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National Climate Advisor McCarthy promises jobs focus as part of US climate agenda

04 February 2021 Kevin Adler

US climate change policy under President Joe Biden will be closely tied to economic recovery from the COVID-19 pandemic, said Gina McCarthy, the first-ever National Climate Adviser, during a 3 February talk at the Energy Storage Association's virtual Policy Forum.

And with renewable power becoming a more significant part of US energy capacity, McCarthy said expanding the use of energy storage and integrating it more closely with grid operations will be crucial to maintaining the resilience of the electricity network.

McCarthy said storage is the answer to skeptics who ask her what happens when the wind doesn't blow and the sun doesn't shine. "How many times do we have to say these things?" she asked. "We have to explain to the public we have answers. We can generate energy, and hold it, and release it at the times we need it."

The former administrator of the US Environmental Protection Agency under President Barack Obama, McCarthy said policy initiatives in the first two weeks of the Biden administration moved quickly because "President Biden and Vice President [Kamala] Harris have terrific aspirations for what we can do in this country, and addressing climate is part of it."

Climate change is "intertwined" with the other challenges that the nation faces today, she said, citing COVID-19 health recovery, the economy, and systemic racism. "We wanted to go fast … and base our programs on the strongest plan we could," she said. "As a nation, we just lost four years of looking backwards, instead of using those years to push forward."

Infrastructure investments, such as battery storage and electric vehicle charging stations, are tools that will both pull the US economy out of a recession, but also "let young people—who have been so instrumental on this—understand that we get it."

The Biden administration is thinking big, she said, "… about where you want to go, not where you used to be. Let's not recreate our fossil fuel-based economy that we know [helped to create] the climate crisis."

In addition to returning the US to the Paris Climate Agreement, McCarthy said that Biden has made it clear that his approach will focus on creating "good-paying, union jobs"; "delivering environmental justice"; and returning to a science-based approach to climate change.

Taken together, McCarthy declared it a "whole-of-government approach," to solving climate challenges. "I've got a small stronghold office, but I am an orchestra leader for a very large band," she said, meaning that she is coordinating with multiple federal agencies on how to reduce greenhouse gas emissions and build a resilient infrastructure and economic base. "We are, together, reviewing policies, practices, how we can use our purchasing power, and conducting program reviews," she said.

Energy storage

As for energy storage, the topic of the conference, McCarthy pronounced herself "excited because I think the technology is here. There's a lot we can already do … already so much we can deploy … that's what storage needs, a real deployment strategy."

The Biden administration wants to work with the power industry, electricity grid administrators, and state utility commissions to build resilience into the system's infrastructure, McCarthy continued. "Storage has to be a component of that strategic thinking. It has to be part of our platform to 'Build Back Better.'"

When resilience is demonstrated, McCarthy predicted that wary consumers will support renewable power more strongly. "We have to get the middle of the country understanding and active on climate. We have to show them what resilience looks like, so there is confidence they can embrace the challenge of the climate crisis and … [that] the US can make it happen," she said.

Security and energy storage

A panel following McCarthy's remarks picked up on the theme of resilience in the form of energy security, and how US trade policy fits into the picture.

President Donald Trump issued an executive order on 1 May 2020 that declared that the Department of Energy (DOE) would be in charge of "Securing the United States Bulk-Power System," which had not previously been under DOE's mandate. How the Biden administration will approach this issue is unknown so far, said the panelists.

"President Trump's order surprised us," said Philip Moeller, executive vice president, Edison Electric Institute. But Moeller said Trump was spot-on that it is a critical issue, both in terms of materials and technology. "When you look at the supply chain, there is the issue of commodities, such as lithium and making sure we have a secure supply chain," said Moeller. "But more importantly … [it] is the integrity of the devices that are going on the grid."

At times, 90% of the solar power inverters sold in the US were made in China, Moeller said, and Chinese components are commonly found in many power grid applications, both hardware and software. With the grid of the future dependent on greater sharing of information and quicker response times, this raises the stakes for security. "As we try and balance the need for distribution system information-where are you going to add significant EV charging capacity, for example-countering this is the need to make sure sensitive information on the system stays where it cannot be exploited by [people] in the domestic or international environment," he said.

On the issue of the minerals needed for renewable power and energy storage, US trade policy is likely to evolve from Trump's stance, but how far is unknown at this time, said Suzanne Kane, partner with Akin Gump in its Washington, DC office. "We do know it's reviewing a broad range of Trump [administration] policies, though we're not sure specifically where China tariffs fall in that broader review," she said.

The cornerstone of Trump's policy towards China was an array of tariffs on Chinese exports to the US of manufactured goods and also minerals, some of which are important to the renewable power industry, under Section 301 of the Trade Act of 1974.

On the one hand, Kane said that Biden and his nominee for Department of Commerce Secretary, Gina Raimondo, have made it clear they will continue the prior administration's tough stance with China. There is strong bipartisan support in Congress to maintain tariffs as well, Kane said.

"But on the flip side, the Biden administration has stated it will continue to work with China on areas of concern, including climate change. So, clean energy is an issue," she said. "We are hopeful that with the priorities of the administration in mind, they will review the Section 301 tariffs and the products covered by it."

One possibility is to roll back tariffs on some items that are particularly strategic for the clean energy industry, Kane said. Another is to reopen the process by which importers from China could seek exclusions to the tariffs, if they can demonstrate that a product is not available from anywhere else. Hundreds of exemptions have been granted for medical equipment related to fighting COVID-19 and a lesser number for industrial equipment. The new administration has "wide discretion" to change the exclusion criteria, perhaps granting more exclusions than were approved under the prior reviews, Kane said.

Posted 04 February 2021 by Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit

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