The Inflation Reduction Act (IRA) is the largest climate investment in history. FAS scientists offer policy ideas to maximize the impacts of this investment on U.S. competitiveness, energy security, resilience, and more.

Washington, D.C. – August 16, 2024 – The Federation of American Scientists (FAS), the non-partisan, nonprofit science think tank dedicated to using evidence-based science for the public good, is celebrating the two-year anniversary of the signing of the Inflation Reduction Act (IRA) by sharing policy ideas to drive continued successful implementation of this landmark legislation.

The IRA is a United States federal law which aims to reduce the federal government budget deficit, lower prescription drug prices, and invest in domestic energy production while promoting clean energy. It was passed by the 117th United States Congress and it was signed into law by President Biden on August 16, 2022. The IRA has catalyzed $265 billion in new clean energy investments and created hundreds of thousands of jobs in the United States, putting us on a path to achieving climate goals while boosting the economy. 

“In just two years, the Inflation Reduction Act has driven down costs of energy and transportation for everyday Americans while reining in catastrophic climate change” says Hannah Safford, Associate Director of Climate and Environment. “This legislation proves that when we invest in a better future, everyone wins.”

“The IRA enables the country to move toward ambitious climate goals. We already see the effects with new policy proposal ideas that could supercharge pursuit of these goals,” says Kelly Fleming, Associate Director of Clean Energy. “The Department of Energy finds that with the Inflation Reduction Act and Bipartisan Infrastructure Law, we can double the share of clean electricity generation to 80% in 2030.”

FAS, one of the country’s oldest science policy organizations, works with scientists and technologists to propose policy-ready ideas to address current and emerging threats, including climate change and energy insecurity.  

On today’s two-year anniversary of the IRA, FAS is highlighting policy proposals that build on the IRA’s successes to date and suggest opportunities for continued impact. Examples include:

Geothermal 

Geothermal technologies became eligible for tax credits under IRA.

Breaking Ground on Next-Generation Geothermal Energy The Department of Energy (DOE) could take a number of different approaches to accelerating progress in next-generation geothermal energy, from leasing agency land for project development to providing milestone payments for the costly drilling phases of development.

Low-Carbon Cement 

The IRA provides $4.5B to support government procurement of low-carbon  versions of this cornerstone material.

Laying the Foundation for the Low-Carbon Cement and Concrete Industry Cement and concrete production is one of the hardest industries to decarbonize. Using its Other Transactions Authority, DOE could design a demand-support program involving double-sided auctions, contracts for difference, or price and volume. 

Critical Minerals and Energy Manufacturing

Supply chains necessary for battery technologies are being built out in the U.S. thanks to IRA incentives. The new Manufacturing and Energy Supply Chain Office (MESC) has implemented and unveiled programs to retool existing facilities for EV manufacturing, and rehire existing work, and provide tax incentives for clean energy manufacturing facilities with funding provided in the IRA. The office supports the development and deployment of a domestic clean energy supply chain, including for critical minerals needed for batteries and other advanced technologies.

Critical Thinking on Critical Minerals: How the U.S. Government Can Support the Development of Domestic Production Capacity for the Battery Supply Chain Batteries for electric vehicles, in particular, will require the U.S. to consume an order of magnitude more lithium, nickel, cobalt, and graphite than it currently consumes.

Nature Based Solutions

Billions of dollars have been invested into nature based solutions, including $1 billion in urban forestry, that will make communities more resilient to climate change.

A National Framework For Sustainable Urban Forestry To Combat Extreme Heat. To realize the full benefits of the federal government’s investment in urban forestry, there will need to be a coordinated, equity-focused, and economically validated federal plan to guide the development and maintenance of urban forestry that will allow the full utilization of this critical resource.

Submit Your Science and Technology Policy Ideas

The IRA is one lever to make real-world change; good ideas can come from anyone, including you.

FAS is soliciting federal policy ideas to present to the next U.S. presidential administration through the Day One 2025 project, which closes soon. Interested parties can submit science and technology related policy ideas year-round at FAS’s Day One website page.

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ABOUT FAS

The Federation of American Scientists (FAS) works to advance progress on a broad suite of contemporary issues where science, technology, and innovation policy can deliver dramatic progress, and seeks to ensure that scientific and technical expertise have a seat at the policymaking table. Established in 1945 by scientists in response to the atomic bomb, FAS continues to work on behalf of a safer, more equitable, and more peaceful world. More information at fas.org.

The Foundation for Energy Security and Innovation is now a reality: an affiliated but autonomous non-profit organization authorized by Congress to support the mission of the U.S. Department of Energy and to accelerate the commercialization of energy technologies. FESI’s establishment was a vital first step, but its value depends on what happens next. In order to maximize FESI’s impact, the board and staff should think big from the start, identify unique high-leverage opportunities to complement DOE’s work, and systematically build the capacity to realize them. This memo suggests that:

1. FESI should align with DOE’s energy mission,
2. FESI should serve as catalyst and incubator of initiatives that advance this mission, especially initiatives that drive public-private technology partnerships, and
3. FESI should develop lean and highly-networked operational capabilities that enable it to perform these functions well.

