Summary

The Biden Administration has committed the United States to net-zero emissions by 2050. Meeting this commitment requires drastic decarbonization transitions across all sectors of society at a pace never seen before. This can be made possible by positive tipping points, which demarcate thresholds in decarbonization transitions that, once crossed, ensure rapid progress towards completion. A new generation of economic models enables the analysis of these tipping points and the evaluation of effective policy interventions. 

The Biden Administration should undertake a three-pronged strategy for leveraging the power of positive tipping points to create a larger-than-anticipated return on investment in the transition to a clean energy future. First, the President’s Council of Advisors on Science and Technology (PCAST) and the Council of Economic Advisors (CEA) should evaluate new economic models and make recommendations for how agencies can incorporate such models into their decision-making process. Second, federal agencies should integrate positive tipping points into the research agendas of existing research centers and programs to uncover additional decarbonization opportunities. Finally, federal agencies should develop decarbonization strategies and policies based on insights from this research.

Challenge and Opportunity

Climate change brings us closer each year to triggering negative tipping points, such as the collapse of the West Antarctic ice sheet or the Atlantic Meridional Overturning Circulation. These negative tipping points, driven by self-reinforcing environmental feedback loops, significantly accelerate the pace of climate change. 

Meeting the Biden Administration’s commitment to net-zero emissions by 2050 will reduce the risk of these negative tipping points but requires the United States to significantly accelerate the current pace of decarbonization. Traditional economic models used by the federal government and organizations such as the International Energy Agency consistently underestimate the progress of zero-emission technologies and the return on investment of policies that enable a faster transition, resulting in the agency’s “largest ever upwards revision” last year. A new school of thought presents “evidence-based hope” for rapidly accelerating the pace of decarbonization transitions. Researchers point out that our society consists of complex and interconnected social, economic, and technological systems that do not change linearly under a transition, as traditional models assume; rather, when a positive tipping point is crossed, changes made to the system can lead to disproportionately large effects. A new generation of economic models has emerged to support policymakers in understanding these complex systems in transition and identifying the best policies for driving cost-effective decarbonization.

At COP26 in 2021, leaders of countries responsible for 73% of world emissions, including the United States, committed to work together to reach positive tipping points under the Breakthrough Agenda. The United Kingdom and other European countries have led the movement thus far, but there is an opportunity for the United States to join as a leader in implementing policies that intentionally leverage positive tipping points and benefit from the shared learnings of other nations. 

Domestically, the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) include some of the strongest climate policies that the country has ever seen. The implementation of these policies presents a natural experiment for studying the impact of different policy interventions on progress towards positive tipping points.

How do positive tipping points work?

Figure 1. Diagram of a system and its positive tipping point. The levers for change on the left push the system away from the current high-emission state and towards a new net-zero state. As the system moves away from the current state, the self-reinforcing feedback loops in the system become stronger and accelerate the transition. At the positive tipping point, the feedback loops become strong enough to drive the system towards the new state without further support from the levers for change. Thus, policy interventions for decarbonization transitions are most crucial in the lead up to a positive tipping point. (Adapted from the Green Futures Network.)

Just as negative tipping points in the environment accelerate the pace of climate change, positive tipping points in our social, economic, and technological systems hold the potential to rapidly accelerate the pace of decarbonization (Figure 1). These positive tipping points are driven by feedback loops that generate increasing returns to adoption and make new consumers more likely to adopt (Figure 2):

• Learning by doing: As manufacturers produce more of a technology, they learn how to produce the technology better and cheaper, incentivizing new consumers to adopt it.
  
• Economies of scale: Manufacturers are able to realize cost savings as they increase their production capacity, which they pass on to consumers as lower prices that spur more demand.
  
• Social contagion: The more people adopt a new technology, the more likely other people will imitate and adopt it.
  
• Complementary technology reinforcement: As a technology is adopted more widely, complementary technology and infrastructure emerge to make it more useful and accessible.

The right set of policies can harness this phenomenon to realize significantly greater returns on investment and trigger positive tipping points that give zero-emission technologies a serious boost over incumbent fossil-based technologies.

Figure 2. Examples of positive feedback loops: (a) learning by doing, (b) social contagion, and (c) complementary technology reinforcement.

One way of visualizing progress towards a positive tipping point is the S-curve, where the adoption of a new zero-emission technology grows exponentially and then saturates at full adoption. This S-curve behavior is characteristic of many historic energy and infrastructure technologies (Figure 3). From these historic examples, researchers have identified that the positive tipping point occurs between 10% and 40% adoption. Crossing this adoption threshold is difficult to reverse and typically guarantees that a technology will complete the S-curve.

Figure 3. The historic adoption of a sample of infrastructure and energy systems (top) and manufactured goods (bottom). Note that the sharpness of the S-curve can vary significantly. (Source: Systemiq)

For example, over the past two decades, the Norwegian government helped build electric vehicle (EV) charging infrastructure (complementary technology) and used taxes and subsidies to lower the price of EVs below that of gas vehicles. As a result, consumers began purchasing the cheaper EVs, and over time manufacturers introduced new models of EVs that were cheaper and more appealing than previous models (learning by doing and economies of scale). This led to EVs skyrocketing to 88% of new car sales in 2022. Norway has since announced that it would start easing its subsidies for EVs by introducing two new EV taxes for 2023, yet EV sales have continued to grow, taking up 90% of total sales so far in 2023, demonstrating the difficult-to-reverse nature of positive tipping points. Norway is now on track to reach a second tipping point that will occur when EVs reach price parity with gas vehicles without assistance from taxes or subsidies.

Due to the interconnected nature of social and technological systems, triggering one positive tipping point can potentially increase the odds of another tipping point at a greater scale, resulting in “upward-scaling tipping cascades.” Upward-scaling tipping cascades can occur in two ways: (1) from a smaller system to a larger system (e.g., as more states reach their tipping point for EV adoption, the nation as a whole gets closer to its tipping point) and (2) from one sector to another. For the latter, researchers have identified three super-leverage points that policymakers can use to trigger tipping cascades across multiple sectors:

1. Light-duty EVs → heavy-duty EVs and renewable energy storage: The development of cheaper batteries for light-duty EVs will enable cheaper heavy-duty EVs and renewable energy storage thanks to shared underlying battery technology. The build-out of charging infrastructure for light-duty EVs will also facilitate the deployment of heavy-duty EVs.
   
2. Green ammonia → heavy industries, shipping, and aviation: The production of green ammonia requires green hydrogen as an input, so the growth of the former will spur the growth of the latter. Greater production of green hydrogen and green ammonia will catalyze the decarbonization of the heavy industries, shipping, and aviation sectors, which use these chemicals as fuel inputs.
   
3. Traditional and alternative plant proteins → land use: Widespread consumption of traditional and alternative plant proteins over animal protein will reduce pressure on land-use change for agriculture and potentially restore significant amounts of land for conservation and carbon sequestration.

The potential for this multiplier effect makes positive tipping points all the more promising and critical to understand.

Further research to identify positive tipping points and tipping cascades and to improve models for evaluating policy impacts holds great potential for uncovering additional decarbonization opportunities. Policymakers should take full advantage of this growing field of research by integrating its models and insights into the climate policy decision-making process and translating insights from researchers into evidence-based policies. 

Plan of Action

In order for the government to leverage positive tipping points, policymakers must be able to (1) identify positive tipping points and tipping cascades before they occur, (2) understand which policies or sequences of policies may be most cost-effective and impactful in enabling positive tipping points, and (3) integrate that insight into policy decision-making. The following recommendations would create the foundations of this process.

Recommendation 1. Evaluate and adopt new economic models

The President’s Council of Advisors on Science and Technology (PCAST) and the Council of Economic Advisors (CEA) should conduct a joint evaluation of new economic models and case studies to identify where new models have been proven to be more accurate for modeling decarbonization transitions and where there are remaining gaps. They should then issue a report with recommendations on opportunities for funding further research on positive tipping points and new economic models and advise sub agenciessubagencies responsible for modeling and projections, such as the Energy Information Administration within the Department of Energy (DOE), on how to adopt these new economic models.

Recommendation 2. Integrate positive tipping points into the research agenda of federally funded research centers and programs.

There is a growing body of research coming primarily from Europe, led by the Global Systems Institute and the Economics of Energy Innovation and Systems Transition at the University of Exeter and Systemiq, that is investigating global progress towards positive tipping points and different potential policy interventions. The federal government should foster the growth of this research area within the United States in order to study positive tipping points and develop models and forecasts for the U.S. context.

There are several existing government-funded research programs and centers that align well with positive tipping points and would benefit synergistically from adding this to their research agenda:

• Power, buildings, and heavy industries: The National Renewable Energy Laboratory (NREL), funded by the DOE, has an energy analysis research program that conducts analyses of future systems scenarios, market and policy impacts, sustainability, and techno-economics. This research program would be a good fit for taking on research on positive tipping points in the power, buildings, and heavy industries sectors.

• Transportation: The National Center for Sustainable Transportation (NCST), funded by the Department of Transportation, conducts research around four research themes—Environmentally Responsible Infrastructure and Operations, Multi-Modal Travel and Sustainable Land Use, Zero-Emission Vehicle and Fuel Technologies, and Institutional Change—in order to “address the most pressing policy questions and ensure our research results are incorporated into the policy-making process.” The policy-oriented focus of the NCST makes it a good candidate for conducting research on positive tipping points in the transportation sector under the theme of Institutional Change and translating research results into policy briefs.

• Food and agriculture: The Agriculture and Food Research Initiative’s Sustainable Agriculture Systems program funds research projects that take a systems approach to studying how to promote transformational change in the U.S. food and agriculture system in the face of a changing climate. In the next Request for Applications, the program should include research on positive tipping points in food and agricultural systems as a topic that the program will fund. 

• General: The Science and Technology Policy Institute (STPI), a Federally Funded Research and Development Center (FFRDC) sponsored by the National Science Foundation, conducts research to inform policy decisions by the White House Office of Science and Technology Policy. STPI is another potential candidate for conducting research on positive tipping points in a variety of sectors.

Recommendation 3. Use insights from positive tipping points research to develop and implement policies to accelerate progress towards positive tipping points

Researchers have already identified three super-leverage points around which the federal government should consider developing and implementing policies. As future research is published, the PCAST should make further recommendations on actions that the federal government can take in leveraging positive tipping points.

Super-Leverage Point #1: Mandating Zero-Emission Vehicles (ZEVs) 

ZEV mandates require car manufacturers to sell a rising proportion of ZEVs within their light duty vehicles sales. Ensuring a growing supply of ZEVs results in falling costs and rising demand. Evidence of the effect of such policies in U.S. states, Canadian provinces, and China and future projections suggest that ZEV mandates are a crucial policy lever for ensuring a full EV transition. Such policies rely on the reallocation of private capital rather than government spending, making it particularly cost-effective. Combined with the investments in EV manufacturing and public charging infrastructure in the IRA and IIJA, a national ZEV mandate could radically boost the EV transition. 

A national ZEV mandate is unlikely to pass Congress anytime soon. However, the recently proposed Environmental Protection Agency (EPA) greenhouse gas emissions standards for passenger cars and trucks would effectively require 67% of car sales to be ZEVs by 2032 in order for car manufacturers to comply with the regulations. The proposed standards would provide regulatory strength behind the Biden Administration’s goal of 50% of new cars sold by 2030 to be ZEVs. The EPA should finalize these standards as soon as possible at or above the currently proposed stringency. 

The proposed EPA standards are projected to result in a 50% reduction in the price of EV batteries by 2035. This will have knock-on effects on the cost of batteries for renewable energy storage and battery electric trucks and other heavy-duty vehicles, which would likely bring forward the cost parity tipping point for these technologies by a number of years.

Super-Leverage Point #2: Mandating Green Ammonia Use in Fertilizer Production 

Ammonia is the primary ingredient for producing nitrogen-based fertilizer and requires hydrogen as an input. Traditionally, this hydrogen is produced from natural gas, and the production of hydrogen for ammonia accounts for 1% of global CO₂ emissions. Green hydrogen produced from water and powered by renewable energy would enable the production of green ammonia for nitrogen-based fertilizers.

Based on a DOE tipping point analysis, green ammonia production is one of the most promising areas for initial large-scale deployment of green hydrogen, thanks to its ability to use established ammonia supply chains and economies of scale. Green ammonia production also has one of the lowest green premia in the hydrogen economy. Green ammonia production will enable infrastructure development and cost reductions for green hydrogen to decarbonize other sectors, including shipping, aviation, and heavy industries like steel. 

The Biden Administration should set a target for green ammonia production for domestic fertilizer in the Federal Sustainability Plan similar to India’s draft hydrogen strategy requiring 20% green ammonia production by 2027–2028. The EPA should then propose Clean Air Act carbon emission limits and guidelines for nitrogen-based fertilizer production plants, similar to the recently proposed standards for coal and natural gas power plants, to provide regulatory strength behind that target. These limits would effectively require fertilizer plants to blend a growing percentage of green ammonia into their production line in order to meet emission limits. According to the DOE, the clean hydrogen production tax credit in the IRA has enabled cost parity between green ammonia and fossil-based ammonia, so the EPA should be able to set such limits without increasing food production costs.

Super-Leverage Point #3: Public Procurement to Promote Plant and Alternative Proteins

Shifting protein consumption from meat to plant and alternative proteins can reduce emissions from livestock farming and reduce land use change for meat production. Plant proteins refer to protein-rich plants, such as nuts and legumes, and traditional products made from those plants, such as tofu and tempeh. Alternative proteins currently on the market include plant- and fermentation-based protein products intended to mimic the taste and texture of meat. Studies show that if plant and alternative proteins are able to reach a tipping point of 20% market share, this would ease up 7–15% of land currently used for agriculture to conservation and the restoration of its ability to serve as a carbon sink. 

Public procurement of alternative proteins for federal food programs leverages government spending power to support this nascent market and introduce new consumers to alternative proteins, thus increasing its accessibility and social traction. Last year, the National Defense Authorization Act established a three-year pilot program for the U.S. Navy to offer alternative protein options. The California state legislature also invested $700 million to support schools in procuring more plant-based foods and training staff on how to prepare plant-based meals.

The United States Department of Agriculture (USDA) is a major procurer of food through collaboration between the Agricultural Marketing Service (AMS) and the Food and Nutrition Service (FNS) and distributes the majority of procured food through the Child Nutrition Programs (CNPs), especially the National School Lunch Program (NSLP). Currently, AMS does not procure any traditional or alternative protein products made from plant protein, but USDA guidelines do allow traditional and alternative protein products to fulfill meat/meat alternate requirements for CNPs. The AMS should develop product specifications and requirements for procuring these types of products and assist traditional and alternative protein companies to become USDA food vendors. The FNS should then launch a pilot program spending, for example, 1% of their procurement budget on traditional and alternative protein products. This should be supported by education and training of food service workers at schools that participate in the NSLP on how to prepare meals using traditional and alternative proteins.

Conclusion

The sooner that positive tipping points that accelerate desired transitions are triggered, the sooner that decarbonization transitions will be realized and net-zero goals will be met. Early intervention is crucial for supporting the growth and adoption of new zero-emission technologies. The recommendations above present the foundations of a strategy for leveraging positive tipping points and accelerating climate action.

Acknowledgements

I’d like to acknowledge Erica Goldman for her generous feedback and advice on this piece and for her thought leadership on this topic at FAS.

FAQs about Leveraging Positive Tipping Points to Accelerate Decarbonization

What are the necessary conditions for a positive tipping point?

The key conditions for triggering a positive tipping point are affordability, attractiveness, and accessibility of new zero-emission technologies compared to incumbents. Affordability is often the most crucial condition: achieving price parity with incumbent technologies (with and then without the support of taxes and subsidies) can unlock rapid growth and adoption. Attractiveness refers to consumer preferences about a new technology’s performance, complementary features, or ability to signal social values. Accessibility refers to whether supporting infrastructure or knowledge, such as charging stations for EVs or recipes for cooking alternative proteins, is commonly available to support adoption. Due to the relative nature of these conditions, policymakers can influence them either by making the new technology more affordable, attractive, and accessible or by making the incumbent technology less affordable, attractive, and accessible. Often, a combination of both approaches is required to achieve the optimal effect.

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Are federal policymakers the only actors that can trigger positive tipping points? What about state policymakers?

States can cooperate to identify and coordinate policies that activate upward-scaling tipping cascades into other states and eventually the federal government. A promising example of this is the growing adoption of California’s Advanced Clean Cars II EV sales mandate by Vermont, New York, Washington, Oregon, Rhode Island, New Jersey, Maryland, and soon Colorado, Massachusetts, and Delaware.

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What about individuals and social movements?

Social contagion, mentioned above, is a powerful type of feedback loop that can drive the spread of not just technology adoption but also new behaviors, opinions, knowledge, and social norms. Through social contagion, social movement can be formed, capable of wielding greater influence than the sum of individuals. That influence can then translate into demands for government and industry action to decarbonize. A prime example is Greta Thunberg and the Fridays for Future student movement. Another example is the Social Tipping Point Coalition that in 2021 rallied a coalition of over 100 scientists, universities, nongovernmental and grassroots organizations, and other individuals to petition the new Dutch parliament to implement new climate policies.

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What about industry stakeholders?

Industry has a direct hand in creating the conditions for a positive tipping point through their business models, technological development, and production. Industries are more likely to invest in adopting and improving low- and zero-carbon technologies and practices if the government clearly signals that it will back the transition, resulting in positive, reinforcing “ambition loops” between government climate policy and industry climate action. Industry coordination is also key to ensuring that new technologies are complementary and that infrastructure supporting a technology is developed alongside the technology itself. For example, coordination between EV companies is necessary to develop compatible charging mechanisms across manufacturers. Coordination between charging companies and EV companies can help charging companies identify which geographies have greatest demand for chargers.

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What about international coordination?

International coordination strengthens positive feedback loops and accelerates cost reductions for green technologies. For example, a recent study suggests that if the three largest car markets—the United States, Europe, and China—implement zero-emission vehicle (ZEV) sales mandates (i.e., requirements that an increasing percentage of each car manufacturer’s sales must be EVs), EVs will be able to reach cost parity with gas vehicles five years sooner than in the scenario without those ZEV mandates.

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What has the federal government done to identify or accelerate positive tipping points so far?

The U.S. Global Change Research Program’s 2022–2031 Strategic Plan includes tipping points and nonlinear changes in complex systems as two of its research priorities. Specifically, the Strategic Plan highlights the need to investigate “the potential for beneficial tipping points” and incorporate research on nonlinearity in economics-based models to evaluate societal decisions in future National Climate Assessments. However, it will take another four to five years to produce the next National Climate Assessment under this strategic plan. (The fifth National Climate Assessment, which is expected to be published this fall, was drafted before the new strategic plan was published.) Thus, additional executive and agency action is necessary to operationalize positive tipping points in the federal government before the next National Climate Assessment is released.

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How can we track progress towards positive tipping points?

The federal government currently collects some data on the sales and adoption rates of the relatively more mature clean energy technologies, such as electric vehicles. A 2022 Bloomberg report attempted to identify “early-stage tipping points” at around 5% adoption for 10 clean energy technologies that reflect when their adoption becomes measurably exponential and compare their adoption curves across countries globally. Beyond adoption rates, a number of additional factors indicate progress towards positive tipping points, such as the number of companies investing in a zero-emission technology or the number of states adopting regulations or incentives that support zero-emission technologies in a sector. Tracking these indicators can help policymakers sense when a system is approaching a positive tipping point. The nonprofit Systems Change Lab currently tracks the adoption of decarbonization technologies and factors that affect decarbonization transitions on a global scale. Philanthropic funding or a public-private partnership with the Systems Change Lab could leverage their existing infrastructure to track tipping point indicators on a national scale for the United States.

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What are the risks or potential unintended consequences to consider when crossing a positive tipping point?

Approaching a positive tipping point first requires a system to become destabilized in order to make change possible. Once a positive tipping point is crossed, the system then accelerates towards a new state and begins to restabilize. However, the destabilization during the transition can have unintended consequences due to the rapid shift in how social, economic, and technological systems are organized and how resources are distributed within those systems. Potential risks include economic precarity for people employed in rapidly declining industries and resulting social instability and backlash. This can potentially exacerbate inequality and undesirable social division. As such, policies ensuring a just transition must be implemented alongside policies to accelerate positive tipping points. Research on the interaction between these policies is currently ongoing. It is essential that decisions to develop policies that accelerate movement towards positive tipping points always consider and evaluate the potential for unintended consequences.

