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NEW INTEREST IN NUCLEAR: The Biden administration is reportedly floating the idea to Congress of providing production tax credits to keep existing nuclear plants from retiring, in an acknowledgement that the White House can’t meet its aggressive climate goals without maintaining the nation’s largest-zero carbon energy source.
If passed by lawmakers as part of an infrastructure bill, a production tax credit would likely do more to keep nuclear plants online than existing proposals in Congress, analysts told Josh.
Sen. Joe Manchin, the Democratic chairman of the Energy Committee, appealed to Biden in a letter last month to “use all the tools” he has to preserve the United States’s existing nuclear power fleet, in a sign the key swing voter would support a policy like this.
The step would reward nuclear for the level of energy it generates in the same way tax credits subsidize wind and solar production.
Alex Gilbert, project manager of the Nuclear Innovation Alliance, said absent action from Congress, the U.S. could lose as much as one-sixth of nuclear generation by 2025, erasing years of progress in wind and solar growth.
“The existing nuclear fleet is the foundation of U.S. carbon-free energy infrastructure and we must keep that foundation if we want to meet U.S. climate goals for 2030 and beyond,” he told Josh.
Just last week, the last of three reactors shut down at the Indian Point nuclear plant outside New York. Four more reactors operated by Exelon in Illinois are slated for premature closure this year.
A production tax credit is an “essential step,” said Maria Korsnick, president and CEO of the Nuclear Energy Institute.
“We look forward to working with the Administration and Congress to ensure that proposals like a PTC effectively address the economic hurdles our carbon-free nuclear plants are facing,” Korsnick told Josh.
How a federal PTC would stack up: A number of states have implemented credit programs that reward nuclear plants for providing zero-carbon electricity.
At the federal level, a bipartisan proposal — set to be re-introduced this year — by Sens. John Barrasso of Wyoming, the top Republican of the Energy Committee, and Sheldon Whitehouse, Democrat of Rhode Island, would create the first federal subsidies program through the EPA to support nuclear plants at risk of shutting down for economic reasons.
That proposal, part of the American Nuclear Infrastructure Act, could also be attached with Biden’s infrastructure package.
But a production tax credit would likely enable more plants to stay online, GIlbert and other analysts said. “A PTC would likely be larger and less targeted, but it could be more fair and broadly support the whole fleet,” Gilbert said.
The Barrasso and Whitehouse proposal, by contrast, requires the EPA to support financially struggling plants from a fixed budget, so it’s likely only the worst-off would qualify.
Biden is pro-nuclear: The Biden administration’s $2.3 trillion infrastructure proposal promises to “continue to leverage the carbon pollution-free energy provided by existing sources like nuclear,” but it doesn’t specify policies to do so.
The administration also backs bipartisan ideas in Congress for investing in demonstration projects of smaller advanced reactor technologies being developed in the U.S, but those aren’t scheduled to be operational until late this decade.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
GERMANY TO STRENGTHEN CLIMATE TARGETS: Germany is proposing to enhance its climate targets, aiming for net-zero emissions by 2045 — five years earlier than before — and boosting its nearer term reduction goals, according to reports by Bloomberg and the Associated Press.
Under the proposal announced today by Environment Minister Svenja Schulze and Finance Minister Olaf Scholz, Germany would increase its emissions reduction targets from 55% to 65% below 1990 levels by 2030, and to 88% by 2040. Chancellor Angela Merkel’s Cabinet still must approve the proposal. Germany’s 2030 pledge would be the second most aggressive in the world behind the UK’s goal of a 68% cut from 1990 levels.
To meet the new goals, Germany would need to move up its date to phase out coal — currently targeted for 2038. Germany was the global leader in new renewable capacity in electricity, according to Climate Action Tracker, but additions of wind and solar have slowed down significantly in recent years.
US HAS HOTTEST MARKET FOR RENEWABLES: The U.S. is the most attractive market for renewables investment, according to an analysis from IHS Markit this morning.
The analysis evaluated each country on the basis of several categories including, current policy supporting non-hydro renewables, including solar, onshore wind, and offshore wind, along with market fundamentals, investor friendliness, infrastructure readiness, revenue risks and return expectations, and more.
IHS Markit attributed the top ranking for the U.S. to “sound market fundamentals” and the availability of “attractive” policy support in the form of tax credits slated to phase down in coming years.
Germany has the second ranked renewables market, followed by China, France, and Spain.
MORE CLEAN ENERGY MEANS SOARING NEED FOR CRITICAL MINERALS: Global demand for critical minerals is set to spike sharply to support more clean energy, and the United States and other countries must grapple with stabilizing a supply that is currently dominated by China, the International Energy Agency says in a new report this morning.
The world’s appetite for critical minerals for clean energy could expand by as much as six times by 2040 as governments strive to reach net-zero emissions by midcentury, the IEA found.