Three appendices to this memo provide background information on FESI’s genesis, excerpt its authorizing legislation, and link to other federal agency-affiliated foundations and resources about them.

Thinking Big: FESI’s Core Mission

DOE is responsible for managing the nation’s nuclear stockpile, cleaning up the legacy of past nuclear weapons development, and advancing basic scientific research as well as transforming the nation’s energy system. Although FESI’s authorizing legislation allows it to support DOE in carrying out the Department’s entire mission [Partnerships for Energy Security and Innovation Act Section b(3)(A)], the detailed description of FESI’s purposes [Sections b(1)(B)(ii), b(3)(B)] and the qualifications specified for its board members [Section b(2)(B)] signal that Congress viewed the energy mission as FESI’s primary focus. This conclusion is also supported by the hearing testimony gathered by the House Science Committee.

“Catalyz[ing] the timely, material, and efficient transformation of the nation’s energy system and secur[ing] U.S. leadership in energy technologies,” the two pillars of DOE’s energy mission, are extremely challenging responsibilities. The energy system makes up about 6% of the U.S. economy, or about $4000 per person per year, and its importance outweighs this financial value. This system keeps Americans warm in the winter and cool in the summer, gets us to our jobs and schools, and allows us to work, learn, and enjoy life. The system’s transformation to cleaner and more secure resources must not interrupt the affordable and reliable provision of these and many other vital services.

In addition to posing daunting system management challenges, the incipient energy transition is testing America’s global technological leadership. The United States now leads the world in oil and natural gas production, thanks in part to breakthroughs enabled by DOE. But the risks imposed by the use of conventional energy resources have risen. Other nations, notably China and Russia, have taken aggressive actions to establish leadership positions in new energy technologies, such as advanced nuclear power, solar panels, and lithium-ion batteries. DOE is tasked with reclaiming these fields.

DOE’s ambitious energy mission would benefit more from FESI’s support than would DOE’s other responsibilities. The energy system, unlike the nuclear stockpile or cleanup, and to a far greater extent than basic science, lies outside federal control. To transform it and secure global leadership in key technologies, DOE will have to collaborate closely with the private sector, philanthropy, and non-profits. Strengthening such collaboration, particularly to accelerate commercialization of energy technologies, is precisely the purpose specified for FESI by Congress. [Sections b(1)(B)(ii); b(3)(B)(i)]

FESI’s alignment with DOE’s energy mission should be resilient to changes in Congress and the administration. Its authorizing legislation was sponsored by members of both parties across three Congresses and won overwhelming majorities when voted on as a freestanding bill. By law, a majority of its board members must have experience in the energy sector, research, or  technology commercialization [Section b(2)(B)(iii)(III)] FESI will have difficulty building strong collaborations and thus achieving its congressional mandate unless it is seen as a long-term partner with a clear and stable mission.

Filter, Catalyst, and Incubator: FESI’s Core Functions

DOE brings many assets to its mission of energy system transformation and global technological leadership. It invests over $9 billion per year in energy research, development, and demonstration, far more than any other entity in the world. Its network of 17 national laboratories and thousands of academic collaborators converts those funds into a vast store of knowledge and opportunities for real-world impact. It possesses financial and regulatory tools that allow it to shape energy markets to varying degrees.

FESI’s responsibility – and opportunity – is to help DOE use these assets to more effectively advance its energy mission. More effective public-private partnerships to accelerate technology commercialization, including such dimensions as technology maturation, new product development, and regional economic development [Sections b(3)(B)(ii), (iii), and (v)] will be an enduring priority. But the specific use-cases and projects that FESI invests in will change as the global energy landscape does. Indeed, the dynamic nature of that landscape, along with structural constraints on DOE, is a key justification for FESI’s creation. FESI must develop processes that enable it to quickly identify and act on points of leverage that enhance the impact of DOE’s assets in a rapidly-changing system.

These processes should perform three vital functions, all of which will benefit from collaboration between FESI and the national laboratory-affiliated foundations [Section b(4)(G)].  The first is to serve as a filter that helps DOE gather and sift valuable insights about the global energy landscape that the department’s leadership might otherwise miss. Information flows in a large bureaucracy like DOE are inevitably shaped by its organizational structure. The structure of DOE’s energy-focused units and the national labs is in many respects a legacy of the times in which they were established and does not map well to today’s energy system. In addition, DOE’s immense scale means that the voices of newer and less powerful players in the system, such as start-up companies and community groups, may be drowned out. Some voices of the grassroots internal to DOE and the labs may also be hard to discern at the leadership level. The Secretary of Energy’s Advisory Board helps to fill these gaps, but it is constrained by the Federal Advisory Committee Act and other laws and regulations. FESI’s flexibility, bipartisan character, and non-governmental status, bolstered by a strong relationship with the lab foundations, will allow it to recognize DOE’s blind spots, whether internal or external. 

