half of the potential emissions reductions from the IRA are unable to be delivered. In contrast, the growth rate of transmission over the last decade has been around 1% per year.
However, from 1978 to 1999, the U.S. added an average of around 2% of transmission capacity per year, offering historical precedent for that rate of growth, he said.
“We have those pressures of time while we're trying to build capacity,” said Kelly Crawford, a senior advisor for energy, equity and environmental justice at the Department of Energy. “It's not just delivering the funds … time is a pain point, because we know that we have to deliver all of this infrastructure, and relatively quickly.”
The labor shortages throughout the clean energy industry contribute to the time issue, Crawford said, “because we know that the workforce today does not exist to deliver all of this infrastructure that's necessary.”
Since the passage of the IRA, DOE has built out its capacity to implement the funding in the law by creating a new undersecretary for infrastructure along with new offices to implement and deliver funds, she said.
However, added capacity is also needed on the side of communities that will be hosting projects – these communities often need support to communicate productively with project developers and enter into community benefits agreements, Crawford said.
“When I first heard Congress was thinking about $5 billion for EJ, which I knew I’d be in charge of at EPA, I didn’t celebrate,” said Matthew Tejada, deputy assistant administrator for environmental justice at EPA. “My first thought was, oh s—. Who’s ready to spend $5 billion on environmental justice? There are maybe a dozen organizations out there that authentically do EJ work that could handle an eight figure grant, much less than a nine figure grant.”
Initially, Tejada said that EPA was afraid the competitions they were launching for funding would fail to secure applications, but the agency has been “really happy” about the response so far.
“There's been a response, people have rallied to try to figure this out,” he said. “People have put their organizations, their institutions on the line to get into some really difficult work that’s going to demand a lot of innovation, a lot of creativity, and getting a lot of things wrong.”
