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Climate-focused infrastructure bill could boost US power grid, CCS

15 March 2021 Amena Saiyid

US congressional Democrats are gearing up to write climate-focused infrastructure legislation that would boost the nation's power grid resiliency and include incentives for clean energy technologies including carbon capture and sequestration (CCS), which enjoys bipartisan backing.

February's power and water outages in Texas caused by sudden sub-zero temperatures forced US policymakers to concede that the country's power grid is not equipped to handle climate-driven weather extremes or events, such as wildfires and flooding.

This became especially clear 10 March during a US Senate & Environment and Public Works (EPW) Committee hearing that Senator Thomas Carper, Democrat-Delaware and chairman, held on the electricity sector's role in addressing climate change.

Carper's goal was to canvass views on how to fold President Joe Biden's "Build Back Better" $2 trillion infrastructure initiative, as well as his goal to achieve a carbon-free generation sector by 2035, into a legislative package that Republicans can support.

In addition to discussing whether it made sense to shore up grid resilience with a diverse fuel mix or renewables alone, several senators also spoke about the potential for nuclear power to deliver reliable, carbon-free energy.

The US Congress has turned its attention to infrastructure after passing Biden's $1.9 trillion COVID-19 rescue plan.

FERC lacks plan

At the hearing, the US Government Accountability Office (GAO), a non-partisan congressional watchdog, released a report that concluded the US power grid -- be it generation, transmission, or distribution -- is unprepared for climate impacts.

"We found that the costs of large power outages as occurred recently in Texas are likely to cost many billions of dollars annually unless the grid is made more resilient to climate-related extreme weather, wildfires, [sea-levels rising], and flooding," Frank Rusco, GAO natural resources and environment director, told the committee.

The Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC) have key roles to play in mitigating the climate risks for the nation's power sector.

Yet, Rusco said, the GAO found that FERC at present has no comprehensive plan to deal with climate risks, Rusco said.

During the hearing, Democrats and Republicans appeared to disagree on the role renewables played in the outages in Texas, but all agreed on the need for a diverse energy mix that included renewables, natural gas, and advanced nuclear. They also agreed on the need for a resilient electrical grid that can transmit renewable power from remote locations as easily as conventional sources of power like gas or coal.

On the technology front, lawmakers from both parties backed CCS, which is critical not just for existing coal-fired generation, but also gas-fired power plants. In addition, the cement and steel industries, as well as other major users of fossil fuel power, see CCS as a key offset to some of their emissions.

Consensus-seeking Carper

Carper made it clear that he is looking for a consensus on finding a path toward a clean and more resilient electric sector. He nodded to the clean energy standards that 30 states have adopted, with about 14 of them planning to transition to 100% renewables. "As our president says, we need to build back better," Carper added.

Noting that one in three Americans live in cities with a clean energy standard, US Senator Edward Markey, Democrat-Massachusetts, asked GAO's Rusco whether a clean energy standard, especially one that relies on 100% renewables, could bring reliable and affordable energy for US consumers.

Rusco said such a standard would be achievable as long as policymakers recognize the need for gas as "a bridge fuel," the value of carbon-free nuclear coupled with guardrails in place for cost and reliability, pragmatic timeframes, and adequate funding for technologies.

However, Senator James Inhofe, Republican-Oklahoma, who has questioned climate change science in the past and backed the coal industry, sounded a skeptical note about relying entirely on renewables for powering the nation's grid. During the hearing, Inhofe was insistent that coal played a key role in preventing outages in his home state, which mostly avoided the tumult seen across the state line in Texas.

The Southwest Power Pool, a regional transmission organization that oversees electricity supply in 14 states including Oklahoma, issued an Energy Emergency Alert that triggered controlled service interruptions of around two hours on 16 February due to the sub-zero conditions and low gas supplies. This alert was downgraded later that evening to conserving energy and the next day Oklahoma Gas & Electric began the task of resuming power connections.

'Nation moving away from coal'

Ben Fowke, chairman and chief executive officer of Minnesota-based Xcel Energy, though agreeing that renewables alone can't power the grid, reminded Inhofe that the "nation is moving away from coal and towards natural gas."

Fowke said the grid can do without coal going forward, but not without gas. He said the US needs to focus more funds on advanced technologies like hydrogen, CCS, and advanced nuclear power plants, the latter of which Microsoft founder Bill Gates has been promoting through his latest Breakthrough Energy venture.

Sandra Snyder, environment vice president for the Interstate Natural Gas Association of America, agreed with Fowke that gas is "a foundational fuel."

However, Fowke warned that these technologies won't be available overnight: "Until they arrive, we will still need natural gas and existing nuclear generation on our system. Natural gas and nuclear will facilitate high levels of renewable energy and maintain grid reliability."

Likewise, James Wood, energy institute director for West Virginia, told Senator Shelley Moore Capito, the top-ranking Republican from West Virginia on the environment panel, that renewables were not ripe for supplying reliable power.

"No, we can't rely on renewables alone until we get a solution to intermittency," he said.

However, Capito said, unless transmission sites and renewables projects can be permitted in a timely fashion, "I don't know how we can get to net-zero" goals Biden has set for the power sector.

Markey followed up on that line of questioning by noting that at least 42% of power in Iowa comes from wind.

Building up the grid

While it is unclear what the infrastructure bill will look like. Several US senators have begun to introduce bills that could find their way in some form or another into it.

Senator Jeff Merkley, Democrat-Oregon, used the hearing to announce that he Democratic colleague Senator Ron Wyden, Oregon, had introduced the Disaster Safe Power Grid Act, which directs DOE to set up a $10 billion matching grant program for power companies to increase the resiliency of the grid to "withstand natural disasters, such as earthquakes, ice storms, wind storms, snow storms, heat storms, and other natural disasters."

Likewise, Capito announced that she and Senator Joe Manchin, Democrat-West Virginia, had re-introduced bipartisan legislation, the Carbon Capture Modernization Act, to update the 48A tax credit for retrofitting new and existing power plants with CCS, dropping the efficiency level for generation to 60%. This bill amended prior tax credit language that required 65% efficiency from generators, which the bill sponsors said was impossible.

Posted 15 March 2021 by Amena Saiyid, Senior Climate & Energy Research Analyst, IHS Markit

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