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Summary

With the passage of the Infrastructure Investment and Jobs Act (IIJA), the CHIPS and Science Act, and the Inflation Reduction Act (IRA), the United States has outlined a de facto industrial policy to facilitate and accelerate the energy transition while seeking energy security and supply chain resilience. The rapid pace of industrial transformation driven by the energy transition will manifest as a human capital challenge, and the workforce will be realigned to the industrial policy that is rapidly transforming the labor market. The energy transition, combined with nearshoring, will rapidly retool the global economy and, with it, the skills and expertise necessary for workers to succeed in the labor market. A rapid, massive, and ongoing overhaul of workforce development systems will allow today’s and tomorrow’s workers to power the transition to energy security, resilient supply chains, and the new energy economy—but they require the right training opportunities scaled to match the needs of industry to do so.

Policymakers and legislators recognize this challenge, yet strategies and programs often sit in disparate parts of government agencies in labor, trade, commerce, and education. A single strategy that coordinates a diverse range of government policies and programs dedicated to training this emerging workforce can transform how young people prepare for and access the labor market and equip them with the tools to have a chance at economic security and well-being.

Modeled after the U.S. Department of Labor’s (DOL) Trade Adjustment Assistance Community College and Career Training (TAACCCT) program, we propose the Energy Security Workforce Training (ESWT) Initiative to align existing U.S. government support for education and training focused on the jobs powering the energy transition. The Biden-Harris Administration should name an ESWT Coordinator to manage and align domestic investments in training and workforce across the federal government. The coordinator will spearhead efforts to identify skills gaps with industry, host a ESWT White House Summit to galvanize private and social sector commitments, encourage data normalization and sharing between training programs to identify what works, and ensure funds from existing programs scale evidence-based sector-specific training programs. ESWT should also encompass an international component for nearshored supply chains to perform a similar function to the domestic coordinator in target countries like Mexico and promote two-way learning between domestic and international agencies on successful workforce training investments in clean energy and advanced manufacturing.

Challenge and Opportunity

With the passage of the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, the United States has a de facto industrial policy to facilitate and accelerate the energy transition while seeking energy security and supply chain resilience. However, our current workforce investments are not focused on the growing green skills gap. We require workforce investment aligned to the industrial policy that is rapidly transforming the labor market, to support both domestic jobs and the foreign supply chains that domestic jobs depend on. 

Preparing Americans to Power the Energy Transition

The rapid pace of industrial transformation driven by the energy transition will manifest as a human capital challenge. The energy transition will transform and create new jobs—requiring a massive investment to skill up the workers who will power the energy transition. Driving this rapid transition are billions of dollars slated for incentives and tax credits for renewable energy and infrastructure, advanced manufacturing, and supply chain creation for goods like electric vehicle batteries over the coming years. The vast upheaval caused by the energy transition combined with nearshoring is transforming both current jobs as well as the labor market young people will enter over the coming decade. The jobs created by the energy transition have the potential to shift a whole generation into the middle class while providing meaningful, engaging work. 

Moving low-income students into the middle class over the next 10 years will require that education and training institutions meet the rapid pace of industrial transformation required by the energy transition. Education and training providers struggle to keep up with the rapid pace of industrial transformation, resulting in skills gaps. Skills gaps are the distance between the skills graduates leave education and training with and the skills required by industry. Skills gaps rob young people of opportunities and firms of productivity. And according to LinkedIn’s latest Green Economy report, we are facing a green skills gap—with the demand for green skills outpacing the supply in the labor force. Firms have cited skills gaps in diverse sectors related to the energy transition, including infrastructure, direct air capture, electromobility, and geothermal power. 

Graduates with market-relevant skills earn between two and six times what their peers earn, based on evaluations of International Youth Foundation’s (IYF) programming. In addition, effective workforce development lowers recruitment, selection, and training costs for firms—thereby lowering the transaction costs to scale moving people into the positions needed to power the energy transition. Industrial transformation for the energy transition involves automation, remote sensing, and networked processes changing the role of the technician—who is no longer required to execute tasks but instead to manage automated processes and robots that now execute tasks. This changes the fundamental skills required of technicians to include higher-order skills for managing processes and robots. 

We will not be able to transform industry or seize the opportunities of the new energy future without overhauling education and training systems to build the skills required by this transformation and the industries that will power it. Developing higher-order thinking skills means changing not only what is taught but how teaching happens. For example, students may be asked to evaluate and make actionable recommendations to improve energy efficiency at their school. Because many of these new jobs require higher-order thinking skills, policy investment can play a crucial role in supporting workers and those entering the workforce to be competitive for these jobs. 

Creating Resilient Supply Chains, Facilitating Energy Security, and Promoting Global Stability in Strategic Markets

Moving young people into good jobs during this dramatic economic transformation will be critical not only in the United States but also to promote our interests abroad by (1) creating resilient supply chains, 2) securing critical minerals, and (3) avoiding extreme labor market disruptions in the face of a global youth bulge. 

Supply chain resilience concerns are nearshoring industrial production—shifting the demand for industrial workers across geographies at a shocking scale and speed—as more manufacturing and heavy industries move back into the United States’ sphere of influence. The energy transition combined with nearshoring will rapidly retool the global economy. We need a rapid, massive, and ongoing overhaul of workforce development systems at home and abroad. The scale of this transition is massive and includes complex, multinational supply chains. Supply chains are being reworked before our eyes as we nearshore production. For example, the port of entry in Santa Teresa, New Mexico, is undergoing rapid expansion in anticipation of explosive growth of imports of spare parts for electric vehicles manufactured in Mexico. These shifting supply chains will require the strategic development of a new workforce.

The United States requires compelling models to increase its soft power to secure critical minerals for the energy transition. Securing crucial minerals for the energy transition will again reshape energy supply chains, as the mineral deposits needed for the energy transition are not necessarily located in the same countries with large oil, gas, or coal deposits. The minerals required for the energy transition are concentrated in China, Democratic Republic of Congo, Australia, Chile, Russia, and South Africa. We require additional levers to establish productive relationships to secure the minerals required for the energy transition. Workforce investments can be an important source of soft power. 

Today’s 1.2 billion young people today make up the largest and most educated generation the world has ever seen, or will ever see, yet they face unemployment rates at nearly triple that of adults. Globally the youth unemployment rate is 17.93% vs. 6.18% for adults. The youth unemployment rate refers to young people aged 15–24 who are available for or seeking employment but who are unemployed. While rich countries have already passed through their own baby booms, with accompanying “youth bulges,” and collected their demographic dividends to power economic growth and wealth, much of the developing world is going through its own demographic transition. While South Korea experienced sustained prosperity once its baby boomers entered the labor force in the early 2000s, Latin America’s youth bulge is just entering the labor force. In regions like Central America, this demographic change is fueling a wave of outmigration. In Sub-Saharan Africa, the youth bulge is making its way through compulsory education with increasing demands for government policy to meet high rates of youth unemployment. It is an open question whether today’s youth bulges globally will drive prosperity as they enter the labor market. Policymakers are faced with shaping labor force training, and government policy rooted in demonstrable industry needs to meet this challenge. At the same time, green jobs is already one of the most rapidly growing occupations. The International Energy Agency (IEA) projects that adopting clean energy technologies will generate 14 million jobs by 2030, with 16 million more to retrofit and construct energy-efficient buildings and manufacture new energy vehicles. At the same time, the World Economic Forum’s 2023 future of jobs report cites the green transition as the key driver of job growth. However, the developing world is not making the corresponding investments in training programs for the green jobs that are driving growth. 

Alignment with Existing Initiatives

The Biden-Harris Administration’s approach to the energy transition, supply chain resilience, and energy security must address this human capital challenge. Systemic approaches to building the skills for the energy transition through education and training complement the IRA’s incentivized apprenticeships, and focus investments from the IIJA, by building out a complete technical, vocational, education and training system oriented toward building the skills required for the energy transition. We propose a whole-of-government approach that integrates public investment in workforce training to focus on the energy transition and nearshoring with effective approaches to workforce development to address the growing green skills gap that endangers youth employment, the energy transition, energy security and supply chain resilience. 

The Biden-⁠Harris Administration Roadmap to Support Good Jobs demonstrates a commitment to building employment and job training into the Investing in America Agenda. The Roadmap catalogs programs throughout the federal government that address employment and workforce training authorized in recent legislation and meant to enable more opportunities for workers to engage with new technology, advanced manufacturing, and clean energy. Some programs had cross-sector reach, like the Good Jobs Challenge that reached 32 states and territories authorized in the American Rescue Plan to invest in workforce partnerships, while others are more targeted to specific industries, like the Battery Workforce Initiative that engages industry in developing a battery manufacturing workforce. The Roadmap’s clearinghouse of related workforce activities across the federal ecosystem presents a meaningful opportunity to advance this commitment by coordinating and strategically implementing these programs under a single series of objectives and metrics. 

Identifying evidence-driven training programs can also help fill the gap between practicums and market-based job needs by allowing more students access to practical training than can be reached solely by apprenticeships, which can have high individual transaction costs for grantees to coordinate. Additionally, programs like the Good Jobs Challenge required grantees to complete a skills-gap analysis to ensure their programs fit market needs. The Administration should seek to embed capabilities to conduct skills-gap analyses first before competitive grants are requested and issued to better inform program and grant design from the beginning and to share that learning with the broader workforce training community. By using a coordinated initiative to engage across these programs and legislative mandates, the Administration can create a more catalytic, scalable whole-of-government approach to workforce training.

Collaborating on metrics can also help identify which programs are most effective at meeting the core metrics of workforce training—increased income and job placements—which often are not met in workforce programs. This initiative could be measured across programs and agencies by (1) the successful hiring of workers into quality green jobs, (2) the reduction of employer recruitment and training costs for green jobs, and (3) demonstrable decreases in identified skills gaps—as opposed to a diversity of measures without clear comparability that correspond to the myriad agencies and congressional committees that oversee current workforce investments. Better transferable data measured against comparable metrics can empower agencies and Congress to direct continued funds toward what works to ensure workforce programs are effective.

The DOL’s TAACCCT program provides a model of how the United States has successfully invested in workforce development to respond to labor market shocks in the past. Building on TAACCCT’s legacy and its lessons learned, we propose focusing investment in workforce training to address identified skills gaps in partnership with industry, engaging employers from day one, rather than primarily targeting investment based on participant eligibility. When investing in bridging critical skills gaps in the labor market, strategy and programs must be designed to work with the most marginalized communities (including rural, tribal, and Justice40 communities) to ensure equitable access and participation. 

Increased interagency collaboration is required to meet the labor market demands of the energy transition, both in terms of domestic production in the United States and the greening of international supply chains from Mexico to South Africa. Our proposed youth workforce global strategy, the Energy Security Workforce Training Initiative outlined below provides a timely opportunity for the Administration to make progress on its economic development, workforce and climate goals. 

Plan of Action

We propose a new Energy Security Workforce Training Initiative to coordinate youth workforce development training investments across the federal government, focused on critical and nearshored supply chains that will power energy security. ESWT will be charged with coordinating U.S. government workforce strategies to build the pipeline for young people to the jobs powering the energy transition. ESWT will rework existing education and training institutions to build critical skills and to transform how young people are oriented to, prepared for, and connected to jobs powering the energy transition. ESWT will play a critical role in cross-sector and intergovernmental learning to invest in what works and to ensure federal workforce investments in collaboration with industry address identified skills gaps in the labor market for the energy transition and resilient supply chains. Research and industry confirmation would inform investments by the Department of Energy (DOE), Department of Education (ED), Department of Commerce (DOC), and Department of Labor (DOL) toward building identified critical skills through scalable means with marginalized communities in mind. A key facet of ESWT will be to normalize and align the metrics by which federal, state, and local partners measure program effectiveness to allow for better comparability and long-term potential for scaling the most evidence-driven programs.

The ESWT should be coordinated by the National Economic Council(NEC) and DOC, particularly the Economic Development Administration. Once established, ESWT should also involve an international component focused on workforce investments to build resilience in nearshore supply chains on which U.S. manufacturing and energy security rely. Mexico should serve as an initial pilot of this global initiative because of its intertwined relationship with U.S. supply chains for products like EV batteries. Piloting a novel international workforce training program through private sector collaboration and U.S. Agency for International Development (USAID), DOL, and U.S. International Development Finance Corporation (DFC) investments could help bolster resilience for domestic jobs and manufacturing. Based on these results, ESWT could expand into other geographies of critical supply chains, such as Chile and Brazil. To launch ESWT, the Biden Administration should pursue the following steps.

Recommendation 1. The NEC should name an ESWT Initiative Coordinator in conjunction with a DOC or DOL lead who will spearhead coordination between different agency workforce training activities.

With limited growth in government funding over the coming years, a key challenge will be more effectively coordinating existing programs and funds in service of training young people for demonstrated skills gaps in the marketplace. As these new programs are implemented through existing legislation, a central entity in charge of coordinating implementation, learning, and investments can best ensure that funds are directed equitably and effectively. Additionally, this initial declaration can lay the groundwork to build capacity within the federal government to conduct market analyses and consult with industries to better inform program design and grant giving across the country. The DOC and the Economic Development Administration seem best positioned to lead this effort with an existing track record through the Good Jobs Challenge and capacity to engage fully with industry to build trust that curricula and training are conducted by people that employers verify as experts. However, the DOL could also take a co-lead role due to authorities established under the Workforce Innovation and Opportunity Act (WIOA). In selecting lead agencies for ESWT, these criteria should be followed:

1. Access to emerging business intelligence regarding industry-critical skills—DOC, DOE
2. Combined international and domestic remit—DOE/DOL, DOC (ITA)
3. Remit that allows department to focus investment on demonstrated skills gaps, indicated by higher wages and churn—DOC
4. Permitted to convene advisory committees from the private sector under the Federal Advisory Committee Act—DOC

Recommendation 2. The DOC and NEC, working with partner agencies, should collaborate to identify and analyze skills gaps and establish private-sector feedback councils to consult on real-time industry needs.

As a first step, DOC should commission or conduct research to identify quantitative and qualitative skills gaps related to the energy transition in critical supply chains both domestically and in key international markets — energy efficiency in advanced manufacturing, electric vehicle production, steel, batteries, rare earth minerals, construction, infrastructure and clean energy. DOC should budget for 20 skills gap assessments for critical occupational groups (high volume of jobs and uncertainty related to required, relevant skills) in the above-mentioned sectors. Each skills gap assessment should cost roughly $100,000, bringing the total investment to $2 million over a six-to-twelve-month period.  Each skills gap assessment will determine the critical and scarce skills in a labor market for a given occupation and the degree to which existing education and training providers meet the demand for skills.

This research is central to forming effective programs to ensure investments align with industry skills needs and to lower direct costs on education providers, who often lack direct expertise in this form of analysis. Commissioning these studies can help build a robust ecosystem of labor market skills gap analysts and build capacity within the federal government to conduct these studies. By completing analysis in advance of competitive grant processes, federal grants can be better directed to training based on high-need industry skill sets to ensure participating students have market-driven employment opportunities on completion. The initial research phase would occur over a six-month timeline, including staffing and procurement. The ESWT coordinator would work with DOC, ED, and DOL to procure curricula, enrollment, and foreign labor market data. Partner agencies in this effort should also include the Departments of Education, Labor, and Energy. The research would draw upon existing research on the topic conducted by Jobs for the Future, IYF, the Project on Workforce at Harvard, and LinkedIn’s Economic Graph.

Recommendation 3. Host the Energy Security Workforce Development White House Summit to galvanize public, private, and social sector partners to address identified skills gaps.

The ESWT coordinator would present the identified quantitative and qualitative skills gaps at an action-oriented White House Summit with industry, state and local government partners, education providers, and philanthropic institutions. The Summit could serve as a youth-led gathering focused on workforce and upskilling for critical new industries and galvanize a call to action across sectors and localities. Participants will be asked to prioritize among potential choices based on research findings, available funding mechanisms, and imperatives to transform education and training systems at scale and at pace with industrial transformation. Addressing the identified skills gaps will require partnering with and securing the buy-in of both educational institutions as well as industry groups to identify what skills unlock opportunities in given labor markets, develop demand-driven training, and expanded capacity of education and training providers in order to align interests as well as curricula so that key players have the incentives and capacity to continually update curricula—creating lasting change at scale. This summit would also serve as a call to action for private sector partnerships to invest in helping reskill workers and establish buy-in from the public and civil society actors. 

Recommendation 4. Establish standards and data sharing processes for linking existing training funds and programs with industry needs by convening state and local grantees, state agencies, and federal government partners.

ESWT should lay out a common series of metrics by which the federal government will assess workforce training programs to better equip efforts to scale successful programs with comparable evidence and empower policymakers to invest in what works. We recommend using the following metrics: 

1. Successful hiring of workers into quality green jobs
2. The reduction of employer recruitment and training costs for green jobs
3. Demonstrable decreases in identified skills gaps

Metrics 2 and 3 will rely on ongoing industry consultations—as well as data from the Bureau of Labor Statistics. Because of the diffuse nature of existing skills gap analyses across federal grantees and workforce training programs, ESWT should serve as a convenor for learning between jurisdictions. Models for federal government data clearinghouses could be effective as well as direct sharing of evidence and results between education providers across a series of common metrics.

Recommendation 5. Ensure grants and investments in workforce training are tied to addressing specific identified skills gaps, not just by regional employment rates.

A key function of ESWT would be to determine feasible and impactful strategies to address skills gaps in critical supply chains, given the identified gaps, existing funding mechanisms, the buy-in of critical actors in key labor markets (both domestic and international), agency priorities, and the imperative to make transformative change at scale. The coordinator could help spur agencies to pursue flexible procurement and grant-making focused on outcomes and tied to clear skills gap criteria to ensure training demonstrably develops skills required by market needs for the energy transition and growing domestic supply chains. While the Good Jobs Challenge required skills gap analysis of grantees, advanced analyses by the ESWT Initiative could inform grant requirements to ensure federal funds are directed to high-need programs. As many of these fields are new, innovative funding mechanisms could be used to meet identified skills gaps and experiment with new training programs through tiered evidence models. Establishing criteria for successful workforce training programs could also serve as a market demand-pull signal that the federal government is willing and able to invest in certain types of training, crowding-in potential new players and private sector resources to create programs tailored for the skills industry needs.

Depending on the local context, the key players, and the nature of the strategy to bridge the skills gap for each supply chain, the coordinating department will determine what financing mechanism and issuing agency is most appropriate: compacts, grants, cooperative agreements, or contracts. For example, to develop skills related to worker safety in rare-earth mineral mines in South Africa or South America, the DOL could issue a grant under the Bureau of International Labor Affairs. To develop the data science skills critical for industrial and residential energy efficiency, the ED could issue a grants program to replicate Los Angeles Unified School District’s Common Core-aligned data science curriculum.

Recommendation 6. Congress should authorize flexible workforce training grants to disperse—based on identified industry needs—toward evidence-driven, scalable training models and funding for ESWT within the DOC to facilitate continued industry skills need assessments.

Congress should establish dedicated staff and infrastructure for ESWT to oversee workforce training investments and actively analyze industry needs to inform federal workforce investment strategies. Congress and the Administration should also explore how to incentivize public-private partnerships and requirements for energy, manufacturing, and supply chain companies to engage in curriculum development efforts or provide technical expertise to access tax credits included in the IRA or CHIPS.

Recommendation 7. ESWT could also incorporate an international perspective for nearshored supply chains critical to energy security and advanced manufacturing. 

To pilot this model, we recommend:

1. Bilateral coordination of federal workforce and training investments across agencies like State, USAID, and DFC: Mexico could serve as an ideal pilot country due to its close ties with U.S. supply chains and growth in the manufacturing sector. This coordination effort should direct USAID and other government funding toward workforce training for industries critical to domestic supply chains for energy security and green jobs.
2. Two-way learning between domestic and international workforce programs: As ESWT develops effective strategies to address the skills gap for the energy transition, the interagency initiative will identify opportunities for two-way learning. For example, as curricula for eclectic vehicle assembly is developed and piloted in Mexico with support from USAID, it could inform U.S.-based community colleges’ work with the DOL and DOE.
3. If successful, expand to additional aligned countries including Brazil, India, and South Africa and nations throughout the Americas that source energy and manufacturing inputs for the green economy: ESWT could facilitate scalable public-private partnership vehicles for partner country governments, private corporations, philanthropy, and nongovernmental organizations to collaborate and fund country-dedicated programs to train their energy and climate workforce. This step could be done in conjunction with naming a Special Envoy at the State Department to coordinate diplomatic engagement with partner countries. The Envoy and Coordinator should have expertise and experience in North and South America economic relations and diplomacy, and labor markets economics. Congress could incorporate dedicated funds for ESWT into annual appropriations at State.

