Daily on Energy: New renewables group seeks spot as lobbying power during Biden administration

Zichal, who advised President-elect Joe Biden’s campaign and served as a top climate official in the Obama White House, joined the American Clean Power Association as its CEO earlier this month. The trade group, an expansion of the American Wind Energy Association, formally launches Jan 1.

“Our industry is growing, and the increased size, scope, and budget of ACP is going to be a reflection of that reality,” Zichal told Abby in a recent interview. The new trade group will represent every faction of the renewable energy industry, including not just wind and solar power, but also energy storage, clean energy utilities, transmission companies, and corporate renewable energy buyers.

Zichal says ACP is “well-positioned” to partner with the Biden administration, especially as Biden looks to link addressing climate change with creating jobs.

In a report unveiled last week with Wood Mackenzie, ACP argues reaching a 50% renewable energy grid by 2030 could create nearly 1 million jobs. The report found administrative action alone, such as setting renewable energy targets on federal lands and speeding up permitting of renewable power, could lead to 37% renewables on the grid.

Policy priorities for Biden: Zichal said ACP is still in the process of identifying policy priorities for the Biden team. In the short term, she said, Biden will have to grapple with undoing decisions made by the Trump administration, such as policies that have slowed offshore wind development and weaker fuel economy standards that she said ACP’s energy storage members track closely.

Building out more transmission to carry wind and solar power from where it is generated to population centers is certainly a “front and center” issue for ACP, Zichal said. (ACP’s recent report identifies a need for up to $90 billion to upgrade transmission lines to move more renewable power).

But Zichal added that she’s learned in her short time with ACP that renewable energy’s challenges “run the gamut,” such as trade policy and regulations at the Interior Department involving offshore wind.

“Right now, I don’t want to put one of those things in front of the other because I think what we have learned from the growing body of scientific evidence about climate change is that we need to move as quickly and as effectively as we can to deploy renewables,” she said.

What about the Hill? Zichal said she sees opportunities to work with Republican lawmakers on policies to boost renewable power, especially as a job creator as more red states see booming wind and solar industries.

“Everybody’s coming to realize that as a trillion dollar industry, we have a lot to bring to the table,” she said.

Zichal also dismissed complaints from some Republican lawmakers that bringing more renewable energy on the grid jeopardizes electric reliability. Those lawmakers have blamed California’s rolling blackouts over the summer on its increasing reliance on variable solar and wind power.

“Reliability is a very real issue and one that we take seriously,” Zichal said, but she added that the industry is working to put the right set of policies and technology in place to ensure the lights stay on.

“Over time, we are confident that from a technology perspective, this is something that is solvable,” she added.

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WE HAVE A CONFIRMED ENERGY INNOVATION DEAL: Congress finalized an omnibus spending bill this weekend that will feature a package of clean energy innovation measures, as Josh first reported last week.

The legislative text is pending any hour now and it’s likely to include big-ticket items boosting a host of technologies, including advanced nuclear power, energy storage, carbon capture utilization, and direct air capture.

It also includes a compromise measure to phase down hydrofluorocarbons, or HFCs, the climate-warming refrigerant, Democratic leaders confirmed last night.

A summary of the agreement by Democratic Senate leader Chuck Schumer and Speaker Nancy Pelosi says it would also extend clean energy tax breaks that were at risk of phasing down. That’s expected to include a two-year extension of the solar investment tax credit, a one-year extension of the wind production tax credit, five more years for an offshore wind tax subsidy, and two additional years for the 45Q credit for carbon capture and storage.

Marty Durbin, senior vice president of policy at the Chamber of Commerce, hailed the package as the first significant energy bill since 2007 and the “biggest action Congress has ever taken to address climate change.”

A host of centrist environmental and labor groups also advocated for the innovation deal, while some of the most liberal groups opposed it mainly because of its support for nuclear and carbon capture.

DOE’S ENERGY STORAGE STRATEGY: The Trump administration Energy Department this morning released what it’s calling the first comprehensive strategy to bolster development of energy storage technologies that are key to fostering growth in use of wind and solar.

The “roadmap” is part of the Energy Storage Grand Challenge the department introduced in January. Energy Secretary Dan Brouillette said the agency is setting a goal to develop and domestically manufacture energy storage technologies that can meet “all U.S. market demands” by 2030 in order to “position the United States as a global leader in energy storage solutions.”

As part of that, DOE is shooting for a 90% reduction in the levelized cost of long-duration storage by 2030, compared to 2020 levels.

It is also aiming for a 44% drop by the end of this decade in the cost of manufacturing a battery pack that can power a 300-mile range electric vehicle.

FANNON…NET-ZERO TARGETS HINGE ON CRITICAL MINERALS: The top energy official at President Trump’s State Department said Friday that Biden would be unable to meet his goal for net-zero emissions unless he prioritizes boosting the development of critical minerals and establishing a more reliable and secure supply chain.

“They have very ambitious clean energy targets and net-zero targets and you cannot achieve these targets without having the responsible supply chain for the future,” Fannon, the U.S. secretary of state for energy resources, told Josh on a press call.

Fannon said, based on transition conversations the State Department has had with the Biden team, he has “every expectation” the incoming administration would continue a project he set up, called the Energy Resource Governance Initiative, or ERGI, alongside Australia, Botswana, Canada, and Peru, that seeks to provide advice for countries on best practices for handling key energy minerals.

The State Department created an online toolkit for improving the safety of mining, which is a problem right now because the largest reserves of metals and minerals for renewable technologies, such as lithium, cobalt, and nickel for batteries, are found in weak states with poor governance records.