The IEA report also points to vulnerabilities within the world’s critical minerals supply chain, predominantly that production and processing are largely concentrated in a few nations. Most notably, China accounted for 60% of global production of rare earth elements in 2019, as well as 50% to 70% of the refining capacity for lithium and cobalt and nearly 90% of the refining capacity for rare earth elements.
More on the new report in Abby’s story posted this morning.
OIL DEMAND FALLS: U.S. oil demand fell back again to 19.7 million barrels per day last week, from 20.4 million b/d the week prior, continuing the up-and-down trend.
Gasoline consumption, along with jet fuel and diesel demand, all dropped slightly, the Energy Information Administration said today in its Weekly Petroleum Status report.
But oil prices are up this morning after EIA also reported the largest decrease in crude oil inventories since January, with a draw of 8 million barrels from the previous week.
TEXAS MOVES TO PROTECT FOSSIL FUELS: The Texas House passed legislation yesterday that would require state entities like pension funds to divest from companies that pull support from, or “boycott,” the oil and gas industry.
The bill, first proposed in the Senate, is expected to be signed by GOP Gov. Greg Abbott.
It mirrors a concern among Republicans in Congress about banks and asset managers dropping fossil fuel clients because of climate change concerns.
Another bill, approved by the Senate and heading to Abbott’s desk, would prevent Texas cities and towns from banning natural gas hookups in new construction of homes, subdivisions, and other buildings. Texas is joining other Republican-led states that have preemptively blocked gas bans in response to more than 40 cities in California, along with other other municipalities, that have taken steps to restrict gas use in new buildings.
The Texas Tribune has more.
MOST COAL PLANTS ARE COSTLIER TO OPERATE THAN NEW RENEWABLES: The majority (80%) of existing U.S. coal plants are either more expensive to operate than new wind and solar power or are slated to retire by 2025, according to new research this morning from Energy Innovation.
Many of the large coal plants that remain economic are just barely hanging on, the research also notes. Energy Innovation expects if renewable energy costs continue declining steadily or coal capacity factors decrease, those plants will also become uneconomic.
Additional transmission to support renewable energy, too, could lower the costs for new wind and solar, helping to push out coal power, the report says. Energy Innovation notes one of the coal plants it found with the cheapest operating costs, the Gerald Gentleman plant in Nebraska, has attracted interest from renewable energy developers that want to utilize its transmission capacity.
Energy Innovation also estimates significant emissions from the remaining U.S. coal fleet, on the order of more than 1 billion tons of carbon dioxide each year, as well as more than 600,000 tons of nitrous oxide and more than 900,000 tons of sulfur dioxide per year.
SCHUMER’S PLAY TO CLEAN UP BUSES: Senate Majority Leader Chuck Schumer, along with Sen. Sherrod Brown, unveiled a $73 billion proposal yesterday to replace tens of thousands of transit buses, vans, and other vehicles with zero-emission models.
Their plan comes as lawmakers gear up for negotiations over Biden’s $2.3 trillion infrastructure and climate plan. Schumer, in a tweet, said he would work with Biden to include the clean transit legislation in the broader infrastructure plan.
Schumer’s plan is in line with investment the Center for Transportation and Environment says is needed to shift to an all zero-emissions bus fleet by 2035, according to a fact sheet on the bill. The Center for Transportation and Environment found such a transition would cost between $56 billion and $89 billion.
It might not be a heavy lift to convince Biden to include Schumer’s clean bus plan in the infrastructure package. Biden’s proposal already includes funding to replace 50,000 diesel buses and electrify at least 20% of the U.S. school bus fleet.
SHELL LAUNCHES FIRST ELECTRIC CAR CHARGING HUB: The oil giant opened an electric vehicle charging hub, featuring eight rapid chargers, in central Paris, and it is on track to open a second charging hub near the city’s airport by the end of the year, Shell announced this morning.
The charging hubs come as Shell is moving to diversify its business as it grapples with how to operate in a low-carbon world. The oil giant has set a goal to operate a network of around 500,000 electric vehicle charging points by 2025.
The Rundown
Reuters French parliament approves climate change bill to green the economy
Wall Street Journal US push for carbon-neutral ships expected to reveal industry divisions
Washington Post NOAA unveils new US climate ‘normals’ that are warmer than ever
Bloomberg BlackRock backed climate proposals, but key votes are yet to come
Calendar
THURSDAY | MAY 6
1 p.m. Energy Secretary Jennifer Granholm will testify remotely on DOE’s FY 2022 budget request before the House Appropriations Committee’s Energy and Water Development Subcommittee.
TUESDAY | MAY 11
10 a.m. 216 Hart. The Senate Environment and Public Works Committee’s Subcommittee on Transportation and Infrastructure will hold a hearing titled, “Equity in Transportation Infrastructure: Connecting Communities, Removing Barriers, and Repairing Networks across America.”
THURSDAY | MAY 13
10:30 a.m. The House Energy and Commerce Committee’s Environment and Climate Change Subcommittee will hold a remote hearing on Superfund provisions in the “CLEAN Future Act.”