Conclusion

The transition from an economy fueled by human and animal labor to fossil fuels took roughly 200 years (1760–1960) and was associated with massive labor market disruptions as society and workers reacted to a retooled economy. Avoiding similar labor market disruptions as we seek to transition off fossil fuels over decades, not centuries, will require concentrated coordinated action. The Energy Security Workforce Training Initiative will overhaul education and training systems to develop the skills needed to reduce greenhouse gas emissions in the labor markets central to long-term U.S. energy security and ensure that supply chains are resilient to shocks. Such a coordinated investment in training will lower recruitment, selection, and training costs for firms while increasing productivity and move people into the middle class with the jobs fueling the energy transition. 

By focusing federal workforce funding on addressing the green skills gap, we will be able to address the human capital challenges implicit in scaling the infrastructure, manufacturing overhaul, and supply chain reconfiguration necessary to secure a just transition, both at home and abroad. By building in critical international supply chains both for manufacturing and energy security from day one, the ESWT Initiative incorporates two-way learning as a means to knit together strategic supply chains through bilateral investments in equitable workforce initiatives. 

Frequently Asked Questions (FAQs)

What can a coordinator/interagency collaboration model offer that existing approaches do not?

Existing investments in workforce development are fragmented and are not oriented toward building the workforce needed to a net-zero carbon world, with secure energy supplies and resilient supply chains. This collaboration model ensures that workforce investments are aligned towards the net-zero carbon by 2050 aim and are targeted to the domestic and international labor markets essential to ensuring that aim, energy security, and supply chain resilience.

Similarly, to the Feed the Future Coordinator, created in 2009 because of global food insecurity and recognizing after the L’Aquila Italy G8 Summit Joint Statement on Global Food Security towards a goal of mobilizing $20 million over three years towards global agricultural and development that we needed a greater focus on food security. 

This role would ensure that programs are aligned around common goal and measuring progress towards that goal. The NEC oversees the work of the coordinator. Ultimately, the Coordinator would work with Congress and the NEC to develop authorization language. 

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How would the ESWT function with differing funding sources and agency stakeholders? Does Congress need to authorize this?

Instead of creating a new fund or program requiring congressional authorization, the ESWT strategy would align existing workforce investments across government with the Administration’s aim of net-zero greenhouse gas emissions by 2050.

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What evidence is there that workforce training and education can meet the skills gap you identify? What is the risk of failure?

Skills gaps are persistent problems around the world as education and training systems struggle to keep up with changing demands for skills. Simply investing in training systems, without addressing the underlying causes of skills gaps, will not address skills gaps. Instead, investment must be tied to the development of market-demanded skills. In IYF’s experience, this requires understanding quantitative and qualitative skills gaps, developing an industry consensus around priority skills, and driving changes to curricula, teaching practices, and student services to orient and train young people for opportunities.

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How does this approach align with current and past legislative priorities?

Our proposed unified approach to workforce development for the energy transition aligns with the priorities of the former Congress’s House Subcommittee on Higher Education and Workforce Investment, the US Strategy to Combat Climate Change through International Development; and the Congressional Action Plan for a Clean Energy Economy and a Healthy, Resilient, and Just America.

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How does this approach align with USAID’s priorities?

Systemic workforce approaches that engage the public, private, and civil sectors spur catalytic investments and bring new partners to the table in line with USAID’s commitment to drive progress, not simply development programs. However, there has been little concentrated investment to build the necessary skills for the energy transition. A coordinated investment strategy to support systemic approaches to build the workforce also aligns with USAID’s localization agenda by:

1. Building the capacity of local Technical Vocational Education and Training systems to develop the workforce that each country needs to meet its zero-emission commitments while continuing to grow its economy. 


2. Developing the capacity of local organizations, whose mission will be to facilitate workforce development efforts between the public, private and civil sectors. 


3. Incentivize industrial policy changes to include workforce considerations in the plan to decarbonize.


4. Creating increased opportunities to generate and share evidence on successful workforce strategies and programs. To keep up with this rapid transformation of the economy, it will be essential to share information, lessons learned, and effective approaches across international, multilateral, and bilateral organizations and through public private partnerships. For example, the Inter-American Development Bank has identified the Just Transition as a strategic priority and is working with LinkedIn to identify critical skills. As Abby Finkenauer, the State Department’s Special Envoy for Global Youth Issues, has long championed, bringing domestic and international lessons together will be critical to make a more inclusive decarbonized economy possible.

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How Improved Talent Practices Can Help the Department of Energy Meet the Moment

This report aims to provide a snapshot of clean energy talent at the Department of Energy and its surrounding orbit: the challenges, successes, and opportunities that the workforce is experiencing at this once-in-a-generation moment.

To compile the findings in this report, FAS worked with nonprofit and philanthropic organizations, government agencies, advocacy and workforce coalitions, and private companies over the last year. We held events, including information sessions, recruitment events, and convenings; we conducted interviews with more than 25 experts from the public and private sector; we developed recommendations for improving talent acquisition in government, and helped agencies find the right talent for their needs.

Overall, we found that DOE has made significant progress towards its talent and implementation goals, taking advantage of the current momentum to bring in new employees and roll out new programs to accelerate the clean energy transition. The agency has made smart use of flexible hiring mechanisms like the Direct Hire Authority and Intergovernmental Personnel Act (IPA) agreements, ramped up recruitment to meet current capacity needs, and worked with partners to bring in high-quality talent.

But there are also ways to build on DOE’s current approaches. We offer recommendations for expanding the use of flexible hiring mechanisms: through expanding IPA eligibility to organizations vetted by other agencies, holding trainings for program offices through the Office of the Chief Human Capital Officer, and asking Congress to increase funding for human capital resources. Another recommendation encourages DOE to review its use to date of the Clean Energy Corps’ Direct Hire Authority and identify areas for improvement. We also propose ways to build on DOE’s recruitment successes: by partnering with energy sector affinity groups and clean energy membership networks to share opportunities; and by building closer relationships with universities and colleges to engage early career talent.

Some of these findings and recommendations are pulled from previous memos and reports, but many are new recommendations based on our experiences working and interacting with partners within the ecosystem over the past year. The goal of this report is to help federal and non-federal actors in the clean energy ecosystem grow talent and prepare for the challenges in clean energy in the coming decades.

The Moment

The climate crisis is not just a looming threat–it’s already here, affecting the lives of American citizens. The federal government has taken a central role in climate mitigation and adaptation, especially with the recent passage of several pieces of legislation. The bipartisan Infrastructure Investment and Jobs Act (IIJA), the CHIPS and Science Act, and the Inflation Reduction Act (IRA) all provide levers for federal agencies to address the crisis and reduce emissions.

The Department of Energy (DOE) is leading the charge and is the target of much of the funding from the above bills. The legislation provides DOE over $97 billion dollars of funding aimed at commercializing and deploying new clean energy technologies, expanding energy efficiency in homes and businesses, and decreasing emissions in a range of industries.

These are robust and much-needed investments in federal agencies, and the effects will ripple out across the whole economy. The Energy Futures Initiative, in a recent report, estimated that IRA investments will lead to 1.46 million more jobs over the next ten years than there would have been without the bill. Moreover, these jobs will be focused in key industries, like construction, manufacturing, and electric utilities.

But those jobs won’t magically appear–and the IIJA and IRA funding won’t magically be spent. That amount of money would be overwhelming for any large organization, and initiatives and benefits will take time to manifest.

When it passed these two bills, Congress recognized that the Department of Energy–and the federal government more broadly– would need new tools to use these new resources effectively. That is why it included new funding and expanded hiring authorities to allow the agencies to quickly find and hire expert staff. 

Now it is up to DOE to find the subject matter expertise, talent, partnerships, and cross-sector knowledge sharing from the larger clean energy ecosystem it needs to execute on Congress’s incredibly ambitious goals. Perhaps the most critical factor in DOE’s success will be ensuring that the agency has the staff it needs to meet the moment and implement the bold targets established in the recent legislation.

Why Talent?

To implement policy effectively and spend taxpayer dollars efficiently, the federal government needs people. Investing in a robust talent pipeline is important for all agencies, especially given that only about 8% of federal employees are under 30, and at DOE only 4% are under 30. Building this pipeline is critical for the clean energy transition that’s already underway–not only for not the federal government, but for the entire ecosystem. In order to meet clean energy deployment estimates across the country, clean energy jobs will need to increase threefold by 2025 and almost sixfold by 2030 from 2020 jobs numbers. This job growth will require cross-sector investment in workforce training and education, innovation ecosystems, and research and development of new technologies. Private firms, venture capital, and the civil sector can all play a role, but as the country’s largest employer, the government will need to lead the way.

To meet its ambitious policy goals, government agencies need to move beyond stale hiring playbooks and think creatively. Strategies like flexible hiring mechanisms can help the Department of Energy–and all federal agencies–meet urgent needs and begin to build a longer-term talent pipeline. Workforce development, recruitment, and hiring can take years to do right – but mechanisms like tour-of-service models (i.e. temporary or termed positions), direct hire authorities, and excepted service hiring allow agencies to retain talent quickly, overcome administrative bottlenecks, and access individuals with technical expertise who may not otherwise consider working in the public sector. See the Appendix for more information on specific hiring authorities.

This paper outlines insights, strategies, and opportunities for DOE’s talent needs based on the Federation of American Scientists’ (FAS) one-year pilot partnership with the department. Non-federal actors in the clean energy ecosystem can also benefit from this report–by understanding the different avenues into the federal government, civil society and private organizations can work more effectively with DOE to shepherd in the clean energy revolution. 

Broadly, we hope that our experience working with DOE can serve as a case study for other federal agencies when considering the challenges and opportunities around talent recruitment, onboarding, and retention.

Where does DOE need talent? 

While the IRA and IIJA funded dozens of programs across DOE, there are several offices that received larger amounts of funding and have critical talent needs currently. 

A Pilot Partnership: FAS and DOE Talent Efforts

In January 2022, FAS established a partnership with DOE to support the implementation of a broad range of ambitious priorities to stimulate a clean energy transition. Through a partnership with DOE’s Office of Under Secretary for Science and Innovation (S4), our team discovered unmet talent needs and worked with S4 to develop strategies to address hiring challenges posed by DOE’s rapid growth through the IIJA. 

This included expanding FAS’s Impact Fellowship program to DOE. This program supports fellows who bring scientific and technical expertise to bear in the public domain, including within government. To date, through IPA (Intergovernmental Personnel Act) agreements, FAS has placed five fellows in high-impact positions in DOE, with another cohort of 5 fellows in the pipeline.

FAS Impact Fellows placed at DOE have proven that this mechanism can have a positive impact on government operations. Current Fellows work in a number of DOE offices, using their expertise to forward work on emerging clean energy technologies, facilitate the transition of energy communities from fossil fuels to clean energy, and ensure that DOE’s work is communicated strategically and widely, among other projects. In a short time, these fellows have had a large impact–they are bringing expertise from outside government to bear in their roles at the agency. 

In addition to placing fellows, FAS has worked to evangelize DOE’s Clean Energy Corps by actively recruiting, holding events, and advertising for specific roles within DOE. To more broadly support hiring and workforce development at the agency, we piloted a series of technical assistance projects in coordination with DOE, including hiring webinars and cross-sector roundtables with leaders in the agency and the larger clean energy ecosystem. 

From this work, FAS has learned more about the challenges and opportunities of talent acquisition–from flexible hiring mechanisms to recruitment–and has developed several recommendations for both Congress and DOE to strengthen the federal clean energy workforce.

Flexible Hiring Mechanisms

One key lesson from the past year of work is the importance of flexible hiring mechanisms broadly. This includes special authorities like the Direct Hire Authority, but also includes tour-of-service models of employment. A ‘tour-of-service’ position can take many forms, but generally is a termed or temporary position, often full-time and focused on a specific project or set of projects. In times of urgency, like the onset of the COVID-19 pandemic or following the passage of large pieces of new legislation, hiring managers may need high numbers of staff in a short amount of time to implement policy–a challenge often heightened by stringent federal hiring guidelines. 

Traditional federal hiring is frustrating for both sides. For applicants, filling out applications is complicated and jargony and the wait times are long and unpredictable. For offices, resources are scarce, there are seemingly endless legal and administrative hoops to jump through, and the wait times are still long and unpredictable. In general, tour-of-service hiring mechanisms offer a way to hire key staff for specific needs more quickly, while offering many other unique benefits, including, but not limited to, cross-sector knowledge sharing, professional development, recruitment tools, and relationship-building.

These mechanisms can also expand the potential talent pool for a particular position–highly trained technical professionals can prove difficult to recruit on a full-time basis, but temporary positions may be more attractive to them. IPA agreements, for example, can last for 1-2 years and take less time to execute than hiring permanent employees or contractors. More generally, all types of flexible hiring authorities can give agencies quicker ways of hiring highly qualified staff in sometimes niche fields. Flexible hiring mechanisms can also reduce the barrier to entry for professionals not as familiar with federal hiring processes–broadening offices’ reach and increasing the diversity of applicants.

FAS’s work with DOE has demonstrated these benefits. With FAS and other organizations, DOE has successfully used IPAs to staff high-impact positions. More recommendations on the use of IPAs specifically can be found in a later section. Through its Impact Fellowship, FAS has yielded successful case studies of how cross-sector talent can support impactful policy implementation in the department.

DOE should expand awareness and use of flexible hiring mechanisms.

DOE should work to expand the awareness and use of flexible hiring mechanisms in order to bring in more highly skilled employees with cross-sector knowledge and experience. This could be achieved in a number of ways. The Office of the Chief Human Capital Office (CHCO) should continue to educate hiring managers across DOE about potential hiring authorities available: they could offer additional trainings on different mechanisms and work with OPM to identify opportunities for new authorities. There are existing communities of practice for recruitment and other talent topics at DOE, and hiring officials can use these to discuss best practices and challenges around using hiring authorities effectively. 

DOE can also look to other agencies for ideas on innovative hiring. Agencies like the Department of Homeland Security, Department of Defense, and Department of Veterans Affairs run different forms of industry exchange programs that allow private sector experts to bring their skills and knowledge into government and vice versa. Another example is the Joint Statistical Research Program hosted by the Internal Revenue Service’s Statistics of Income Office. This program brings in tax policy experts on term appointments using the IPA mechanism, similar to the National Science Foundation’s Rotator program. Once developed, these programs can allow agencies to benefit from talent and expertise from a larger pool and access specialized skill sets while protecting against conflicts of interest.

DOE should partner with external organizations to champion tour-of-service programs.

There are other ways to expand flexible hiring mechanism use as well. Program offices and the Office of the CHCO can partner with outside organizations like FAS to champion tour-of-service programs in the wider clean energy community, in order to educate non-federal eligible parties on how they can get involved. Federal hiring processes can seem opaque to outside organizations, with additional paperwork, conflict of interest concerns, long timelines, and potential clearance hurdles. If outside organizations better understand the different ways they can partner with agencies and the benefits of doing so, agencies could increase enthusiasm for programs like tour-of-service hiring. At NSF, for example, the Rotator program is well known in the communities it operates within–both academia and government understand the benefits of participating. 

Although these mechanisms and authorities have significant medium- and long-term benefits for agencies, they require upfront administrative effort and cost. Even if staff are aware of potential tools they can use, understanding the logistics, funding mechanisms, conflict of interest regulations, and recruitment and placement of staff hired through these mechanisms often requires investment of time and money from the agency side and can overwhelm already stressed hiring managers. 

Congress should increase funding for DOE’s Office of the Chief Human Capital Officer.

In order to support DOE in using flexible hiring mechanisms more effectively, Congress should direct more funding to the agency’s Office of the Chief Human Capital Officer. In FY23, the office has not only continued to execute on mandates from the IIJA and the IRA, but has introduced new programs aimed at modernizing the office and improving on hiring. These programs and tools, including standing up talent teams to better assess competency gaps across program offices and developing HR IT platforms to more effectively make data-driven personnel decisions, are vital to the growth of the office and in turn the ability of DOE to follow through on key executive priorities. Congress should increase funding to DOE’s Human Capital office by $10M in FY24 over FY23 levels. As IRA and IIJA priorities continue to be rolled out, the Human Capital office will remain pivotal to the agency’s success. 

Congress should increase DOE’s baseline program direction funds. 

A related recommendation is for Congress to further support hiring at DOE by increasing the base budget of program direction funds across agency offices. Restrictions on this funding limits the agency’s ability to hire and the number of employees it can bring on. When offices are limited in the number of staff they can hire, they have tended to bring on more senior employees. This helps achieve the agency’s mission but limits the overall growth of the agency – without early career talent, offices are unable to train a new generation of diverse clean energy leaders. Increasing program direction budgets through the annual appropriations process will allow DOE to have more flexibility in who they hire, building a stronger workforce across the agency.

Clean Energy Corps and the Direct Hire Authority

Expanded Direct Hire Authority has been a boon for DOE, despite some implementation challenges. Congress included DHA in the IIJA, in order to help federal agencies quickly add staff to implement the legislation. In response, DOE set an initial goal of hiring over 1,000 new employees in its Clean Energy Corps, which encompasses all DOE staff who work on clean energy and climate. DOE also requested an additional authority for supporting implementation of the IRA through OPM. To date, the program has received almost 100,000 applications and has hired nearly 700 employees. We have heard positive feedback from offices across the agency about how the DHA has helped hire qualified staff more quickly than through traditional hiring. It has allowed DOE offices to take advantage of the momentum in the clean energy movement right now and made it easier for applicants to show their interest and move through the hiring process. To date, among federal agencies with IIJA/IRA direct hire authorities, DOE has been an exemplar in implementation.

The Direct Hire Authority has been successful so far in part because of its advertisement; there was public excitement about the climate impact of the IIJA and IRA, and DOE took advantage of the momentum and shared information about the Clean Energy Corps widely, including through partnerships with non-governmental entities. For example, FAS and Clean Energy for America held hiring webinars, and other organizations and individuals have continued to share the announcement. 

Congress should extend the Direct Hire Authority.

Congress should consider extending the authority past its current timeline. The agency’s direct hire authority under the IIJA expires in 2027, while its authority requested through OPM expires at the end of 2025 – and is capped at only 300 positions.  With DOE taking on more demonstration and deployment activities as well as increased community and stakeholder engagement with the passage of the IIJA and IRA, the agency needs capacity–and the Direct Hire Authority can help it get the specialized resources it needs. Extending the authority beyond 2025 and requesting that OPM increase the cap on positions is more urgent, but the authority should continue past 2027 as well, to ensure that DOE can continue to hire effectively. 

Congress should expand the breadth of DHA. 

Additionally, Congress should expand the authority to other offices across DOE. It is currently limited to certain roles and offices, but there are additional opportunities within the department to support the clean energy transition that don’t have access to DHA. This is especially important given that offices with the direct hire authority can pull employees from offices without–leaving the latter to backfill positions on a much longer timeline using conventional merit hiring practices. Expanding the authority would support the development of the agency as a whole. 

Beyond just removing the authority’s cap on roles supporting the IRA, expansions or extensions of the authority should increase the number of authorized positions to account for a baseline attrition rate. The authority limits the number of positions that can be filled – once that number of staff is hired, the authority can no longer be used for that office or agency. As with any workplace, federal agencies experience a normal amount of attrition, but the stakes are higher when direct hire employees leave the organization because of the authority’s constraints. Any authorization of the DHA in the future should consider how attrition will impact actual hires over the authorization period. 

In order to bolster support for expanding the authority, DOE can take steps to share out successes of the program. The DHA has been a huge win for federal clean energy hiring, and publicizing news about related programs, offices, funding opportunities, and employees that would not exist but for the support of the Clean Energy Corps would help make the connection between flexible hiring and government effectiveness and would generate excitement about DOE’s activities in the general public.

DOE should highlight success stories of the Clean Energy Corps.