“This is not just the U.S. alone policy,” Fannon said. “It has strong support from the founding members. They would like to see this continue as well. We have build a incredible degree of momentum.”

Asked to name achievements from the initiative, Fannon said, “We changed the level of awareness in the global community” about the need for a responsibly developed critical mineral sector, citing as an example the European Union’s unveiling in September of a “action plan on critical raw materials.”

BONUS…FANNON ON SOLARWINDS CYBERATTACK: Fannon also said a monthslong cyberattack that breached the networks of the Energy Department and FERC demonstrates the vulnerability of U.S. energy systems as it becomes more digital and diffuse.

“What it really does is underscores the potential new vulnerability which as you see the digitization of these energy systems around the world, the growth of scaled renewable technology, battery technology, the development of autonomous driving, of artificial intelligence, all of these creates potential new vulnerabilities to our systems,” Fannon said.

SHELL’S BIG WRITE-DOWN: Shell announced today it would write down the value of its oil and gas assets by up to $4.5 billion, signaling the continued struggles of the industry to recover from the price crash from the coronavirus pandemic.

The European energy giant said its oil and gas production business would likely report a third consecutive loss in the fourth quarter of this year. Shell attributed the write-down to impairments on its Appomattox oil and gas field in the Gulf of Mexico, along with charges related to the closure of refineries and unfavorable LNG contracts.

Shell this year has announced plans to accelerate its clean energy transition, aiming to be a “net-zero energy business” by mid-century, including the products it sells. The company is planning to unveil updates to its strategy for doing so in February.

MEET BIDEN’S CLIMATE TEAM: Biden on Saturday formally introduced the team of domestic Cabinet and White House officials who he will task with implementing his climate agenda for reaching net-zero emissions by 2050 and carbon-free electricity by 2035.

Here’s a quick rundown of some of their remarks.

*Jennifer Granholm, Biden’s nominee for Energy secretary, focused on the importance of developing clean energy technologies, framing it as an economic competitiveness issue. The former governor of Michigan cited her experience helping to retool the auto industry after the Great Recession, preparing it for an electric future.

“Over the next two decades, countries will invest trillions of dollars in electric cars, solar panels, wind turbines, and energy-efficient appliances and buildings. Millions of good-paying jobs will be created — but where will those jobs be?” she said.

“In China, or other countries fighting tooth-and-nail to corner the clean energy market? Or here in America?”

*Rep. Deb Haaland, tabbed to be Interior secretary, spoke of her personal story and historic appointment as the potential first Native American Cabinet secretary. She emphasized that Interior, as the overseer of public lands, has a role to play in addressing climate change and “environmental injustice.”

“We know that climate change can only be solved with participation of every department and of every community coming together in common purpose,” Haaland said.

*Michael Regan, Biden’s pick to be EPA administrator, underscored the president-elect’s commitment to addressing the disproportionate effects pollution has on minority and low-income people. If confirmed, Regan, who currently serves as North Carolina’s top environment official, would be the first black man to lead the agency and only its second black administrator.

“When President-elect Biden called out the plight of fenceline communities during the campaign, he made it clear that we would no longer just deal with issues up to the fencelines of facilities — we would actually see the people on the other side of those fences,” Regan said.

Regan also signaled an openness to partner with industry, saying environmental challenges “can’t be solved by regulation alone.”

*Gina McCarthy, appointed to serve as Biden’s national climate adviser, painted climate change as a grave threat, but also stressed that policies to address emissions can offer opportunities to create jobs and boost public health.

Biden “has put together the strongest climate plan ever raised to this level of leadership,” McCarthy said, adding she’ll work to turn his plan “into promises kept by marshaling every part of our government, working directly with communities, and harnessing the forces of science — and the values of environmental justice.”

FED’S BRAINARD SAYS CLIMATE SCENARIO ANALYSIS ‘POTENTIALLY USEFUL’: Incorporating climate change into financial stress testing can help banks and other financial institutions understand how they may be exposed to economic risks from climate change and how they could respond, said Lael Brainard, a member of the Federal Reserve’s Board of Governors.

“Climate change is inherently complex and it’s very uncertain, and so with that high degree of uncertainty, scenario analysis is valuable,” Brainard said Friday during a virtual event hosted by the Center for American Progress. She said scenario analysis can allow banks and other institutions to explore multiple different climate outcomes, get a sense of the scope of the risk they face, and determine they might adjust their business models to account for that risk.

In recent weeks, the Federal Reserve has been more actively exploring how to account for the financial risks posed by climate change in its oversight of banks and other institutions. Brainard said banks are already investing to do their own climate scenario analysis and they’re asking to work with the Fed to help develop those capacities. Global banks are also exploring climate stress testing, she said.

Brainard expects climate scenario analysis to be distinct from existing regulatory stress testing, however, because it would be conducted over a much longer time horizon.

About that GOP opposition: Brainard also dismissed outcry from nearly four dozen Republican lawmakers to the Fed joining a global network of banks working on climate change, saying that U.S. banks are backing the move.

“I do think that private sector entities do understand the value of participation in that network,” she said, noting the Fed had already been participating informally in the network before it was accepted as a formal member last week.

“Climate change is not confined to any particular jurisdiction, and the financial impacts most certainly cross borders,” she added. “There’s a lot we can learn from our counterparts.”

The Rundown

New York Times In late rush, Trump grants energy and mining firms access to public lands

Wall Street Journal Tesla stock joins the S&P 500: A game changer

Washington Post Washington Monument shuttered after interior secretary tests positive for coronavirus

Calendar

MONDAY | DEC. 21

The House is in session and could vote on an omnibus spending bill and pandemic response package