The Energy Act of 2020: A Monumental Climate and Clean Energy Bill

Congress recently passed one of the biggest advancements in clean energy and climate policy in over a decade – the monumental Energy Act of 2020.

Tucked away in the 5,000 page end of year omnibus was a wholly bipartisan, clean energy innovation roadmap.

 

 

The Long Road to Enactment

The Energy Act was an effort spearheaded by then-Chairman Lisa Murkowski (R-AK) and Ranking Member Joe Manchin (D-WV) of the Senate Energy and Natural Resources Committee, Chairman Eddie Bernice Johnson (D-TX) and Ranking Member Frank Lucas (R-OK) of the House Science, Space, and Technology Committee, as well as Chairman Frank Pallone (D-NJ) and then-Ranking Member Greg Walden (R-OR) of the House Energy and Commerce Committee. It represents dozens of individual bills from many members of both parties in both the House and Senate.

This enormous effort started back in 2015 with the Energy Policy Modernization Act (EPMA), an effort to comprehensively update energy policy conducted by Chairman Murkowski and then-Ranking Member Maria Cantwell (D-WA). Similar to the Energy Act in some ways, EPMA was composed of numerous policy proposals spanning energy efficiency, clean energy, grid modernization, and cybersecurity. EPMA was easily passed by the Senate and was successfully conferenced with the House’s North American Energy Security and Infrastructure Act, but the House ended the 114th Congress early without a chance to vote on the final conference report.

Chairman Murkowski tried again in the 115th Congress, introducing the Energy and Natural Resources Act, which combined EPMA with additional natural resources privisons; however, ENRA never received floor time in the Senate.

Beginning in 2019 with a new Ranking Member,Senator Joe Manchin, Murkowski started again with a dual-track approach, this time resolving to report out each individual energy bill from committee separately, while also developing an updated comprehensive energy package. Senators Murkowski and Manchin brought a bipartisan package to the floor of the Senate in February of 2020, called the American Energy Innovation Act (AEIA). AEIA failed to pass a cloture vote due to disagreement over the addition of a bill governing hydrofluorocarbons regulation.

In September, the House of Representatives passed the Clean Energy Jobs and Innovation Act, which included many provisions similar to AEIA. A month later, with the end of the Congress rapidly approaching, The Senate Energy and Natural Resources Committee began pre-conferencing a potential energy package with the House Energy and Commerce Committee and Science, Space, and Technology Committee that could be included in an end of year omnibus bill. The Energy Act of 2020 represents the areas of greatest agreement between the Senate and House energy packages, and was included in the Consolidated Appropriations Act for 2021.

The Scope of the Law

The Energy Act modernizes and refocuses the Department of Energy’s research and development programs on the most pressing technology challenges — scaling up clean energy technologies like advanced nuclear, long-duration energy storage, carbon capture, and enhanced geothermal. Crucially, across all of these technologies, DOE is now empowered to launch the most aggressive commercial scale technology demonstration program in U.S. history. The bill sets up a moonshot of more than 20 full commercial scale demos by the mid-2020s.

It also sets ambitious goals for America to maintain global leadership and increases key clean energy program authorizations by an average of over 50 percent over the next five years.

Here are five key highlights from the bill:

First, the Energy Act re-gears the U.S. Department of Energy’s Office of Fossil Fuel to focus on carbon capture, utilization and storage technologies, and it authorizes a comprehensive carbon capture R&D program, including six large, first-of-a-kind demonstrations for natural gas, coal, and industrial facilities. In addition, it starts serious research and demonstration on carbon removal technologies via creative X-prizes on removing carbon dioxide from the atmosphere.

More specifically, it passed the The Launching Energy Advancement and Development through Innovations in Natural Gas (LEADING Act) directing DOE to conduct critical carbon capture research and development for natural gas power plant applications.

The Enhancing Fossil Fuel Energy Carbon Technology Act (EFFECT Act) was part of the bill and provides DOE with new resources and tools to develop clean technologies. Focus areas include reducing emissions from both coal and natural gas power plants, industrial processes, and direct air capture.

The USE IT Act was also included and would direct EPA to use its existing authority to support carbon utilization and direct air capture research; clarify that carbon capture projects and carbon dioxide pipelines are eligible for expedited permitting reviews; direct the White House Council on Environmental Quality to establish guidance to assist project developers and operators of carbon capture, utilization and storage facilities and CO2 pipelines; and establish task forces to hear input from affected stakeholders for updating and improving guidance over time.

Second, it aims to reinvigorate advanced nuclear energy by formally authorizing the moonshot Advanced Reactor Demonstration Program (ARDP) and the Nuclear Energy Leadership Act (NELA). And, you can’t run the advanced nuclear reactors without advanced fuel – which is why the Energy Act also creates a temporary program to provide that High-Assay Low-Enriched Uranium (HALEU) fuel.

Third, the new law establishes a comprehensive grid scale storage demo program, effectively authorizing the Energy Storage Grand Challenge that former Energy Secretary Dan Brouillette launched at DOE last year and that now Secretary Jennifer Granholm has committed to continuing – along with a joint initiative with the Department of Defense (DOD) to develop long-duration storage technologies, and a program to provide technical assistance to rural and municipal electric utilities. The bill also authorized the Better Energy Storage Technology (BEST) Act to reorient the federal grid scale storage research, development, and demonstration program around ambitious technology goals necessary to facilitate important breakthroughs for grid of the future.

Fourth, it includes significant provisions like the Advanced Geothermal Innovation Leadership (AGILE) Act for advanced always-on renewables like geothermal energy, including programs to demonstrate technologies to enable geothermal anywhere. There are exciting opportunities to transfer technologies from the oil and gas industry and demonstrate the co-production of critical minerals with geothermal energy.

Fifth, the bill includes The Clean Industrial Technologies Act (CITA), which starts a comprehensive crosscutting clean industrial technologies R&D program to lower the cost of cleaner chemicals, materials, and manufacturing.

As well, it contains significant reauthorizations for solar and wind, critical minerals, grid modernization, the DOE’s Office of Technology Transitions, ARPA-E, and much more.

In addition to those key clean energy authorizations, the Energy Act also includes important tax credit extensions, known as 45Q, for clean energy technologies like carbon capture and other credits for new offshore wind developments. And, perhaps the largest climate provision of the Energy Act of 2020 phased out of greenhouse gases called hydrofluorocarbons.

We like to look at this bill as a clean energy roadmap for the destination ahead – implementation.

American consumers, businesses, and power companies will all benefit from the Energy Act of 2020 — once fully funded and implemented, of course.

 

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