As part of a larger external communications strategy, DOE should highlight success stories of current employees hired through the Clean Energy Corps portal. These spotlights could focus on projects, partnerships, or funding opportunities that employees contributed to and put a face to the achievements of the Clean Energy Corps thus far. Not only would this encourage future high-quality applicants and ensure continued interest in the program, but would also advertise to Congress and the general public that the authority is successful and increase support for more flexible hiring authorities and clean energy funding. 

There are also some opportunities to improve DOE’s use of the authority and make it even more effective. With so many applications, hiring managers and program offices are often overwhelmed by sheer volume – leading to long wait times for applicants. Some offices at DOE have tried to address this bottleneck by building informal processes to screen and refer candidates–using their internal system to identify qualified applicants and sharing those applications with other program offices. But there may be additional ways to reduce the backlog of applications. 

DOE should conduct a review of DHA’s use thus far.

DOE should conduct an assessment of the use of the Direct Hire Authority in relevant offices. The program has been running for over a year, and there is enough data to review and better understand strengths and areas of growth of the authority. The review could be an opportunity to highlight and build on successful strategies like the informal process above–with program offices who currently use those strategies helping to scale them up. It could also assess attrition rates and compare them to agency-wide and non-DHA attrition rates to understand opportunities to improve or share out successes around retention. Finally, the review could also act as a resource for Congress to help justify the authority’s renewal in the future. 

Use of IPA Agreements

One of the most well-known tour-of-service programs is the Intergovernmental Personnel Act. When used effectively, it can allow agencies to share cross-sector knowledge, increase their capacity, and achieve their missions more fully. As noted previously, DOE has made use of IPAs in some capacities, but barriers to expanding the program still exist. First, the DOE maintains a list of ‘IPA-certified’ organizations, including non-profits that must first certify their eligibility to participate in IPA agreements. According to OPM, if an organization has already been certified by an agency, this certification is permanent and may apply throughout the federal government. This is an effective practice that theoretically allows DOE to bring on IPAs from those organizations more quickly – without the additional administrative work necessary to research and vet each organization multiple times. 

However, when FAS engaged DOE to expand the Impact Fellowship to the agency, FAS was asked to re-certify its eligibility separately with DOE despite already having conducted IPA agreements with other agencies. As of May 2021, DOE has only approved 22 organizations for IPA eligibility. With the clean energy ecosystem booming, this leaves a large amount of talent potential going untapped. 

DOE should amend its IPA directive.

One solution to this issue would be for DOE to amend its IPA directive, which was last updated in 2000, to automatically approve IPA eligibility for organizations that have been certified by other agencies. Agencies such as NSF, USDA, GSA, and others also maintain lists of IPA-eligible organizations, providing DOE a readily available pool of potential IPA talent without certifying those organizations independently. This solution could expand the list of certified organizations and reduce DOE’s internal administrative burden. Organizations that know they will go through an initial vetting process once rather than multiple times could redouble efforts to build that partnership with DOE. 

DOE should work with outside organizations to share strategies. 

The previous recommendation on educating eligible non-federal organizations on tour-of-service mechanisms applies here as well. Organizations like FAS with a proven track record of setting up IPA agreements with agencies can share best practices, success stories, and champion the program in the broader non-profit ecosystem. However, agencies can also develop externally facing IPA resources, sharing training and ‘how-to’ guides with nonprofits and academic institutions that could be good fits for the program but aren’t aware of their eligibility or requirements to participate.

Recruitment

Recruitment is another area where we learned lessons from our work alongside DOE. FAS and Clean Energy for America held recruitment information sessions for people interested in working for DOE, spotlighting offices who needed more staff. One strategy that helped target specific skill gaps within the agency was developing ‘personas’ based on certain skill sets, like finance and manufacturing. These personas were short descriptions of a specific skill set for an industry, consisting of several highlighted experiences, skills, or certifications that are key to roles in that industry. This enabled our team to develop a more tailored recruitment event, conduct targeted outreach, and execute the event with a more invested group of attendees. 

DOE should identify specific skills gaps to target recruitment efforts.

DOE hiring managers and program offices should identify skills gaps in their offices and recruit for those gaps using personas. Personas can help managers more intentionally target outreach and recruit in certain industries by allowing them to advertise to associations, academic programs, or on job boards that include potential applicants with those skills and experiences. This practice could bolster recruitment and reduce the time to hire by attracting more qualified candidates up front. It also helps offices take a more proactive approach to hiring–a difficult ask for hiring managers, who are often overworked. 

DOE should continue to utilize remote flexibilities.

Another successful recruitment strategy highlighted in our work with DOE has been the use of remote flexible positions. DOE should continue to widely utilize remote flexibilities in job opportunities and recruitment in order to attract talent from all 50 states, not just those where DOE has a physical presence. As the desire for remote employment remains high across the public and private sector, fully utilizing the remote flexibilities can help federal employers stay competitive with the private sector and attract high-quality talent.

Another area of recruitment where DOE could capitalize further is with more partnerships with non-federal organizations. Outside organizations can leverage their networks–helping expand the talent pool, increase diversity, and support candidates through the federal hiring process, competitive or otherwise.  Networks like New York Climate Tech have been tirelessly organizing the climate tech community in New York City, and even plan to start expanding to other cities soon. These types of organizing are invigorating for climate professionals; they can energize existing advocates and evangelize to new ones. Helping connect those networks to government opportunities–whether prize competitions, job opportunities, or grants–can strengthen cross-sector relationships and the clean energy workforce overall. 

Such efforts would also support federal recruitment strategies, which are often not as visible as they could be given the sheer amount of work required for proactive outreach. Earth Partners, a climate tech venture capital firm, partnered with the Office of Clean Energy Deployment to hire for high-impact positions by leveraging its own network. 

DOE should use partner organizations to broadcast hiring needs. 

DOE Office of the Human Capital Officer, hiring managers, or program offices should consider how they can partner with other organizations to broadcast hiring needs. These can be larger clean energy associations and member organizations like Clean Energy for America, New York Climate Tech, FAS, and Climate Power, or they could be energy sector affinity groups like Women In Renewable Industries and Sustainable Energy (WRISE) and the American Association of Blacks in Energy (AABE). Coordinated social media campaigns, partnered recruitment events, or even sending out open positions in those organizations’ regular newsletters could help broaden DOE’s recruitment reach. Because of the momentum in the clean energy community, non-federal organizations have built out substantial recruitment infrastructure for potential applicants and can help publicize positions. 

DOE should build a presence at campus hiring events.

Similarly, DOE hiring managers should build and maintain a presence at higher education hiring events. There are a number of ways to bring more early career staff into government, but DOE can focus on recruiting more intentionally from universities and community colleges. The agency should cultivate relationships with university networks–especially those of Historically Black Colleges and Universities (HBCUs) and Minority Serving Institutions (MSIs)–and develop recruitment messages that appeal to younger populations. DOE could also focus on universities with strong clean energy curricula–in the form of recognized courses and programs or student associations. 

DOE should expand partnerships with external recruitment firms.

Some positions, of course, are harder to recruit for. In addition to mid-level employees, government also needs strong senior leaders–candidates for these positions don’t often come in droves to recruitment events. Some DOE offices have found success with using private recruitment firms to identify candidates from the private sector and invite them to apply for Senior Executive Service (SES) level positions in government. This practice, in addition to bringing in specific executive recruitment, also helps career private-sector applicants navigate the government hiring process. 

DOE should learn from current strategies and continue to partner with private recruitment firms to identify potential SES candidates and invite them to apply. Using recruitment firms can help simplify position description language and help guide candidates through the process. DOE currently uses this successfully for certain skill set gaps, but should seek to expand the practice for recruitment needs that are more specific. 

DOE should develop its own senior talent recruitment strategy. 

Longer term, DOE should develop its own senior talent recruitment strategy. This strategy can be developed using lessons learned from private recruitment firms or from meeting with other agencies to understand best practices in the space. SES positions require different candidate management strategies, and if DOE aims to attract more non-federal talent, developing in-house expertise is important.

DOE already has the infrastructure for strategies like this. Offices involved in IIJA implementation are building office-specific recruitment strategies. These strategies consider diversity, equity, inclusion and accessibility, as well as skill sets and high-need positions within offices. Incorporating senior talent needs into these strategies could help uncover best practices for attracting quality leaders, and expanding these recruitment strategies beyond just IIJA-oriented offices could support workforce development across the agency more broadly. 

The Path Forward

DOE has made significant progress on the road to implementation, hiring hundreds of new employees to support the clean energy transition and carry out programs from IIJA, IRA, and the CHIPS and Science Act. The agency still faces challenges, but also opportunities to grow its workforce, improve its hiring processes, and bring in even more high-quality, skilled talent into the federal government. We hope DOE and Congress will consider these recommendations as they continue to work toward a stronger clean energy ecosystem in the years to come.

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Appendix: Overview of hiring authorities

IPAs 

The Intergovernmental Personnel Act (IPA) Mobility Program that allows temporary assignment of personnel between the federal government and state/local/tribal governments, colleges/universities, FFRDCs, and approved non-profit organizations. According to a 2022 Government Accountability Office report, IPAs are a high-impact mechanism for bringing talent into the federal government quickly, yet they’re often underutilized. As detailed in the report, agencies’(including DOE) can use the IPA Mobility Program to address agency skills gaps in highly technical or complex mission areas, provide talent with flexibility and opportunities for temporary commitments, and can be administratively light touch and cost effective, when the program is implemented correctly. The report noted that agencies struggled to use the program to its full effectiveness, and that there’s an opportunity for agencies to increase their use of the program, if they can tackle the challenges. 

Direct Hire

The Direct Hire Authority allows agencies to directly hire candidates for critical needs or when a severe shortage of candidates exists. This authority circumvents competitive hiring and candidates preferences, allowing agencies to significantly reduce the time involved to hire candidates. It also presents an easier application process for candidates. DHA must be specially granted by OPM unless a governmentwide authority already exists–as it does for Information Technology Management, STEM, and Cybersecurity. For example, DOE was granted a DHA for positions related to implementing the IIJA and IRA.

Excepted Service

EJ and EK

EJ and EK hiring authorities are a form of “excepted service” unique to DOE. According to DOE, the EJ authority is used to enhance the Department’s recruitment and retention of highly qualified scientific, engineering, and professional and administrative personnel. Appointments and corresponding compensation determined  under this authority can be made without regard to the civil service laws.” The EK authority is similar, but more specific to personnel whose duties will relate to safety at defense nuclear facilities of the Department. The EK authority is time-limited by law and must be renewed.

Schedule A(r)

Also known as the “fellowship authority,”  Schedule A(r) facilitates term appointments for 1 to 4 years. This authority is especially helpful for:

• “Professional/industry exchange programs that provide for a cross-fertilization between the agency and the private sector to foster mutual understanding, an exchange of ideas, or to bring experienced practitioners to the agency.”
• “Positions established in support of fellowship and similar programs that are filled from limited applicant pools and operate under specific criteria developed by the employing agency and/or a non-federal organization.

Experts and Consultants

According to the department’s HR resources, DOE uses Experts and Consultants to, “provide professional or technical expertise that does not exist or is not readily available within DOE or to perform services that are not of a continuing nature and/or could not be performed by DOE employees in competitive or other permanent full-time positions.” Typically, Expert and Consultants can be used for intermittent, part-time, or term-limited, full-time roles.

Understanding and using these flexible hiring authorities can help DOE expand its network of talent and hire the people it needs for this current moment. More details on flexible hiring mechanisms can be found here.

Summary

The Department of Energy (DOE) should leverage its congressionally granted other transaction authority to its full statutory extent to accelerate the demonstration and deployment of innovations critical to the clean energy transition. To do so, the Secretary of Energy should encourage DOE staff to consider using other transactions to advance the agency’s core missions. DOE’s Office of Acquisition Management should provide resources to educate program and contracting staff on the opportunity that other transactions present. Doing so would unlock a less used but important tool in demonstrating and accelerating critical technology developments at scale with industry.

Challenge and Opportunity

OTs are an underleveraged tool for accelerating energy technology.

Our global and national clean energy transition requires advancing novel technology innovations across transportation, electricity generation, industrial production, carbon capture and storage, and more. If we hope to hit our net-zero emissions benchmarks by 2030 and 2050, we must do a far better job commercializing innovations, mitigating the risk of market failures, and using public dollars to crowd in private investment behind projects. 

The Biden Administration and the Department of Energy, empowered by Congress through the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL), have taken significant steps to meet these challenges. The Loan Programs Office, the Office of Clean Energy Demonstrations, the Office of Technology Transitions, and many more dedicated public servants are working hard towards the mission set forward by Congress and the administration. They are deploying a range of grants, procurement contracts, and tax credits to achieve their goals, and there are more tools at their disposal to accelerate a just, clean energy transition. The large sums of money appropriated under BIL and IRA require new ways of thinking about contracting and agreements.

Congress gives several federal agencies the authority to use flexible agreements known as other transactions (OTs). Importantly, OTs are defined by what they are not. They are not a government contract or grant, and thus not governed by the Federal Acquisitions Regulations (FAR). Historically, NASA and the DoD have been the most frequent users of other transaction authorities, including for projects like the Commercial Orbital Transportation System at NASA which developed the Falcon 9 space vehicle, and the Global Hawk program at DARPA.

In contrast, the Department of Energy has infrequently used OTs, and even when it has, the programs have achieved no notable outcomes in support of their agency mission. When the DOE has used OTs, the agency has interpreted their authority as constraining them to cost-sharing research agreements. This restricts the creativity of agency staff in executing OTs. All the law says is that an OT is not a grant or contract. By limiting itself to cost sharing research agreements, DOE is preemptively foreclosing all other kinds of novel partnerships. This is critical because some nascent climate-solution technologies may face a significant market failure or a set of misaligned incentives that a traditional research and development transaction (R&D) may not fix.

This interpretation has hampered DOE’s use of OTs, limited its ability to engage small businesses and nontraditional contractors, and prevented DOE from fully pursuing its agency mission and the administration’s climate goals.

Exploring further use of OTs would open up a range of possibilities for the agency to help address critical market failures, help U.S. firms bridge the well-documented valleys of death in technology development, and fulfill the benchmarks laid out in the DOE’s Pathways to Commercial Liftoff.
According to a GAO report from 2016, the DOE has only used OTs a handful of times since they had the authority updated in 2005, nearly two decades ago. Compare the DOE’s use of OTs to other agencies in the four-year period in the table below (the most recent for which there is open data).

TABLE 1

From GAO-16-209

Almost every other agency uses OTs at a significantly higher rate, including agencies that have smaller overall budgets. While quantity of agreements is not the only metric to rely on, the magnitude of the discrepancy is significant. 

Other agencies have made significant changes since 2014, most notably the Department of Defense. A 2020 CSIS report found that DoD use of OTs for R&D increased by 712% since FY2015, including a 75% increase in FY2019. This represents billions of dollars in awards, much of which went to consortia, including for both prototyping and production transactions. While the DOE does not have the same budget or mission as DoD, the sea change in culture among DoD officials willing to use OTs over the past few years is instructive. While DoD did receive expanded authority in the FY2015 and 2016 NDAA, this alone did not account for the massive increase. A cultural shift drove program staff to look at OTs as ways to quickly prototype and deploy solutions that could advance their missions, and support from leadership enabled staff to successfully learn how and when to use OTs.

The Department of Transportation (DOT) only uses OTs for two agencies, the Federal Aviation Administration (FAA) and the Pipeline and Hazardous Materials Safety Administration (PHIMSA). Like DOE, the FAA is not restricted in what it can and can’t use OTs for. It is authorized to “carry out the functions of the Administrator and the Administration…on such terms and conditions as the Administrator may consider appropriate.” Unlike DOE, the FAA and DOT have used their authority for several dozen transactions a year, totaling $1.45 billion in awards between 2010 and 2014.

FIGURE 1

Source

From the GAO chart (Table 1), it’s clear that ARPA-E also follows the DOE in deploying very few OTs in support of its mission. Despite being originally envisioned as a high-potential, high-impact funder for technology that is too early in the R&D process for private investors to support, the most recent data shows that ARPA-E does not use OTs flexibly to support high-potential, high-impact tech.

The same GAO report cited above stated that:

“DOE’s regulations—because they are based on DOD’s regulations—include requirements that limit DOE’s use of other transaction agreements…. Officials told us they plan to seek approval from the Office of Management and Budget to modify the agency’s other transaction regulations to better reflect DOE’s mission, consistent with its statutory authority. According to DOE officials, if the changes are approved, DOE may increase its use of other transaction agreements.” 

That report was published in 2016, but it is unclear that any changes were sought or approved, though they likely do not need to change any regulations at all to actually make use of their authority.¹ The realm of the possible is quite large, and DOE has yet to fully explore the potential benefits to its mission that OTs provide. 

DOE can use OTs without any further authority to drive progress in critical technologies.

The good news is that DOE has the ability to use OTs without further guidance from Congress or formally changing any guidelines. Recognizing their full statutory authority would open up use cases for OTs that would help the DOE make meaningful progress towards its agency mission and the administration’s climate goals. 

For example, the DOE could use OTs in the following ways:

• Using demand-side support mechanisms to reduce the “green premium” for promising technologies like hydrogen, carbon capture, sustainable aviation fuel, enhanced geothermal, and low-embodied construction materials like steel and concrete

• Coordinating the demonstration of promising technologies through consortia with private industry in support of their commercial liftoff goals

• Organizing joint demonstration projects with the DOT or other agencies with overlapping solution sets

• Rapidly and sustainably meeting critical energy infrastructure needs across rural areas

Given the exigencies of climate change and the need to rapidly decarbonize our society and economy, there are very real instances in which traditional research contracts or grants are not enough to move the needle or unlock a significant market opportunity for a technology. Forward contract acquisitions, pay for delivery contracts, or other forms of transactions that are nonstandard but critical to supporting development of technology are covered under this authority.

One promising area where it seems the DOE is currently using this approach is in supporting the hydrogen hubs initiative. Recently the DOE announced a $1 billion initiative for demand-side support mechanisms to mitigate the risk of market failures and accelerate the commercialization of clean hydrogen technologies. The Funding Opportunity Announcement (FOA) for the H2Hubs program notes that “other FOA launches or use of Other Transaction Authorities may also be used to solicit new technologies, capabilities, end-uses, or partners.” The DOE could use OTs more frequently as a tool to advance other critical commercial liftoff strategies or to maximize the impact of dollars appropriated to implementation of the BIL and IRA. Some areas that are ripe for creative uses of other transactions include:

• Critical Minerals Consortium: A critical minerals consortium of vendors, nonprofits, academics, and others all managed by a single entity could do more than just mineral processing improvement and R&D. It could take long-term offtake agreements and do forward purchasing of mineral supplies like graphite that are essential to the production of electric vehicle (EV) batteries and other products. This could function similarly to the successful forward contract acquisition for the Strategic Petroleum Reserve executed in June 2023 by DOE.

This demand-pull would complement other recent actions taken to bolster critical minerals like the clean vehicle tax credit and the Loan Program Office’s loans to mineral processing facilities. Such a consortium could come from the existing critical materials institute or be formed by separate entities.

• Geothermal Consortium: Enhanced geothermal systems technology has received neither the attention nor the investment that it should proportional to its potential benefits as a path towards decarbonizing the electric grid. At the same time, legacy oil and natural gas industries have workforces, equipment, and experiences that can easily translate to growing the geothermal energy industry. Recently, the DOE funded the first cross-industry consortium with the $165 million GEODE competition grant awarded to Project Innerspace, Geothermal Rising, and the Society of Petroleum Engineers. 

DOE could use other transactions to further support this nascent consortium and increase the demonstration and deployment of geothermal projects. The agency could also use other transactions to organize the sharing of critical subsurface data and resources through a single entity.

• Direct Air Capture (DAC): The carbon removal market faces extremely uncertain long-term demand, and unproven technological innovations may or may not present economically viable means of pulling carbon out of the atmosphere. In order to accelerate the pace of carbon removal innovation, aggregated demand structures like Frontier’s advanced market commitment have stepped up to organize pre-purchasing and offtake agreements between buyers and suppliers. The scale of the problem is such that government intervention will be necessary to capture carbon at a rate that experts believe is necessary to mitigate the worst warming pathways. 

A carbon removal purchasing agreement for the DOE’s Regional Direct Air Capture Hubs could function much the same as the proposed hydrogen hubs initiative. It also could take the shape of a consortium of DAC vendors, nonprofits, scientists, and others managed by a single entity that can set standards for purchase agreements. This would cut the negotiation time among potential parties by a significant amount, allowing for cost saving and faster decarbonization.

