The legislation passed by the US Senate Monday was downright frankensteinian: a pile of unrelated bills stitched together. Apart from the pandemic relief measures, it contained thousands of pages of government funding and tax credit extensions, like a semester’s worth of homework stapled to the final exam.
But in the end, it includes the most significant federal energy and climate policy in years, setting the agenda for Department of Energy research programs and authorizing higher funding levels for clean energy priorities.
Shortly before the 2016 US election, the Obama administration joined an international agreement to phase out another generation of refrigerants with negative environmental consequences. This agreement—called the Kigali Amendment—was added onto the 1987 Montreal Protocol that banned ozone-depleting CFCs. Some were replaced with ozone-friendly HFCs, but these turned out to be quite potent greenhouse gases.
HFCs exist in incredibly trace concentrations in the atmosphere but would pack enough punch to add around 0.5°C (or 1°F) to global warming by 2100.
Despite US industry being onboard—they were already producing alternative refrigerants—this went nowhere under the Trump administration until now. The implementation of the agreement is in the new legislation. It categorizes these HFCs as regulated substances and requires production or consumption of them to decline 85 percent by 2036.
R&D rolls a 20
The legislation also includes the Energy Act of 2020, which lays out a lengthy to-do list for the Department of Energy (DOE) and others. There is far too much in the act to detail it all, but here are some highlights.
The act directs DOE to, depending on the topic, produce assessment reports, operate research, development, and demonstration projects through grant programs and national laboratories, and even to build new focused facilities. There is renewed or increased funding for renewable electricity including hydroelectric, wind, and solar generation. Following on last year’s DOE report on geothermal potential, funding is specifically directed to advanced geothermal (which applies lessons from oil and gas fracking) and ground-source heat pumps.
The solar and wind research also includes a focus on recycling, which is becoming increasingly important as older installations get retired or retrofitted. Separately, the act addresses the permitting process for renewables on public lands.
Energy storage technology and grid modernization also comes up in a big way. This includes a broad range of programs for electricity storage options on varying timescales, battery recycling, grid architecture modeling, and smart connections with buildings that have their own generation or have flexible loads.
The act boosts funding for the ARPA-E program that aims to help new energy technologies make it to market. Funding grows from this year’s $425 million to $761 million in 2025.
DOE’s nuclear energy program is not left out. DOE is directed to work on the availability of so-called “” fuels that some new reactor designs are meant to work with, as well as to study options for producing other alternative fuels like thorium-232. Multiple programs fund research for advanced reactors. And of course, the ITER fusion project gets a chunk of change.
Building efficiency efforts also get a boost. Spending is directed toward energy- and water-efficiency renovations in federal buildings and data centers. These aren’t really optional, either—any projects that meet the criteria by paying for themselves should get the green light. The Weatherization Assistance Program that provides grants for energy-efficiency projects for low-income households also gets reauthorized through 2025, with about a 10 percent bump in funding.
But the act isn’t all electrons and BTUs. There’s some chemistry as well, like a focus on “critical minerals” like rare earths. Techniques for extracting, processing, and recycling rare earths will get an R&D program. More broadly, DOE will be maintaining a list of minerals with vulnerable supply chains to designate as “critical” for extra federal attention.
Carbon dioxide capture and storage pops up everywhere in this legislation. There is funding for capture from smokestacks as well as “Direct Air Capture” technologies that simply pull carbon from ambient air. You’ll also find funding for underground storage projects and “carbon utilization” research for turning captured CO2 into other useful forms.
Separately, a joint program with the Department of Agriculture would fund projects for other forms of carbon capture, including forestry, agricultural practices, and rock weathering.
Elsewhere in the legislation, several major renewable energy tax credits are extended. The offshore wind tax credit was extended for five years, while the ever-volatile onshore-wind-production tax credit stays alive through 2021. The federal tax credit for installing solar had dropped from 30 percent to 26 percent this year on its way to ending in 2022, but that is now delayed with two more years at the current rate. But if you were hoping for some extension to the electric vehicle tax credit, you’ll be disappointed.
In all, there is some $35 billion in spending on energy research and development over the next five years. Add in the tax credit extensions, HFC phaseout, and other initiatives, and you have a fairly consequential piece of legislation despite the lack of fanfare.