• Rural Energy Improvements Consortium: The IRA appropriated $1 billion for energy improvements in rural and remote areas. Because of inherent resource limitations, the DOE will not be able to fund every potential compelling project that applies to this grant program. In order to keep the program from making single one-off grants for narrowly tailored projects, it could focus on funding projects with demonstrated catalytic impact. Through OTs, the DOE could encourage promising project developers to form a Rural Energy Improvement/Developers consortium that would not only help create efficiencies in renewable energy development and novel resilient local structures but attract private investment at a scale that each individual developer would not independently attract. 

• Hydrogen Fuel Cell Lifespan Consortia: As hydrogen fuel cells start gaining traction across transportation, shipping, and industrial applications, a consortia for fuel cell R&D could help provide new insights into the degradation of fuel cells, organize uniform standards for recycling of fuel cells, and also provide unique financial incentives to hedge against early uncertainty of fuel cell lifespans. As firms invest in new fleets of fuel cell vehicles, it may help them to have an idea of what expected value they can receive for assets as they reach the end of their lifespans. A backstopped guarantee of a minimum price for assets with certain criteria could reduce uncertainty. Such a consortium could be led by the Office of Manufacturing and Energy Supply Chains (MESC) and complement existing initiatives to accelerate domestic manufacturing.

• Long Duration Energy Storage (LDES): The DOE commercial liftoff pathway highlights the need to intervene to address stakeholder and investor uncertainty by providing long-term market signals for LDES. The tools they highlight to do so are carbon pricing, greenhouse gas (GHG) reduction targets, and transmission expansion. While these provide generalizable long-term signals, DOE could leverage OTs to provide more concrete signals for the value of LDES.

DOE could organize an advance market commitment for long-duration energy storage capabilities on federal properties that meet certain storage hour and grid integration requirements. Such a commitment could include the DoD and the General Services Administration (GSA), which own and operate the large portfolio of federal properties, including bases and facilities in hard-to-reach locations that could benefit from more predictable and secure energy infrastructure. Early procurement of capability-meeting but expensive systems could help diversify the market and drive technology down the cost curve to reach the target of $650 per kW and 75% RTE for intra-day storage and $1,100 per kW 55 and 60% RTE for multiday storage.

To use OTs more frequently, the DOE needs to focus on culture and education.

As noted, the DOE does not need additional authorization or congressional legislation to use OTs more frequently. The agency received authority in its original charter in 1977, codified in 42 U.S. Code § 7256, which state:

“The Secretary is authorized to enter into and perform such contracts, leases, cooperative agreements, or other similar transactions with public agencies and private organizations and persons, and to make such payments (in lump sum or installments, and by way of advance or reimbursement) as he may deem to be necessary or appropriate to carry out functions now or hereafter vested in the Secretary.” [emphasis added]

This and other legislation gives DOE the authority to use OTs as the Secretary deems necessary. 

Later guidelines in implementation state that other officials at DOE who have been presidentially appointed and confirmed by the Senate are able to execute these transactions. The DOE’s Office of Acquisition Management, Office of General Counsel, and any other legal bodies involved should update any unnecessarily restrictive guidelines, or note that they will follow the original authority granted in the agency’s 1977 charter. 

While that would resolve any implementation questions about the ability to use OT at DOE, the agency ultimately needs strong leadership and buy-in from the Secretary in order to take full advantage. As many observers note regarding DoD’s expanding use of OTs, culture is what matters the most. The DOE should take the following actions to make sure the changing of these guidelines empowers DOE public servants to their full potential:

1. The Secretary should make clear to DOE leadership and staff that increased use of OTs is not only permissible but actively encouraged.

2. The Secretary should provide internal written guidance to DOE leadership and program-level staff on what criteria need to be met for her to sign off on an OT, if needed. These criteria should be driven by DOE mission needs, technology readiness, and other resources like the commercial liftoff reports.

3. The Office of Acquisition Management should collaboratively educate relevant program staff, not just contracting staff, on the use of OTs, including by providing cross-agency learning opportunities from peers at DARPA, NASA, DoD, DHS, and DOT.

4. DOE should provide an internal process for designing and drawing up an OT agreement for staff to get constructive feedback from multiple levels of experienced professionals.

5. DOE should issue a yearly report on how many OTs they agree to and basic details of the agreements. After four years, GAO should evaluate DOE’s use of OTs and communicate any areas for improvement. Since OTs don’t meet normal contracting disclosure requirements, some form of public disclosure would be critical for accountability.

Mitigating risk

Finally, there are many ways to address potential risks involved with executing new OTs for clean energy solutions. While there are no legal contracting risks (as OTs are not guided by the FAR), DOE staff should consider ways to most judiciously and appropriately enter into agreements. For one resource, they can leverage the eight recent reports put together by four different offices of inspector generals on agencies’ usage of other transactions to understand best practices. Other important risk limiting activities include:

1. DoD commonly uses consortiums to gather critical industry partners together around challenges in areas such as advanced manufacturing, mobility, enterprise healthcare innovations, and more.

2. Education of relevant parties and modeling of agreements after successful DARPA and NASA OTs. These resources are in many cases publicly available online and provide ready-made templates (for example, the NIH also offers a 500-page training guide with example agreements).

Conclusion

The DOE should use the full authority granted to it by Congress in executing other transactions to advance the clean energy transition and develop secure energy infrastructure in line with their agency mission. DOE does not need additional authorization or legislation from Congress in order to do so. GAO reports have highlighted the limitations of DOE’s OT use and the discrepancy in usage between agencies. Making this change would bring the DOE in line with peer agencies and push the country towards more meaningful progress on net-zero goals.

Frequently Asked Questions

What are some examples of OTs?

The following examples are pulled from a GAO report but should not be regarded as the only model for potential agreements.

Examples of Past OTs at DOE
“In 2010, ARPA-E entered into an other transaction agreement with a commercial oil and energy company to research and develop new drilling technology to access geothermal energy. Specifically, according to agency documentation, the technology being tested was designed to drill into hard rock more quickly and efficiently using a hardware system to transmit high-powered lasers over long distances via fiber optic cables and integrating the laser power with a mechanical drill bit. According to ARPA-E documents, this technology could provide access to an estimated 100,000 or more megawatts of geothermal electrical power in the United States by 2050, which would help ARPA-E meet its mission to enhance the economic and energy security of the United States through the development of energy technologies.

According to ARPA-E officials, an other transaction agreement was used due to the company’s concerns about protecting its intellectual property rights, in case the company was purchased by a different company in the future. Specifically, one type of intellectual property protection known as “march-in rights” allows federal agencies to take control of a patent when certain conditions have not been met, such as when the entity has not made efforts to commercialize the invention within an agreed upon time frame.33 Under the terms of ARPA-E’s other transaction agreement, march-in rights were modified so that if the company itself was sold, it could choose to pay the government and retain the rights to the technology developed under the agreement. Additionally, according to DOE officials, ARPA-E included a United States competitive clause in the agreement that required any invention developed under the agreement to be substantially manufactured in the United States, provided products were also sold in the United States, unless the company showed that it was not commercially feasible to do so. This agreement lasted until fiscal year 2013, and ARPA-E obligated about $9 million to it.”

Examples at DoD
“In 2011, DOD entered into a 2-year other transaction agreement with a nontraditional contractor for the development of a new military sensor system. According to the agreement documentation, this military sensor system was intended to demonstrate DOD’s ability to quickly react to emerging critical needs through rapid prototyping and deployment of sensing capabilities. By using an other transaction agreement, DOD planned to use commercial technology, development techniques, and approaches to accelerate the sensor system development process. The agreement noted that commercial products change quickly, with major technology changes occurring in less than 2 years. In contrast, according to the agreement, under the typical DOD process, military sensor systems take 3 to 8 years to complete, and may not match evolving mission needs by the time the system is complete. According to an official, DOD obligated $8 million to this agreement.”

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Are there any restrictions on the use of OTs?

Other interpretations of the statute have prevented DOE from leveraging OTs, and there seems to be confusion on what is allowed. For example, a commonly cited OTA explainer implies that DOE is statutorily limited to “RD&D projects. Cost sharing agreement required.”

But nowhere in the original statute does Congress require DOE to exclusively use cost sharing agreements, nor is this the case at other agencies where OTs are common practice.

However, the Energy Policy Act of 2005 did require the DOE to issue guidelines for the use of OTs 90 days after the passing of the law, and this is where it gets complicated. They did so, and according to a 2008 GAO report, DOE enacted guidelines which used a specific model called a technology investment agreement (TIA). These guidelines were modeled on the DoD’s then-current guidelines for OTs and TIAs, mandating cost sharing agreements “to the maximum extent practicable” between the federal government and nonfederal parties to an agreement.² An Acquisition/Financial Assistance Letter issued by senior DOE procurement officials in 2021 defines this explicitly: “Other Transaction Agreement, as used in this AL/FAL, means Technology Investment Agreement as codified at 10 C.F.R., Part 603, pursuant to DOE’s Other Transaction Authority of 42 U.S.C. § 7256.” However, the DOE’s authority as codified in 42 U.S.C. § 7256 (a) and (g) does not define OTs as TIAs, the definition is just a guideline from DOE, and could be changed.

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What are Technology Investment Agreements?

Technology Investment Agreements are used to reduce the barrier to commercial and nontraditional firms’ involvement with mission-critical research needs at DOE. They are particularly useful in that they do not require traditional government accounting systems, which can be burdensome for small or new firms to implement. But that does not mean they are the only instrument that should be used. The law says that TIAs for research projects should involve cost sharing to the “maximum extent practicable.” This does not mean that cost sharing must always occur. There could be many forms of transactions other than grants and contracts in which cost sharing is neither practicable nor feasible.

Furthermore, the DOE is empowered to use OTs for research, applied research, development, and demonstration projects. Development and demonstration projects would not fit neatly in the category of research projects covered by TIAs. So subjecting them to the same guidelines is an unduly restrictive guideline.

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What are consortiums?

Consortia are basically single entities that manage a group of members (to include private firms, academics, nonprofits, and more) aligned around a specific challenge or topic. Government can execute other transactions with the consortium manager, who then organizes the members around an agreed scope. MITRE provides a longer explainer and list of consortia.

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The Federation of American Scientists (FAS) is seeking to engage experts who can leverage their knowledge to propose projects and use-cases for FESI to consider. Priority use cases areas include but are not limited to:

• Catalyzing industry-led consortia
• Supporting coordinated procurement
• Strengthening innovation incentives
• Supporting regional innovation ecosystems
• Convening venture and impact investors
• Piloting or expanding DOE innovation programs with non-DOE funding
• Collaborating with the National Lab Foundations
• Responding quickly to crises
• Enabling communities to participate in clean energy innovation
• Read more about priority use cases here.

What We’re Looking For (and what we’re not)

Please submit your initial project designs in the form of wireframes. A wireframe is an outline of a potential project that demonstrates its fit and potential for impact. The template below reflects the components of a wireframe. The submission form can be found at the end of this page.

When filling out your wireframe, we ask you aim to avoid the following pitfalls to ensure that ideas are properly scoped, appropriately ambitious, and are in line with the agency’s goals:

• Failure to align to mission. Your proposal should be aligned with DOE’s mission, particularly catalyzing the timely, material, and efficient transformation of the nation’s energy system; securing U.S. leadership in energy technologies; and maintaining a vibrant U.S. effort in science and engineering as a cornerstone of economic prosperity
• Going alone. FESI’s central role is to cultivate long-lasting external partnerships and cross-sector activities. Your proposal should not rely on FESI as the sole funder or service provider, except in places where a first-in, crowd-in approach is needed.
• No clear diagnosis of the problem. Your project proposal should identify points of leverage where FESI can make a big impact on a complex problem.
• Duplication of efforts. While FESI can expand upon successful DOE programs that would amplify their benefits for the public , your proposal should not duplicate existing DOE efforts.

Sample Idea

Problem

Enhanced Geothermal Systems (EGS) technology has advanced significantly in recent years, but there is a lack of accurate, public information on heat flows accessible to would-be developers.*

FESI Advantage

FESI could fund the creation and maintenance of a public platform on global heat flows and related knowledge. To do so they can leverage the expertise at DOE’s Utah FORGE experiment and Geothermal Technologies Office while also convening academics, geothermal startups, legacy oil/natural gas firms, and nonprofits.

Program Objective 

A partnership between FESI, Project InnerSpace, and Global Heat Flow to update, publish, and maintain a public database of heat flow maps. 

Activities

• Kickoff convening of relevant stakeholders, identification of core problems to be overcome in creating a mapping database. Outreach to discover any critically missing information.
• Funding of a team of researchers to complete scope of work identified at kickoff.
• Popularization of research findings and resources to help new startups and projects make the most of available information.

Successful Outcome 

Lead time from exploration/discovery to project initiation reduced by X amount. Y number of new projects or investments announced.

*This idea inspired by the partnership between Project Innerspace and the International Heat Flow Commission.

The Federation of American Scientists (FAS) is seeking to engage experts who can leverage their knowledge to propose projects and use-cases for FESI to consider. Priority use cases areas include but are not limited to:

1. Catalyzing problem-focused industry-led consortia. DOE has often worked on precompetitive technologies with industrial consortia. Once they are up and running, these consortia can be very productive, but their initial implementation tends to be slow and saddled by red tape. Like the Foundation for the NIH, FESI could launch consortia quickly and assist them to transition into stable, permanent relationships with DOE.

• Biomarkers Consortium (FNIH)
• Accelerating COVID-19 Therapeutic Inventions and Vaccines  (FNIH)

2. Supporting coordinated procurement, advance market commitments, and other sources of demand to stimulate innovation uptake. Early adoption of new technologies spurs their improvement and lowers their cost. FESI could work with DOE to identify uptake opportunities, while simultaneously collaborating with non-governmental funders who might buy down the costs. FESI’s network could become a repository of design expertise and operational know-how for demand-side energy and climate innovation policy.

• H2 Global Foundation (Germany) 
• First Movers Coalition

3. Strengthening incentives to broaden the pool of innovators. The nation’s energy challenges demand an “all-of-society” response. The more diverse the communities that are advancing solutions (rural to urban, coast to coast), the better. Learning from the Foundation for Food and Agriculture Research, FESI could work with DOE to assess the pool of innovators and design programs, including prize competitions, to broaden it.

• Egg-Tech Prize (FFAR)
• Carbon Removal X Prize (X Prize)

4. Collaborating to strengthen regional innovation ecosystems. Regions are increasingly building economic development strategies around clean energy. DOE has not had a strong regional presence in the past, but now has a Congressional mandate to build one. Working with the national laboratory foundations, universities, and other partners, FESI could convene initiatives to strengthen regional ecosystems.

• Coordinating with NSF Engines and EDA Tech Hubs 
• Coordinating with and learning from state innovation ecosystems

5. Convening impact and venture investors. Early-stage investors have a granular understanding of the technological opportunities, competitive landscape, and commercialization challenges facing clean energy start-ups. FESI could bring this community together with DOE managers and national laboratory experts to identify promising areas for public-private partnerships as well as pitfalls that may impede participation of entrepreneurs in such efforts.

• Building on ARPA-E’s successful annual Summit

6. Piloting or expanding DOE innovation programs with non-DOE funding. DOE has fielded an array of creative programs that foster technology commercialization, such as Lab-Embedded Entrepreneurship Program, Cradle 2 Commerce, Lab Partnering Service, Small Business Vouchers, and Energy I-Corps. The demand for these programs is often stronger than federal funding can accommodate. FESI could enable donors to expand capacity, as the National Fish and Wildlife Foundation has done for federal conservation programs.

• National Fish and Wildlife Foundation Conservation Programs
• FNIH Type 2 Diabetes Knowledge Portal

7. Responding quickly to crises. The global energy and climate situation is volatile, and crises are inevitable. As the CDC Foundation showed in its response to covid, FESI could act quickly in such situations, laying the basis for a longer-lasting response from DOE. Key activities might include public communication about the performance of the energy system and coordination with non-federal actors, especially in philanthropy and business.  

• Rapid Outcomes from Agricultural Research (FFAR)
• Crush Covid Campaign (CDCF)

8. Enabling communities and new entrants to participate in clean energy innovation. Landmark legislation has greatly expanded DOE’s on-the-ground footprint through demonstration and deployment programs. The success of these programs depends on effective engagement with a diverse group of actors. FESI could work with partners to provide technical assistance to organizations and businesses that have not worked with DOE in the past, increasing the number and quality of such new entrants.

• FDA Patient Listening Sessions (Reagan-Udall Foundation)

Summary

As a result of human activity, greenhouse gas emissions are increasing so rapidly that climate disaster is imminent. To avoid catastrophe, all economic sectors––industry, agriculture, transport, buildings, and electricity––require immediate energy and climate policy solutions. Only with a resilient and renewable, bipartisan, clean, and reliable partner can America fully decarbonize its economy and avert the devastating effects of climate change. As America’s clean energy transformation proceeds, there is one energy technology up for the task across all these sectors––geothermal. 

Geothermal is the energy source naturally produced by the Earth. It is a proven technology with decades of utilization across the United States, including New York, Idaho, North Dakota, California, Arkansas, New Mexico, and everywhere in between.

Government agencies and academic institutions have already identified more than enough untapped Earth-powered energy in the United States alone to meet the nation’s energy needs while also achieving its emissions goals. In fact, the total amount of heat energy in the Earth’s crust is many times greater than the energy available globally from all fossil fuels. 

Despite these benefits, geothermal represented just 0.4% of total U.S. utility-scale electricity generation in 2021 and only 1% of the residential and commercial building heating and cooling market. What is holding geothermal back is a lack of policy attention at both the federal and state levels. Geothermal has been drastically underfunded and continues to be left out of energy, climate, and appropriations legislation. By acting as the primary facilitator and coordinator for geothermal technology policy and deployment, the U.S. government can significantly accelerate the clean energy transformation. 

Our Empowering the Geothermal Earthshot proposal is a multibillion dollar interagency effort to facilitate the energy revolution America needs to finally solve the climate crisis and complete its clean energy transformation. This top-down support would allow the geothermal industry to fully utilize the power of the free market, commercialize innovation into mass production, and scale technologies.

Challenge and Opportunity

Geothermal energy––clean renewable energy derived from the unlimited heat in the Earth––is a proven technology that can contribute to achieving aggressive climate goals but only if it gets much-needed policy support. Geothermal urgently requires the same legislative and executive attention, policy momentum, and funding that all other energy technologies receive. The Biden Administration as well as Republicans and Democrats in Congress need to lift up the profile of geothermal on par with other energy technologies if we are to reach net-zero by 2050 and eventually 24/7 carbon-free energy.

On day one of his administration, President Biden charged his National Climate Task Force to utilize all available government resources to develop a new target for reductions in greenhouse gas (GHG) emissions. As a result, in April 2021 the Biden Administration announced an aggressive new GHG target: a 50% reduction from 2005 levels by 2030. To meet this challenge, the administration outlined four high-priority goals:

Figure 1.

Pie chart showing Total Greenhouse Gas Emissions by Economic Sector in the U.S. in 2020. Transportation is responsible for 27%; Electricity, 25%; Industry, 24%; Commercial; Residential, 13%; Agriculture, 11%.

1. Invest in clean technology infrastructure.
2. Fuel an economic recovery that creates jobs.
3. Protect our air and water and advance environmental justice.
4. Do this all in America.

Geothermal energy’s primary benefits make it an ideal energy candidate in America’s fight against climate change. First, geothermal electricity offers clean firm, reliable, and stable baseload power. As such, it easily complements wind and solar energy, which can fluctuate and produce only intermittent power. Not only does geothermal energy offer more resilient and renewable energy, but––unlike nuclear and biomass energy and battery storage––it does so with no harmful waste by-products. Geothermal energy does not depend on extractive activities (i.e., mining) that have a history of adversely impacting the environment and Indigenous communities. The underlying energy source––the literal heat beneath our feet––is local, is 100% American, and has demonstrated gigawatt-scale operation since the 1980s, unlike every other prospective clean energy technology. Geothermal energy offers a technology that we can export as a service provider and manufacturer to the rest of the world to reduce global GHG emissions, increase U.S. energy independence, and improve the country’s economy and national defense. 

Additionally, climate change continues to change outside air temperatures and weather patterns impacting building energy consumptions (e.g., heating and cooling), which are expected to increase. Geothermal heating and cooling meets these demands by providing reliable and distributed electricity generation, winter heating, and summer cooling. Geothermal heating and cooling offer solutions to other economic sectors that produce harmful carbon and methane emissions. 

Getting to net-zero by 2050––and eventually to 24/7 carbon-free energy––is a community problem, a public sector problem that affects America’s public health, economic survival, and national security. We can get here if geothermal is provided the same opportunities that the government has afforded all other energy technologies.

Geothermal Energy: The Forgotten Energy Technology

Today, geothermal power production is at the same developmental stage that oil production was 100 years ago. Geothermal power production has been proven at gigawatt scale, but in a limited range of locations where conventional hydrothermal systems are easily accessible. Petroleum drilling in the United States began in 1859 and expanded first in places where oil was visible, easily identifiable, and quickly accessible. In the 150 years since, continuous market support from governments and societies has allowed the fossil fuel economy not just to continue but to expand through technology innovation. Fossil fuel technologies have matured to the point where engineers regularly drill seven to eight miles underground, drill in deep ocean water, and utilize efficient recovery technologies such as steam-assisted gravity drainage.

Geothermal carries the same potential to drive new technologies of energy production and enable huge increases in energy recovery and output. However, unlike the petroleum industry, geothermal energy has never received comparable and effective policy support from the federal and state governments to drive this needed technology development, innovation, and deployment. As a result, the geothermal industry has been left behind in the United States. 

Figure 2.

Pie chart of Federal Energy Subsidies between 1950 and 2010, showing a plurality of subsidies going to oil, while only a small sliver to geothermal.

Ironically, the fact that geothermal technologies have a long and successful track record has kept them out of the “new technology” focus that has been central to clean energy transition policy discussions.

Other technologies (e.g., hydro, solar, hydrocarbons, nuclear, biofuels, and wind) receive tens of billions of dollars each year to develop a path to continued, preferred, and widespread use, which generates commercialization, scalability, and profit. However, similar investment strategies have not been dedicated to geothermal energy infrastructure development. 

The United States needs critical capital investments to reach the vast amount of untapped Earth energy scientists have identified, expand the range of places where geothermal resources are possible, and lower the cost of geothermal drilling and production. Public investment will promote technologies such as heating and cooling systems that use individualized geothermal heat pumps (GHP) or district thermal systems. Significant public investment is needed in electricity generation technologies such as closed-loop, deep super hot rock, and enhanced systems (EGS). And of course, public and private investments are needed to help manufacturing and agricultural processes switch from fossil fuels to geothermal.

Investing in Our Future: Empowering the Geothermal Earthshot

Thankfully, investing in America’s energy infrastructure is a priority of our current presidential administration. As indicated in the April 2021 White House Fact Sheet and supported by Executive Order 14057 and the Department of Energy (DOE) Enhanced Geothermal Earthshot announced in September 2022, the Biden Administration realizes the need to marshal federal resources in a coordinated effort.

However, to fully realize and build upon the administration’s clean energy objectives, this proposal urges a holistic approach to empower geothermal deployment. The Enhanced Geothermal Earthshot falls short of the effort required to empower geothermal and scale a solution to draw down the climate crisis because it focuses on a single geothermal technology and involves just one federal agency. Instead, a whole-of-geothermal approach that harnesses the power of the entire federal government is necessary to create ambitious, positive, and widespread changes in America’s energy landscape and subvert the current fossil fuel status quo. The following action plan will usher in the geothermal era and ensure the United States meets its climate objectives and completes the clean energy transformation.

Plan of Action

The Biden Administration must set the targets and the agenda, propose policy and tax support, negotiate for appropriations, and issue regulatory support that allows commercialization and deployment of every possible Earth-powered technology solution. These steps will set up the market conditions for the private sector to commercialize and scale these proven technologies and new innovations. 

Creating policies and programs to support geothermal applications and technologies will accelerate the clean energy transformation and end our dependence on hydrocarbons. The U.S. government can usher in a new age of clean, renewable, and local energy through a combination of innovation, programs, and institutionalization. These are outlined in the recommendations detailed below.

Recommendation 1. Empower a Holistic Geothermal Earthshot

The Biden Administration should build upon and broaden the Enhanced Geothermal Earthshot to reduce the cost of EGS by 90% to $45 per megawatt hour by 2035. The administration should set a target for geothermal heat pumps and district thermal systems to reach 35% of U.S. energy consumption by 2035 and electricity generation to reach 10% of energy consumption by 2035. These objectives are in response to the administration’s carbon reduction goals for 2030 and 2050. To begin this initiative, President Biden––joined by the Secretaries of Energy, the Interior, Commerce, Defense, and Agriculture, as well as special climate and environment envoys and advisors and the Environmental Protection Agency (EPA) administrator, among others—should formally usher in a reimagined and holistic Geothermal Earthshot that leverages a whole-of-government approach.

Recommendation 2. Institutionalize and Coordinate Earth Energy Support

Create the Office of Earth Energy (OEE) at DOE through the president’s annual budget proposal. The OEE’s mission will be to coalesce federal and state governments, familiarize the public, and support all types of Earth-powered energy technologies. 

• Model the OEE after the DOE’s Office of Nuclear Energy (ONE) and Office of Fossil Energy and Carbon Management (OFECM)
• Inaugurate an Assistant Secretary for Earth Energy to oversee OEE who will report to the DOE’s Undersecretary for Science and Innovation
• Establish three deputy assistant secretaries (DAS) for:
  • Low temperature (i.e., direct heat/GHP-GSHP/agriculture/industry)
  • Power generation (i.e., enhanced, advanced, conventional)
  • Technology R&D (i.e., super hot rock)
• Structure OEE to have branches promoting and supporting Earth-powered systems and solutions by economic sector: industry, agriculture, transport, buildings, and electricity
• OEE annual appropriations of no less than $1.78 billion for operations, research, development, demonstration, and deployment (this funding level is on par with the other energy offices at DOE on which the OEE is modeled)
• Sharpen the focus of the existing Geothermal Technologies Office to be an EGS-specific branch of the power generation DAS within the OEE

Existing DOE offices such as ONE and OFECM offer a proven template from which to model OEE. Geothermal’s potential to address the climate crisis and become a significant part of the cooling/heating and electricity mix in the United States requires significant growth of support within the federal government. The organizational structure of the federal government is imperative to spearhead geothermal development. Raising the awareness and profile of geothermal within the government requires higher-level offices and more senior-level personnel supporting, evaluating, and studying the industry. The three DAS subject-matter designations represent the three overarching applications of geothermal technologies.

Interagency coordination should be led by a Senior Director for Earth-Powered Energy within the National Security Council (NSC). Programs and initiatives involve executive agencies and offices, including DOE, Department of Defense (DOD), Department of Agriculture, Department of Commerce, Department of the Interior (DOI), Office of Science and Technology Policy, Office of Management and Budget, NSC, Domestic Policy Council, Department of State, and EPA, among others.

Recommendation 3. Accelerate Geothermal Innovation

The following innovation accelerator concepts can help unlock technical hurdles and unleash private sector thinking to expand the reach of geothermal energy applications. The needed primary research fits into three broad categories: streamlining existing geothermal energy development and reducing risk, technology innovations to support massively scaling the potential range and total energy available from the Earth, and technical refinements to optimize every Earth energy application.

For example, work is needed to reduce technical risk and predictability in siting geothermal wells to make drilling a geothermal well as predictable and repeatable as it is for oil and gas wells today. Reduced risk and greater predictability is critical to private sector investment support. 

Commercial and residential heat pumps and district heating systems need R&D support to improve deployability in urban settings and to maximize both heating and cooling efficiency.

Enhanced geothermal systems—those that expand traditional hydrothermal power generation to less permeable locations—have received modest public sector support for several decades but need greater and more focused application of technologies that were developed for oil and gas during the fracing expansion.

Achieving massive scalability for geothermal power means developing technologies that can operate well beyond traditional hydrothermal system locations. Closed-loop and other advanced geothermal technologies promise access to energy anywhere there is heat, but all are currently at the earliest stages of their technology lifecycles and operating without major public sector research support 

All of these use cases would benefit from a concerted, government-funded research effort, shared access to innovation and best practices, and a clear path to commercialization.

(A) Propose in the president’s annual budget a geothermal bureau, program, or focus area within the Advanced Research Projects Agency-Energy (ARPA-E) dedicated to promoting all types of geothermal innovations, from low- to high-temperature cooling/heating and electricity applications. ARPA-E “advances high-potential, high-impact energy technologies that are too early for private-sector investment.” Use this program to support research into new or expanded ways to use Earth energy that are too early or speculative for private sector investment and bring them to the point of commercialization.

(B) Create a new venture capital entity to accelerate commercialization of geothermal innovations by aggressively investing in geothermal-related technologies. Model it on the existing In-Q-Tel organization that has been very successful in driving national security technology development. This would be a new venture capital funding entity focused on commercializing Earth power technology innovation from U.S. government-funded research and development initiatives (e.g., the ARPA-E projects described above) and on exploring technology solutions to problems that remain unsolved across government, industry, and society yet are critically important for dealing with climate change. 

(C) Create a public-private Geothermal Center of Excellence (GeoExcel) at a DOE national lab. A sustained and robust public-private research program is essential for innovation, and many agencies leverage private sector investment through publicly funded centers of excellence. Currently, geothermal research is conducted haphazardly and incoherently across U.S. government agencies and DOE national labs such as Idaho National Lab, Sandia National Labs, Lawrence Berkeley Lab, U.S. Geological Survey, National Renewable Energy Lab, Brookhaven National Lab, Argonne National Lab, National Energy Technology Lab, and many more. To augment research within its national lab apparatus, DOE should establish GeoExcel to develop the technology necessary to produce low-cost geothermal power, cooling/heating, and mineral recovery such as lithium, manganese, gold, and silica. GeoExcel would also conduct education outreach and workforce development. GeoExcel would be a multibillion-dollar public-private partnership competitively awarded with multiyear funding. It would interact closely with one or two DOE national labs as well as federal, state, regional, and municipal government agencies, research universities, community college, nonprofits, and the private sector.

Recommendation 4. Create Earth Energy-Specific Programs and Policies

The following programs, funding, and regulatory suggestions should be proposed in the president’s budget and funded or authorized through congressional appropriations or moving authorization legislation. Some recommendations can be achieved through updating rules and regulations.

Programmatic: DOE Demonstration Projects

The Infrastructure Investment and Jobs Act (IIJA) appropriated $20 billion for demonstration projects, including those for hydrogen, direct air capture, and large-scale carbon capture. This funding provides vital capital to incentivize, commercialize, and scale public-private partnerships using the benefits of the free market to build major infrastructure projects that will expand clean energy and advance the energy transformation. The IIJA did not direct any funding specifically for geothermal technologies; yet geothermal provides the critical clean firm and renewable baseload energy that complements intermittent technologies, can be coupled to produce green hydrogen, and empowers direct air capture infrastructure. As part of its criteria for selecting applications for demonstration project funding, Congress should clarify and/or DOE should expressly include and announce that geothermal technology will receive significant demonstration appropriations funded through the IIJA.

Funding: Risk Mitigation and Management

Commercial investment in new technology hinges on risk assessment. Removing risk from new geothermal ventures will facilitate faster commercial-scale deployment and, in turn, lower risk as more projects are completed. Propose a $2 billion risk mitigation fund within the DOE’s OEE specific for district cooling/heating and electricity drilling and exploration projects. This geothermal risk mitigation fund would provide loans to cover a portion (i.e., 60%) of the drilling cost that can be converted into grants if development of the geothermal field is unsuccessful. To minimize losses, a premium can be charged to ensure a positive return based on risk and set limits on total wells covered and monetary claims to limit losses. 

This risk mitigation and management structure has been successfully implemented for geothermal projects in Kenya, Iceland, and Costa Rica, countries in the top five of geothermal energy production per capita. To further reduce risk, the OEE should only consider projects that have already completed some exploratory drilling. Before administering commercial debt financing, the OEE should also require these projects to receive concessional risk mitigation support prior to advancing with additional drilling, district cooling/heating system construction, or power plant construction.

Funding: Rural Development

Propose a $450 million Department of Agriculture Rural Development grant program to transition agricultural and industrial cool/heat applications from burning fossil fuels to Earth energy generation. This funding can be used to decarbonize over two million cooling and heating systems used in the agricultural sector in rural America. Agricultural activities such as food processing, pulp and paper manufacturing, vegetable dehydration, dairy processing, aquaculture, greenhouses, processing sugar, and much more can transition to the clean energy economy.

Funding: Community Development

Propose a $750 million grant program to be implemented by the Department of Commerce Economic Development Administration. Grants will be made for high- and low-temperature geothermal developers to partner with municipalities, electric or energy cooperatives, community choice aggregators, and public utilities servicing America’s communities to develop geothermal resources. This funding level could generate between 375 and 500 megawatts of electricity to power between 280,000 and 375,000 households or over 3,500 megawatts of cooling/heating energy and decarbonize two to three million households and commercial businesses around the country. It is important that the clean energy transition equitably and justly empower rural American communities along with urban and suburban communities.

Funding: Tribal Development

Fund a $275 million grant program through the proposed OEE at DOE or the Bureau of Indian Affairs (BIA) at DOI to support tribal nations to develop geothermal resources on their lands, such as electricity generation, industrial and agricultural decarbonization, residential and commercial GHPs or district cooling/heating installations, and recreation. This funding could be used to generate up to 183 megawatts of electricity or 1,375 megawatts of thermal energy for use on tribal lands. Native Americans used geothermal resources for thousands of years before European settlement. Today, tribal lands are the backbone of mineral exploitation, agriculture, industry, and power production in America. These OEE or BIA funds will facilitate the clean energy transition on tribal lands using geothermal resources.

Funding: Military Construction

Propose a $2.6 billion program for distributed geothermal power and cooling/heating projects on military installations across the United States and abroad. The Air Force recently selected two military installations to deploy geothermal energy. In an increasingly contested clean energy economy, we should build secure and resilient military infrastructure using local Earth energy technologies directly on military installations. DOD can use the funding to generate a combination of up to 1,733 megawatts of electricity or 13,000 megawatts of thermal energy to offset its massive carbon footprint from 500 fixed installations, which includes 300,000 buildings. This investment will help all service branches and DOD reach the Biden Administration’s renewable energy generation goals. This funding begins the vital transformation to secure the energy infrastructure of military installations through energy independence and protect our national security interests at home and abroad. Energy and mineral security are paramount for our national security. 

Funding: Smithsonian Institution

Geothermal energy is a story of the forgotten energy technology. Propose $25 million for the Smithsonian Institution to memorialize and narrate the history and future of geothermal energy in the United States. Museums familiarize and educate policymakers and the public about the past, present, and future of America. Permanent exhibitions in museums along the National Mall in Washington, DC, will help promote the potential of geothermal resources to policymakers as is already done with other energy technologies featured by the Smithsonian Institution.

Funding: Workforce Development and Community Colleges

The future of the clean energy transformation rests in the education of Americans and a smooth workforce transition of oil and gas professionals into the clean energy economy. Community colleges play a vital role in this transition. Allocate $300 million for the Department of Education to award grants to technical and vocational programs to develop and build geothermal-specific skill sets and needs into curriculums. These geothermal programs will build upon and expand existing programs such as drill rig crew member training programs like that at Houston Community College in Texas or cooling/heating apprenticeship programs like those at Mercer Community College in New Jersey or Foothills College in California. The objective of these grants is to amplify the capabilities of geothermal technologies and deepen the knowledge of professionals who install, sell, market, or manufacture products that could transition to geothermal technologies and away from burning fossil fuels.

Funding: Convert Abandoned Oil and Gas Wells

Expand the authorities of the Leaking Underground Storage Tank (LUST) Trust Fund within the EPA to include the conversion of existing and abandoned oil and gas fields into geothermal wells. The LUST Trust Fund is financed by a 0.1 cent tax on each gallon of motor fuel sold nationwide. Oil and gas wells can be retrofitted or reworked to provide geothermal cooling/heating for low-to-no-carbon direct use opportunities or generate power. Due to the years of development at these sites, the reservoir is well understood, thereby lowering risks and cost of exploration. Alternatively, this program could be a direct grant program funded through the proposed OEE within DOE or through EPA.

Regulatory: Geothermal Permitting Application Processing

Applications to conduct geophysical exploration are currently reviewed by the district office within the Bureau of Land Management (BLM) at DOI that has geographic jurisdiction over the specific geothermal project. Yet many district offices are unfamiliar with the technical aspects of geothermal development, causing significant delays in the review process. Fund $15 million for a national office with a dedicated geothermal team to develop training materials and standard operating procedures and to provide technical support to district offices to ensure timely review of geothermal power and cooling/heating projects on federal lands. Programs that cross-train staff will also improve the ability to coordinate between different agencies and offices.

Regulatory: Categorical Exclusions for Geothermal Projects

Several activities involved in geothermal resource development have no significant environmental effects yet lack an existing categorical exclusion under the National Environmental Policy Act. BLM’s regulations include only one categorical exclusion for geophysical exploration when no temporary or new road construction is required (43 CFR 4 3250); however, it does not cover resource confirmation activities. As a consequence, federal agencies take several months to approve what could be done in a matter of days via a categorical exclusion. Congress has recognized the need to improve the permitting process for geothermal production and introduced several bills to authorize categorical exclusions (i.e., S. 2949, S. 2824, and H.R. 5350).

Tax Support: Cooling and Heating

Propose a 40% tax incentive for residential and commercial building installation of geothermal heat pumps and extend the lifespan of these incentives through 2050, the date set to reach net zero emissions economy-wide. Additionally, the Biden Administration should publicly clarify or amend Presidential Determination No. 2022-18 of Section 303 of the Defense Production Act to include geothermal heat pumps.

Tax Support: Power

Geothermal electricity generation has traditionally been capital-intensive, and investment decisions depend in part on the predictability of tax incentives. This trend is best illustrated by the 1978 passage of the Public Utility Regulatory Policies Act (PURPA). This legislation’s tax consequences created more favorable conditions and a more robust market for renewable-energy suppliers. As a result, PURPA allowed the United States to rapidly increase its geothermal capacity throughout the 1980s.

Rapid deployment and growth after the passage of PURPA illustrates the impact of public policy on geothermal innovation and investment. However, renewable energy tax incentives provided in the Inflation Reduction Act of 2022 had intermittent energy and battery storage in mind when drafted. These tax incentives do not adequately support geothermal power development due to sunset clauses. The president’s budget as well as congressional appropriators and authorizers should extend the availability of the 30% Investment Tax Credit (ITC) and 2.6 cents per kWh for the Production Tax Credit (PTC) using a market approach akin to that proposed in the bipartisan Energy Sector Innovation Credit (ESIC) Act authored by Senators Whitehouse (D-RI), Crapo (R-ID), Barrasso (R-WY), Bennet (D-CO), and Hickenlooper (D-CO) as well as Representatives Reed (R-NY) and Panetta (D-CA). 

Figure 3.

Chart showing eletricity generation capacity from geothermal development in the U.S. from 1970 to 2020. In that time, geothermal generation capacity has grown from 0 megawatts to nearly 4,000 megawatts.

The ITC and PTC are written with intermittent energy technologies in mind. Geothermal requires a tax incentive structure that does not sunset after two or 10 years but rather automatically scales down credits as geothermal technologies’ market penetration ramps up. The ESIC scale down should begin when geothermal reaches 10% market penetration instead of 2%. This empowers the free market to play a major role in commercialization and scaling geothermal technologies and provides much-needed predictability and planning for the geothermal industry. It also ensures taxpayer dollars do not subsidize market-mature technologies as they currently do for all other energy technologies such as hydrocarbon, solar, wind, and nuclear projects.

Conclusion 

We can find geothermal energy just below our feet, literally everywhere. It provides 24/7 carbon-free power, cooling, and heating that is safe, resilient, local, and American. A public-private partnership that leverages public-sector investment with private-sector know-how can make geothermal technology a viable replacement for hydrocarbons and a powerful solution to reducing greenhouse gas emissions. We must empower and broaden the Enhanced Geothermal Earthshot through the programs and recommendations listed in this plan of action. In doing so, a reimagined and holistic Geothermal Earthshot can leverage the position and influence of the federal government through a whole-of-government approach, allowing the free market to seize on this momentum to scale and commercialize geothermal energy solutions. This will expand the rapidly emerging technologies that make widespread Earth-energy harnessing possible. As the need for firm, scalable, renewable, stable baseload energy only becomes more urgent, these geothermal innovations make the possibility of continuous, reliable, global clean energy a reality.

Frequently Asked Questions

Many clean energy options require critical minerals that are difficult to obtain or come with security concerns. Does geothermal energy carry this same drawback?

No. Unlike some other clean energy technologies that require vital minerals extracted or refined in authoritarian countries including Russia and China, Earth energy technologies and innovations reduce the clean energy economy’s reliance on these foreign-extracted minerals. Resilience from domestic geothermal energy secures our supply chains, conserves from destruction vital forests and habitats from Brazil to the Democratic Republic of the Congo, and generates high-paid and sought-after union jobs here in the United States.

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In the switch to geothermal energy, how do we ensure that the American workforce isn’t left behind?

The clean energy transformation brings with it a workforce transition. Geothermal technologies offer displaced fossil fuel workers employment opportunities that respect their professional experiences, maintain their community heritage, and preserve their place-based sense of self. Mechanical engineers, drill rig apprentices, drill supervisors, geophysicists, and project managers from the oil, gas, and coal industries all possess skills and training transferable to geothermal jobs—typically, six-figure salaried jobs. 

Workers are tired of hearing “trust us” refrains from politicians, the private sector, and government agencies that claim a new job will be found for them. These jobs need to be ready before an individual’s job disappears and not rely on potential tourism or the prospect of relocation to another community.

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Do rural communities stand to benefit from geothermal energy production?

Geothermal provides solutions to the oil and gas workforce as it transitions to a clean energy economy and protects the integrity and honor of rural American communities once prominent in the fossil fuel economy such as Eddington in Maine, Page in Arizona, Colstrip in Montana, River Rouge in Michigan, St. James in Louisiana, and Winfield in West Virginia. All of these communities have had environmental and public health issues due to hydrocarbons or are experiencing major loss of employment due to closing hydrocarbon-burning power plants.

Rural America is poised to win big in the ongoing clean energy transformation once policymakers harness the vast geothermal potential everywhere under our feet.

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Why is addressing residential and commercial cooling needs such a concern, and how can geothermal energy help?

Recent heat waves around the world, with record temperatures that threaten food production and even human survival, highlight an important fact: with global warming comes an increasing need for sustainable cooling strategies. 

 

Traditional air-conditioning removes dangerous heat from buildings and provides life-saving shelter and comfort. Unfortunately, air-conditioning systems worsen two other problems.

 

First, heat is not so much removed or eliminated as it is moved from one location to another. When a building interior is cooled, that thermal energy is transferred to the exterior surroundings. In dense urban areas, this effect increases local temperatures, exacerbating the heat wave in places that are already heat islands as a result of urbanization. 

 

Second, air-conditioning requires significant electricity, placing additional stress on electric grids and generation systems that are already struggling to decrease fossil fuel dependence and cope with the electrification needed to reduce greenhouse gas emissions. 

 

Thankfully, this increased demand can be partially offset by daytime solar generation. But nighttime cooling has become a necessity in many places. Geothermal technology has a major role to play here too. Geothermal (i.e., ground source) heat pumps are far more efficient than their air-source counterparts, especially at high and low temperatures. 

A ground-source cooling system can reduce building interior temperatures without heating the surrounding air space. But the capital costs for these systems are high. Public-sector support is needed via tax credits and the Defense Production Act to incentivize adoption now plus simultaneous investments in technology to streamline implementation and decrease cost over time.

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What can geothermal energy provide that solar and wind energy cannot?

Intermittent energy technologies have proven they can scale and compete with fossil fuels. But wind and solar, along with battery storage, only get us part of the way through the clean energy transformation. These technologies have made enormous strides in cost-effectively replacing fossil fuels for power generation, but their intermittent nature means they cannot get us “the last mile” to total electrification. They also cannot provide scalable and distributed cooling/heating benefits to decarbonize the built environment or agriculture processes that produce harmful emissions by burning fossil fuels.

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How much power and heat can geothermal produce?

A report published by a consortium of scientists and led by the Massachusetts Institute of Technology estimate conventional geothermal could provide 100,000 megawatts of electricity in the United States––enough energy to power 16 million U.S. households––while the Department of Energy estimates geothermal heating and cooling could reach 28 million U.S. households through the use of geothermal heat pumps. These are conservative estimates using proven technologies. Innovative technologies will exponentially grow these estimates with the right and much needed policy support.

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What are the agriculture, industry, and manufacturing applications of geothermal?

Because geothermal energy is a reliable, carbon-free, and renewable source of power, it has wide-ranging applications that meet America’s key agricultural, manufacturing, and commercial needs, including aquaculture farming; dairy production; processing pulp and paper; mineral recovery for use in battery, wind turbine, and solar panel manufacturing; vegetable processing and drying; and zero-carbon electricity generation, to name a few. Find out more uses of geothermal on page 22 in the DOE’s GeoVision report.

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The news on the earth’s climate can feel unrelentingly depressing. And increasingly often, headlines and reports focus, correctly, on tipping points.  The IPCC first introduced the idea of climate tipping points decades ago; the concept is that once certain climate thresholds are reached, it could force life on earth to contend with long-term, irreversible changes. 

From the collapse of the Greenland ice sheet to the Labrador Seas Convection Collapse to the dieback of the Amazon Rainforest, these tipping points will send earth systems into a catastrophic tailspin. They are forecasted to unleash progressively as we approach the warming thresholds of 1.5°C.

But tipping points don’t have to be negative. What if, instead of envisioning every tipping point as the edge of a cliff overlooking an ecological abyss, we can start to think about positive climate tipping points, leading communities, countries, and yes, the globe to a more sustainable, cleaner and livable future?

This is not a utopian pipedream – a growing body of research suggests that positive tipping points, such as thresholds in electric vehicle adoption, or changes in food markets and consumption habits, could just as rapidly accelerate transitions to a more sustainable way of life. 

In fact, this week, experts are convening at the University of Exeter in the United Kingdom, for the first ever Global Tipping Points Conference. This event will bring together a growing alliance of partners working together on tipping points and seeking to co-develop new approaches for triggering positive tipping points for a socially just transformation.

Thus far, the idea of positive climate tipping points remains largely academic – and researchers are still working on how to identify enabling conditions for these positive tipping points before they occur.  But the goal of operationalizing positive tipping points is well within reach, and some of our counterparts in the UK and Europe have already begun applying this concept in thinking about policy intervention.

What does this mean for the United States? Given the window of opportunity provided by the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA), we have an opportunity to drive real transformative change. Positive tipping points might  jumpstart recovery and accelerate our return on investment. For example, what if we could map the penetration and distribution of electric vehicle (EV) charging infrastructure required to cause electric vehicle use to take off — and then target infrastructure subsidies to optimize that result? Or if in planning for implementation of the Federal Sustainability Plan, the government could sequence the transition of its operations, toward 100% zero-emission vehicle acquisitions for example, to achieve results faster and more economically by capitalizing on positive tipping points? 

The Federation of American Scientists and our collaborators at Metaculus, a forecasting community and platform dedicated to generating accurate predictions about future real-world events, will be watching this week as the Global Tipping Points Conference kicks off across the Atlantic. Our hope is to harness this energy to inspire policymakers back home, to make the most of this moment to drive toward a sustainable future.

“It is a capital mistake,” Sherlock Holmes once observed, “to theorize before one has data.” In the Inflation Reduction Act, fortunately, Congress avoided making that capital mistake a Capitol one.

Tax credits and other incentives for clean energy, clean manufacturing, and clean transportation dominate the IRA’s environmental spending. But the bill also makes key investments in environmental data. This is important because data directly informs how efficiently dollars are spent. (You could have avoided wasting money on that extra jug of olive oil if you’d just had better data at hand on the contents of your pantry.)

The IRA’s environmental-data investments can be broken down into three categories: investments in specific datasets, investments in specific data infrastructure, and general support for data-related activities. Let’s take a closer look at each of these and why they matter.

Investments in specific datasets

The IRA appropriates $850 million (over six years) for the Environmental Protection Agency (EPA) to create incentives for methane mitigation and monitoring. The IRA directs EPA to use some of the funds to “prepare inventories, gather empirical data, and track emissions” related to the incentive program. This information will allow EPA (and third parties) to evaluate the program’s success, which could be very powerful indeed. Because methane is such a potent and short-lived greenhouse gas (with a 20-year global warming potential that is more than 70 times greater than that of carbon dioxide), scientists agree that cutting methane emissions quickly is one of the best opportunities for reducing near-term global warming. Understanding whether and which incentives spur significant methane mitigation would therefore help policymakers decide if and where to double down on mitigation incentives moving forward.

The IRA appropriates $1.3 billion (over nine years) for the U.S. Department of Agriculture’s Natural Resources Conservation Service (NRCS) to provide conservation technical assistance to farmers and ranchers—and to quantify the climate benefits. NRCS was established in 1935 to help farmers and ranchers conserve land, soil, water, and other key agricultural resources. The IRA boosts NRCS’s funding by an additional $1 billion over nine years. But it also kicks in an additional $300 million for NRCS to collect and use field-based data to quantify how much NRCS-based efforts sequester carbon and slash greenhouse-gas emissions. Insights could boost national support for practices like regenerative agriculture, incorporation of ecosystem services into agricultural cost-benefit analyses, and good soil stewardship.

The IRA appropriates $42.5 million (over six years) for the Department of Housing and Urban Development (HUD) to conduct energy and water benchmarking studies. Utility benchmarking helps property managers understand how efficient a given building is relative to other, similar buildings. Benchmarking results guide investments into upgrades. For instance, a property manager with $100,000 to spend may wisely decide to spend that money on “low-hanging fruit” fixes (such as replacing old lightbulbs, or installing weatherstripping around doors and windows) at their least-efficient properties instead of investing in upgrades at more-efficient properties that will yield only marginal portfolio improvements. The IRA funds collection of data to expand utility benchmarking across HUD-supported housing.

The IRA appropriates $32.5 million (over four years) to the White House Council on Environmental Quality (CEQ) to collect data on which communities are disproportionately harmed by negative environmental impacts, and to develop related decision-support tools. This component of the IRA directly supports the Biden administration’s Justice40 Initiative. Justice40 establishes a national goal of ensuring that so-called “environmental justice communities” realize at least 40% of the benefits of certain federal investments. But as an executive-led initiative, Justice40 can only direct existing federal funds—it can’t bring in additional money. While advocates have argued that the IRA does not go far enough in bolstering environmental justice, designating new funding for the White House to realize Justice40 objectives is undoubtedly a step in the right direction.

The IRA appropriates $25.5 million for the U.S. Geological Survey to “produce, collect, disseminate, and use 3D elevation data.” There’s no other way to say it: 3D elevation data are cool. These data, collected by aircraft-mounted sensors, can be stitched together to produce models of our world underneath surface features like trees and buildings. These models support everything from landslide prediction (see box) to flood-risk assessment. IRA funds USGS in continuing to fill gaps in the 3D elevation data available for the United States. Example of a model constructed using 3D elevation data. Clouds of data points (left) can be stitched into 3D elevation models (right) that, for instance, reveal past landslides and steep slopes at risk of failure. These features could be impossible to identify through aerial images that also capture surface features. (Source: USGS.)

Example of a model constructed using 3D elevation data

Clouds of data points (left) can be stitched into 3D elevation models (right) that, for instance, reveal past landslides and steep slopes at risk of failure. These features could be impossible to identify through aerial images that also capture surface features. (Source: USGS).

The IRA appropriates $5 million (over four years) for EPA to collect and analyze lifecycle fuels data. The diversifying U.S. energy system is triggering heated debates over the pros and cons of different fuels. Hydrogen-powered cars produce zero emissions at the tailpipe, yes. But given the carbon and energy footprints of generating fuel-grade hydrogen on the front end, are hydrogen cars really cleaner than their gas/electric hybrid counterparts? Biofuels are all renewable by definition, but certainly not all created equal. The IRA enables the EPA to empirically contribute to these debates.

Investments in specific data infrastructure

The IRA appropriates $190 million (over four years) for the National Oceanic and Atmospheric Administration (NOAA) to invest in high-performance computing and data management. This funding responds to concerns raised by NOAA’s Science Advisory Board that NOAA lacks the technical capacity to continue to advance U.S. weather research. The Board argued that this need is especially acute with regard to understanding and predicting high-impact weather amid rapidly changing climate, population, and development trends.

The IRA appropriates $18 million (over nine years) for EPA to update its Integrated Compliance Information System (ICIS). ICIS is EPA’s principal compliance and enforcement data system, including for regulatory pillars such as the Clean Air Act and Clean Water Act. While an outdated data-management system is hardly the primary reason why violations of U.S. environmental laws are rampant (a near 30% erosion of funding for EPA’s compliance office over the past decade is a bigger problem), it certainly doesn’t help. The IRA will enhance EPA’s efforts to operationalize an existing plan for modernizing the ICIS.

The IRA directs the Secretary of Energy to “develop and publish guidelines for States relating to residential electric and natural gas energy data sharing.” While not an investment per se, this brief provision nevertheless merits mention. The IRA channels funds through the Department of Energy (DOE) to state energy offices for new rebate programs that reward homeowners making energy-efficiency house retrofits. The IRA directs the Secretary of Energy to establish guidelines for sharing data related to these programs. Proactively developing such guidelines will be useful both for facilitating productive data exchange (e.g., among those trying to understand how widespread efficiency upgrades affect energy demand) as well as for forestalling adverse effects (e.g., cyberattacks from bad actors exploiting grid vulnerabilities). 

General support for data-related activities

In addition to the specific investments outlined above, the IRA appropriates (over the next nine years) $150 million, $115 million, $100 million, and $40 million, respectively, to the Department of the Interior, the Department of Energy, the Federal Energy Regulatory Commission, and the Environmental Protection Agency for activities including “the development of environmental data or information systems.”

This broad language gives agencies latitude to allocate resources as needs arise. It also underscores the fact that multiple agencies have pressing environmental-data and -technology needs, many of which overlap. The federal government should therefore consider creating a centralized entity—a Digital Service for the Planet—“with the expertise and mission to coordinate environmental data and technology across agencies.”

The hundreds of millions of dollars that the IRA invests in environmental-data collection and analysis will serve as critical scaffolding to efficiently guide federal spending on environmental initiatives in the coming years—spending that is poised to massively increase in years to come due to the IRA as well as other key recent and pending legislative packages (including the Infrastructure Investment and Jobs Act, the CHIPS and Science Act if authorized funds are appropriated, and the Recovering America’s Wildlife Act that has a strong chance of passing this Congress). The foundation for data-driven change has been laid. The game is officially afoot.

This memo is part of the Day One Project Early Career Science Policy Accelerator, a joint initiative between the Federation of American Scientists & the National Science Policy Network.

Summary

Decarbonizing our energy system is a major priority for slowing and eventually reversing climate change. Federal policies supporting industrial-scale solutions for carbon capture, utilization, and sequestration (CCUS) have significantly decreased costs for large-scale technologies, yet these costs are still high enough to create considerable investment risks. Multiple companies and laboratories have developed smaller-scale, modular technologies to decrease the risk and cost of point-source carbon capture and storage (CCS). Additional federal support is needed to help these flexible, broadly implementable technologies meet the scope of necessary decarbonization in the highly complex industrial sector. Accordingly, the Department of Energy (DOE) should launch an innovation initiative comprising the following three pillars:

1. Launch a vocational CCS training program to grow the pool of workers equipped with the skills to install, operate, and maintain CCS infrastructure.
2. Develop an accelerator to develop and commercialize modular CCS for the industrial sector.
3. Create a private-facing CCS Innovation Connector (CIC) to increase stability and investment. 

These activities will target underfunded areas and complement existing DOE policies for CCS technologies.

Challenge and Opportunity

Carbon dioxide (CO₂) is the largest driver of human-induced climate change. Tackling the climate crisis requires the United States to significantly decarbonize; however, CCS and CCUS are still too costly. CCUS costs must drop to $100 per ton of CO₂ captured to incentivize industry uptake. U.S. policymakers have paved the way for CCUS by funding breakthrough research, increasing demand for captured CO₂through market-shaping, improving technologies for point-source CCS, and building large-scale plants for direct-air capture (DAC). DAC has great promise for remediating CO₂ in the atmosphere despite its higher cost (up to $600/ton of CO₂ sequestered), so the Biden Administration and DOE have recently focused on DAC via policies such as the Carbon Negative Shot (CNS) and the 2021 Infrastructure Investment and Jobs Act (IIJA). By comparison, point-source CCS has been described as an “orphan technology” due to a recent lack of innovation.

Part of the problem is that few long-term mechanisms exist to make CCS economical. Industrial CO₂ demand is rising, but without a set carbon price, emissions standard, or national carbon market, the cost of carbon capture technology outweighs demand. The Biden Administration is increasing demand for captured carbon through government purchasing and market-shaping, but this process is slow and does not address the root problems of high technology and infrastructure costs. Therefore, targeting the issue from the innovation side holds the most promise for improving industry uptake. DOE grants for technology research and demonstration are common, while public opinion and the 45Q tax credit have led to increased funding for CCS from companies like ExxonMobil. These efforts have allowed large-scale projects like the $1 billion Petra Nova plant to be developed; however, concerns about carbon capture pipelines, the high-cost, high-risk technology, and years needed for permitting mean that large-scale projects are few and far between. Right now, there are only 26 operating CCUS plants globally. Therefore, a solution is to pursue smaller-scale technologies to fill this gap and provide lower-cost and smaller-scale — but much more widespread — CCS installations. 

Modular CCS technologies, like those created by the startups Carbon Clean and Carbon Capture, have shown promise for industrial plants. Carbon Clean has serviced 44 facilities that have collectively captured over 1.4 million metric tons of carbon. Mitsubishi is also trialing smaller CCS plants based on successful larger facilities like Orca or Petra Nova. Increasing federal support for modular innovation with lower risks and installation costs could attract additional entrants to the CCS market. Most research focuses on breakthrough innovation to significantly decrease carbon capture costs. However, there are many existing CCS technologies — like amine-based solvents or porous membranes — that can be improved and specialized to cut costs as well. In particular, modular CCS systems could effectively target the U.S. industrial sector, given that industrial subsectors such as steel or plastics manufacturing receive less pressure and have fewer decarbonization options than oil and gas enterprises. The industrial sector accounts for 30% of U.S. greenhouse gas emissions through a variety of small point sources, which makes it a prime area for smaller-scale CCS technologies.

Plan of Action

DOE should launch an initiative designed to dramatically advance technological options for and use of small-scale, modular CCS in the United States. The program would comprise three major pillars, detailed in Table 1.

Table 1.

Three complementary efforts to increase industrial uptake of CCS technologies.

Pillar	Purpose	Champion	Cost	Funding	Time Frame
Vocational Training	Increase CCS workforce	DOE OCED	$5 million	IIJA	2-4 years
Modular CSS Innovation Program	Develop modular CCS technology for industry subsectors	DOE OCED or FECM	$10 million	IIJA, DOE grants	1 year
CCS Innovator Connector	Encourage private CCS investment	DOE OCED	$750,000/year	IIJA	2 years

DOE should leverage IIJA and the new DOE Office of Clean Energy Demonstration (OCED) to create a vocational CCS training program. DOE has in the past supported — and is currently supporting — a suite of regional carbon capture training. However, DOE’s 2012 program was geared toward scientists and workers already in the CCS field, and its 2022 program is specialized for 20–30 specific scientists and projects. DOE should build on this work with a new vocational CCS training program that will:

• Offer a free, 2- to 3-hour online course designed to raise private-sector awareness about CCS technologies, benefits, and prospects for future projects and employment. DOE should advertise this new program alongside existing grant programs and industry connections.
• Work with community colleges, four-year institutions, and workers’ unions to disseminate the online course and create aligned vocational training programs specifically for CCS jobs. In this effort, DOE should target states like Texas and Louisiana that have carbon-rich economies and low public approval of CCS.
• Partner with DOE-sponsored public university programs and private issue groups like ConservAmerica, American Conservation Coalition, and the Center for Climate and Energy Solutions to advertise and update the course.

This educational program would be cost-effective: the online course would require little upkeep, and the vocational training programs could be largely developed with financial and technical support from external partners. Initial funding of $5 million would cover course development and organization of the vocational training programs.

Pillar 2. Create an accelerator for the development and commercialization of modular CCS technologies.

The DOE Office of Fossil Energy and Carbon Management (FECM) or OCED should continue to lead global innovation by creating the Modular CCS Innovation Program (MCIP). This accelerator would provide financial and technical support for U.S. research and development (R&D) startups working on smaller-scale, flexible CCS for industrial plants (e.g., bulk chemical, cement, and steel manufacturing plants). The MCIP should prioritize technology that can be implemented widely with lower costs for installation and upkeep. For example, MCIP projects could focus on improving the resistance of amine-based systems to specialty chemicals, or on developing a modular system like Carbon Clean that can be adopted by different industrial plants. Projects like these have been proposed by different U.S. companies and laboratories, yet to date they have received comparatively less support from government loans or tax credits. 

Figure 1. 

Proposed timeline of the MCIP accelerator for U.S. startups.

As illustrated in Figure 1, the MCIP would be launched with a Request for Proposals (RFP), awarding an initial $1 million each to the top 10 proposals received. In the first 100 days after receiving funding, each participating startup would be required to submit a finalized design and market analysis for its proposed product. The startup would then have an additional 200 days to produce a working prototype of the product. Then, the startup would move into the implementation and commercialization stages, with the goal to have its product market-ready within the next year. Launching the MCIP could therefore be achieved with approximately $10 million in grant funding plus additional funding to cover administrative costs and overhead — amounts commensurate with recent DOE funding for large-scale CCUS projects. This funding could come from the $96 million recently allocated by DOE to advance carbon capture technology and/or from funding allocated in the IIJA allocation. Implementation funding could be secured in part or in whole from private investors or other external industry partners.

Pillar 3. Create a private-facing CCS Innovation Connector (CIC) to increase stability and investment. 

The uncertainty and risk that discourages private investment in CCS must be addressed. Many oil and gas companies such as ExxonMobil have called for a more predictable policy landscape and increased funding for CCS projects. Creating a framework for a CCS Innovation Connector (CIC) within the DOE OCED based on a similar fund in the European Union would decrease the perceived risks of CCS technologies emerging from MCIP. The CIC would work as follows: first, a company would submit a proposal relating to point-source carbon capture. DOE technical experts would perform an initial quality-check screening and share proposals that pass to relevant corporate investors. Once funding from investors is secured, the project would begin. CIC staff (likely two to three full-time employees) would monitor projects to ensure they are meeting sponsor goals and offer technical assistance as necessary. The CIC would serve as a liaison between CCS project developers and industrial sponsors or investors to increase investment in and implementation of nascent CCS technologies. While stability in the CCS sector will require policies such as increasing carbon tax credits or creating a global carbon price, the CIC will help advance such policies by funding important American CCS projects. 

Conclusion

CO₂ emissions will continue to rise as U.S. energy demand grows. Many existing federal policies target these emissions through clean energy or DAC projects, but more can and should be done to incentivize U.S. innovation in point-source CCS. In particular, increased federal support is needed for small-scale and modular carbon capture technologies that target complex areas of U.S. industry and avoid the high costs and risks of large-scale infrastructure installations. This federal support should involve improving CCS education and training, accelerating the development and commercialization of modular CCS technologies for the industrial sector, and connecting startup CCS projects to private funding. Biden Administration policies — coupled with growing public and industrial support for climate action — make this the ideal time to expand the reach of our climate strategy into an “all of the above” solution that includes CCS as a core component.

Achieving energy decarbonization in America will require a power grid supplied by renewable energy and backed by ample energy storage. The challenge is that many types of renewable energy provide power intermittently depending on factors such as the time of day or weather conditions. To maintain grid reliability while working towards a nation powered by 100% renewable energy, the Biden-Harris Administration should accelerate adoption of distributed energy resources and expand transmission capacity to create a more unified national power grid. These efforts will increase equitable access to clean energy, accelerate investment in renewables, and create thousands of long-term, high-skilled jobs in a robust American energy sector.

Challenge and Opportunity

The U.S. power grid was built in—and designed for—a previous energy era: one in which on-demand, regionally located energy supplies (such as coal-fired power plants) are delivered to thousands of customers along one-direction transmission lines and managed by public utilities that operate as local monopolies.

But as our nation pushes to replace fossil fuels with cleaner sources of power, the energy landscape will look quite different. Many types of renewable energy provide power intermittently depending on factors such as the time of day or weather conditions. Supplies of such energy sources cannot be ramped up easily (or at all) during periods of peak demand. Meanwhile, smart-and-distributed-energy technologies—such as smart thermostats, rooftop solar, and electric vehicles—have led to an increasingly dynamic and complex power grid. 

The policy response to these rapid changes in the way we generate power has mostly constituted a patchwork of efforts at the state and regional level. Federal attention to renewables has focused largely on tax incentives and on regulation via orders from the Federal Energy Regulatory Commission (FERC). For instance, FERC’s recent order opening wholesale energy markets to distributed energy resources is an important step towards increasing the share of renewables in the U.S. energy sector. Incentives to increase adoption of renewables and investment in research and development (R&D) to improve performance and utility of renewables are essential as well. But to realize a quick and smooth transition to a clean-energy future, concerted action is needed to tackle the intermittency challenge that renewables pose.

Such action can proceed via two complementary pathways simultaneously. The first pathway is using technology advances like vehicle-to-grid (V2G) integration, demand response, smart thermostats, and energy storage to flexibly shift load demand. These technologies help guide certain discretionary types of energy consumption (e.g., running a load of laundry) to occur during times when renewable-energy supply is high but demand is low, and can even enable consumers to return energy to the grid (e.g., by plugging in a parked electric vehicle so that the vehicle’s battery can be used as a power source) to during periods of peak demand.

Unfortunately, innovative energy-management technologies are markedly underutilized in the U.S. power sector. Distorted market-incentive structures, inadequate control protocols governing relationships between operators and consumers, and reliability concerns have all made utilities reluctant to embrace a more dynamic grid. Moreover, grid users (i.e., residential and commercial customers) cannot currently participate in an open energy market on an equal footing with utilities. This means that our nation is not realizing the full value of services that customers can provide to a power grid.

A smarter grid-operating system would (1) make it easier for operators to integrate distributed energy resources (DER) with more conventional types of power supplies, (2) economically incentivize changes in user behavior to smooth out energy-demand curves, and (3) enable everyday Americans to invest in distributed clean-energy technologies and earn returns for providing various services to the power grid. These steps in turn would greatly facilitate large-scale integration of renewables into the U.S. power mix.

The second pathway for addressing the intermittency problem is to finally create a connected and integrated American power grid. This would enable areas with steady supplies of renewable energy—such as solar in the Southwest, wind in Texas and the Midwest, and off-shore wind in New England—to deliver power to different parts of the country as needed. Preliminary studies done by the National Renewable Energy Laboratory (NREL) have demonstrated the economic and environmental benefits of unifying currently disconnected sections of the American power grid. Examples from California and Texas illustrate the need to and benefits of expanding national transmission capacity.

California’s power grid highlights the problems of building aggressive renewable energy portfolios without sufficient transmission. As renewable-energy capacity in California has increased, so too has curtailment—i.e., deliberate reduction in output—of that capacity (Figure 1). Roughly half of this curtailment has been due to transmission constraints. Transmission constraints have also prevented creation of approximately 72,000 potential American jobs from renewable-energy projects in the Midwest.

Figure 1

Insufficient transmission capacity coupled with increasing renewable-energy production in California is resulting in significant curtailment, or waste, of renewable energy in the state. (Source: California ISO. (2021).

In Texas, the 2021 winter storm Uri recently demonstrated an even more dire consequence of limited interconnection across our nation’s power infrastructure: the disastrous failure modes that can manifest in isolated power grids. When Uri hit, grid operators simultaneously encountered high load demand as residents turned up their heaters and inadequate energy supply as naturalgas power plants began failing in the cold weather. The rolling power failures experienced in Texas during the storm could have been mitigated if Texas had been able to import energy from other grids. Connecting the regional power grids that exist in the United States will improve grid resiliency across the nation by allowing regions to draw from each other as circumstances and local conditions demand.

Strengthening the U.S. power grid through improved use of energy-management technologies and better regional interconnections will have benefits that extend beyond grid flexibility and resilience. Grid modernization will create jobs across America in the construction, manufacturing, and energy sectors. By empowering rate-payers to produce their own energy, sell back surplus energy to the grid, and be rewarded for shifting energy-consumption patterns in response to grid conditions, grid modernization will generate economic value for consumers. By encouraging development of distributed energy resources, grid modernization will allow rural communities to replace expensive and burdensome propane shipments with continuously flowing electricity from local solar and storage installations. By transforming the U.S. power grid from a collection of regional entities into an interconnected, national resource, grid modernization will allow energy developers to tap into a national energy market instead of being limited by regional boundaries. And by creating a more unified energy sector, one in which states and communities rely on each other for power, grid modernization might even result in a more united country.

Plan of Action

The federal government plays a critical role in regulating and maintaining the nation’s grid infrastructure. As such, there is much that the Biden-Harris Administration can do—by using existing executive authority and by working with Congress on legislative actions—to strengthen the resilience of the U.S. power grid and foster integration of distributed energy resources and renewables into the U.S. power sector. Progress on these fronts will help transition the United States towards a 100% clean-energy future while creating industries and jobs centered around clean-energy resources, building up America’s advanced manufacturing base, and generating new economic opportunities for all Americans.

Actions using existing executive authority

Improve coordination between federal and state entities to reduce regulatory barriers to energy development. The federal government can support interstate grid projects (such as regional interconnections) by helping coordinate state legislatures and by reducing regulatory burdens related to such projects. In particular, FERC plays an important role in coordinating regional grid investments and planning across states (such as the Eastern seaboard’s off-shore wind grid). The Biden-Harris Administration should prioritize this function of FERC in order to reduce the bureaucratic hurdles faced by energy developers. The new White House Office of Domestic Climate Policy (Climate Policy Office) can play an additional coordinating role, helping to align technical research conducted at the Department of Energy (DOE)‘s national labs with policy and regulatory work conducted through the White House Office of Science and Technology Policy (OSTP), the Department of Interior, the Department of Defense, and other relevant federal entities. Finally, the Climate Policy Office can work with state legislatures to provide state-specific recommendations (i.e., recommendations tailored to the unique natural resources and electricity market structures of each state) on how to best incentivize investment and job growth in the energy industry.

Actions involving collaboration with Congress

Scale R&D innovations in clean-energy technologies by increasing relevant DOE funding. The federal government can use its federal budget to help scale R&D innovations in clean energy and help advance those innovations towards manufacturing and production. By accelerating commercialization and mass production of clean-energy innovations, federal investment will help make clean energy more affordable for American consumers, while simultaneously fostering job growth in the American energy sector. To that end, the next White House budget proposal should include significant funding increases for DOE, in particular for DOE’s Office of Energy Efficiency & Renewable Energy (EERE)¹, Loan Program Office (LPO), and Advanced Research Project Agency for Energy (ARPA-E). Increasing funding for these offices, which use different financing schemes to invest in technologies at different stages of commercialization, is a direct way for the federal government to scale up American-made energy technologies. These three offices heave a proven ability to identify promising candidates for energy innovation.² Increasing appropriations for these high-impact offices by $500M will represent a more than 10% increase in each offices’ budget: enough to make a difference, but not a dramatic departure from the budget increases already appropriated by Congress from FY 2019– FY 2020.

Broaden the definition of “qualifying facilities” to allow everyday Americans to participate in energy markets. Broadening the definition of “qualifying facility (QF)” in the Power Utility Regulatory Policy Act (PURPA) of 1978 to include energy storage, power quality factors, and demand response would require utilities to compensate energy providers for a wider range of services: i.e., services that go beyond simple energy production. The power grids of today and of the future are more than a collection of relatively fixed energy demands and supplies. Broadening the definition of QF would acknowledge the increasingly dynamic nature of the power grid, where excess supply often needs to be stored for later and where some portion of demand load can be shifted to different times of day. In particular, broadening the definition of QF would require utilities to (1) treat their own customers as first-class suppliers for a diverse set of potential use-cases in the energy marketplace and (2) properly compensate rate-payers for any services they provide to the power grid. Ensuring the market properly rewards customers for adopting novel clean-energy technologies will spur clean-energy market growth, drive innovation, and generate economic value for individual Americans newly able to participate in electricity markets.

Encourage construction of additional transmission capacity via tax incentives and loan programs. Tax credits have historically been a popular way for Congress to incentivize development of renewable energy such as wind and solar.³ By making the construction of additional transmission capacity similarly eligible for tax credits, Congress can support a critical piece of our nation’s grid infrastructure while creating construction jobs across the country.⁴

Frequently Asked Questions

What role can electric vehicles play in a smarter grid?

From the standpoint of the power grid, electric vehicles (EV) are essentially mobile batteries. EVs plugged in and their batteries used to store surplus renewable energy when production is high or return energy to the grid when renewable-energy production drops. However, this vehicle-to-grid exchange requires careful coordination between EV owners and utility operators. The current power grid is not designed to handle individual consumers returning power to the grid, and there is no way for utilities to compensate EV owners for the value they provide to utilities by doing so. A “smart grid” would create an electricity marketplace that EV owners could participate in. Such a marketplace would significantly improve the value proposition of EVs, encouraging EV uptake as well as domestic investment in advanced automobile manufacturing. Given that Tesla became America’s most valuable automobile company in 2020, the market has already seen the value that EVs have to offer. A smarter power grid will allow full capitalization of that value by consumers, industry, and our power grid.

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In an increasingly divisive political environment, how can bipartisan support be generated for investment in energy infrastructure?

Investing in the U.S. power grid will benefit many constituent groups, allowing for a multifaceted approach to messaging. For instance:

• Solar energy coupled with storage can lower electricity costs and reduce reliance on imported natural gas or propane for rural and isolated communities.


• Certain U.S. geographic regions, such as the Southwest, contain some of the greatest natural renewable energy sources in the world. Directing federal incentives towards such areas will create jobs at the state and local level while reducing foreign energy dependence.


• President Eisenhower passed the Interstate Highway Act by appealing to bipartisan support in a Cold War environment and helped create our modern road infrastructure. The transmission power grid, as the “interstate highway” for the electricity that powers America, is a similarly important piece of infrastructure that will help America maintain its national security and international competitiveness.

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How do established or maturing clean-energy technologies relate to America’s economic and strategic interests?

Distributed clean-energy technologies, like energy storage, residential solar, on-shore and offshore wind, and electric vehicles are quickly reaching economies of scale. Artificial intelligence is increasingly being used to ensure grid stability, optimize grid operations, and inform resource planning. High-voltage transmission lines and power inverters are critical parts of the infrastructure that makes up the backbone of the power grid. Each of these technologies presents an economic opportunity for the federal government to invest in building new infrastructure and spur private development, creating new jobs and industries in the process. In addition, many of these technologies are currently manufactured abroad or rely on minerals imported from foreign countries. The federal government should direct research funding towards technologies that do not rely on foreign imports and that leverage America’s existing manufacturing infrastructure and natural resources. Finally, maintaining a robust workforce of professionals who know how to manage and debug production processes will be important for ensuring that our nation is capable of translating American R&D into products that can be manufactured domestically. Following through on the Plan of Action outlined in this proposal will help open the power grid to broader participation and ensure cleaner, more equitable power distribution while simultaneously advancing American technical competitiveness and manufacturing capabilities.

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Why is changing the definition of qualifying facilities under PURPA important to helping Americans achieve access to the power grid market?

The federal government’s recent involvement in the power market has focused on tax credits and R&D funding. Indeed, the Energy Act of 2020 injects significant federal funding to R&D funding programs and extends certain tax credits. While continued support for R&D funding is important and tax credits are an important market mechanism, amending PURPA is a different type of action altogether. By changing the definition of qualifying facilities, the federal government categorically changes the basis by which utilities buy power. Firmly establishing an expanded definition of QF via legislation will prevent non-elected bodies from arbitrating the definition of QFs either now or in the future. FERC performed such arbitration in 2020, to the detriment of energy storage projects and the chagrin of clean-energy trade associations.

Amending the definition will force the market to properly compensate consumer-provided services that provide value to the grid. For instance, smart thermostats can reduce electricity used for heating and cooling when energy supply drops or electric vehicles can be optimized to only charge when supply is ample. Incentivizing behavioral changes like these is critical for achieving a 100% clean power grid. Amending PURPA to allow Americans to invest in and earn returns on a broad range of energy technologies today will prepare the United States for the power grid of tomorrow.

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Addressing the climate crisis is one of the Biden administration’s key goals. On January 27th, the president issued an executive order stating that the U.S. should aim for net zero emissions, economy-wide, by 2050. The House Energy and Commerce Committee held a hearing last week to discuss reaching this goal that featured leaders from industry, academia, and the environmental justice community.

The need to decarbonize the energy sector

To begin slowing the effects of climate change, many experts believe it is imperative to achieve net zero emissions by 2050, with the first step being to decarbonize the energy sector by 2035. This perspective was emphasized during the hearing by Christy Goldfuss, senior vice president of Energy and Environment Policy at the Center for American Progress, who explained how decarbonizing the energy sector would eliminate greenhouse gas emissions from electricity-generating facilities. As of 2016, the five main sources of electricity in the U.S. were natural gas (34%), coal (30%), nuclear energy (20%), hydroelectricity (7%), and wind (6%). The burning of fossil fuels accounts for 98% of the greenhouse gas emissions from electricity generation. Other emissions include nitrous oxide from some coal burning plants, and sulfur hexafluoride from electricity transmission and distribution systems. While the energy sector’s emissions are currently decreasing at a rate of about 3% per year, it is estimated that levels will continue to decline in the 2020s, rise again in the 2030s, and then remain flat through 2050. All of this will occur as the economy expands and demands for electricity increase.

Challenges and potential solutions

There are many challenges to decarbonizing the energy sector within the next 15 years. As other industries increase their use of electricity, such as the auto industry to meet growing demand for electric vehicles, the energy sector will have to balance the need to increase its capacity and efficiency with reducing its dependence on fossil fuels. Other challenges include adapting to the growing use of renewable energy sources by developing better batteries, reducing wasteful energy consumption, and reducing the amount of carbon released into the air from power plants.

There are also a number of potential solutions for eliminating greenhouse gas emissions from the energy sector.

Commercial buildings consume a massive amount of electricity in the U.S., and to reduce energy consumption, buildings can be updated with energy efficient appliances and lighting, or greenery to cool rooftops and urban areas. Specifically, widespread use of LED lighting (as opposed to not using LEDs at all) could save 348 terawatt-hours, which is the equivalent output of 44 large electric power plants, and save over $30 billion. In addition, green roofs can reduce a building’s energy consumption by 0.7% compared to a conventional roof, and lower city-wide temperatures by up to 5 degrees Fahrenheit.

Wind and solar energy are projected to grow in the next few years, and while their costs have decreased dramatically, their utility will also depend on innovations in energy storage. In 2010, solar power cost $0.37 per kilowatt-hour, and by 2018, the cost declined to only $0.09 per kilowatt-hour. Natural gas, a source of carbon emissions, is one of the least expensive forms of electricity and costs about $0.06 per kilowatt-hour. As the U.S. relies more on renewable energy, there is a growing movement toward developing a flexible power grid with a wider deployment of technologies that store energy during periods of lower production. The most common type of energy storage for the grid today is pumped hydroelectric storage. Electricity is used to pump water uphill to a reservoir where it is stored. When the grid needs more power, that water is released, and it runs downhill through turbines to generate electricity. This process allows energy to be stored for extended periods of time, though it is costly to maintain and new facilities could cause adverse environmental impacts. Moreover, lithium-ion batteries have decreased in cost over the past few years, but can only economically store electricity for about four hours, and further technological advancements are necessary to improve their performance.

Carbon capture technologies can pull carbon emissions out of the air to prevent them from causing further climate damage. One method is a post-combustion scrubbing device which is added to a smokestack that releases carbon, such as those on coal, gas, or oil-fired generators. Some other potential options that can remove carbon from the air include:

• Constructing facilities that can chemically separate carbon dioxide from the ambient air and store it underground;
• Planting trees to expand existing forests or replace ones that had been cut down; and
• Pulverizing certain types of rocks, spreading them on fields or in the ocean, and using them to soak up carbon.

It is clear that much needs to be done to slow the effects of climate change. Fortunately, there are several emerging technologies that could help reduce the U.S. carbon footprint by 2050. It is expected that the Biden administration and Congress will continue to make achieving a net zero emissions economy a priority, and we encourage the CSPI community to participate in serving as a resource to federal officials on this topic.