FESI should draw on this new or neglected information to perform the second function: catalyzing actionable opportunities that advance DOE’s energy mission. It can develop these opportunities (jointly, as appropriate, with one or more lab foundations) by convening a broad range of stakeholders in formats that DOE cannot effectively utilize and at a pace that DOE cannot match. For example, a group of firms in an emerging clean energy industry may identify a shared technological need that international competitors are pursuing aggressively. FESI could support these firms to articulate their need, identify DOE-affiliated assets that could address it, and rapidly assemble a public-private partnership that aligns the two. Such a partnership might have a regional focus and engage state and local governments and regionally-focused philanthropy as well. If FESI’s information filter were to pick up unrecognized obstacles to effective community engagement or lack of attention to end-user priorities, it could assemble cross-sectoral partnerships appropriate to those opportunities. The catalyst function could be particularly important for crisis response, when speed and agility are essential, and DOE’s formal processes are likely to slow the agency down. 

FESI’s third core function should be to incubate and ultimately spin out the initiatives that it has catalyzed. The process of assembling each initiative will require FESI to provide basic administrative support, like internal communication and coordination. FESI should frequently go several steps further by raising seed funding for each initiative, particularly from non-governmental sources, and serving as its external champion. FESI should not, however, become the permanent home of mature partnerships. The managerial demands imposed by carrying out this function risk undermining the filter and catalyst functions. Spinning out the successes will permit FESI’s leadership to hunt more effectively for new opportunities. The destination for the spinoffs might be new or expanded programs within DOE, an existing non-profit like an industry consortium or community foundation, or a new organization.

Lean and Intensely Networked: FESI’s Operational Capabilities

FESI’s high ambition, dynamic functions, and unique institutional position determine the capabilities it will need to operate effectively. Above all, it must be plugged intensively into a broad network that spans the energy industry; DOE and the national labs; states, communities, and Congress; and philanthropy. FESI will only be able to spot what DOE could do better by having a savvy understanding of what DOE is already doing and what its potential partners want to be doing. FESI must be able to gather and interpret this information continuously at a modest cost, which puts a premium on networking. 

FESI board members must be vital nodes of its network. FESI’s authorizing statute specifies that the board represent “a broad cross-section of stakeholders.” The members will hold positions that provide insights and contacts of value to FESI and should be selected to build and maintain the network’s breadth. The board’s ex officio representatives from DOE will provide complementary perspectives and connections inside the Department. FESI’s staff will only have the knowledge and resources required to do their jobs well if the entire board is active and engaged (but not micro-managing the staff).

FESI’s staff should be led by an executive director who is responsible for its day-to-day operations [Section b(5)(A)] and has high credibility throughout the energy system and with both political parties. Staff members should bring sector-spanning networks to the organization that leverage those of the board. Even more important, the staff must possess the entrepreneurial skills, and technological and market knowledge, to recognize and act on promising opportunities. Prior experience in business, social, or public entrepreneurship – building new companies, non-profit organizations, and government programs – is likely to be particularly valuable to FESI.

Running lean should be a value for a FESI and will likely be a necessity as well. The value lies in taking initiative and moving quickly. The necessity arises from the likely limits on federal appropriations for operations, which are  authorized at $3 million annually [Section b(11)] and may not rise to that level. To be sure, FESI must raise resources from non-federal sources – indeed, that will be one of its core challenges. But those resources are likely to be much easier to raise if they are devoted to projects rather than operations. 

Finally, FESI will need to mitigate risks to its reputation that might arise from real and perceived conflicts of interest of the board and staff as well as from the images and interests of its potential partners. A pristine reputation will be vital to maintaining the confidence of DOE, Congress, and external stakeholders. FESI should seek to reduce the cost in money and time of rigorous vetting and disclosure, but ultimately this investment is an essential one that must be borne.

Appendix 1. A Brief Prehistory of FESI

• The immediate genesis of FESI’s authorizing legislation was idea #22 in this 2016 ITIF report. 
• ITIF and its partners socialized the concept beginning in the 115^th Congress, including at this 2018 event, which featured Reps. Fleischmann (current chair of the House Energy & Water Development appropriations subcommittee) and Lujan (now Senator from New Mexico)
• During the same Congress, Rep. Lujan and Sen. Coons authored the first bills to authorize a DOE-affiliated foundation, which were co-sponsored on a bipartisan basis, a pattern that was sustained through the concept’s ultimate passage.
• Jetta Wong took the lead role along with me in driving the foundation initiative for ITIF during the 116^th Congress (2019-2020). That work included two stakeholder workshops and extensive interview and documentary research, leading to our 2020 “Mind the Gap” report, which provides our fullest vision for the foundation’s potential role in innovation and commercialization. 
• In July 2020, Jetta testified on the foundation before the House Science Committee along with Jennifer States (Maritime Blue), Farah Benahmed (Breakthrough Energy), Emily Reichert (Greentown Labs), and Lee Cheatham (PNNL)
• Our work led to an appropriations report that required DOE to sponsor a study by the National Academy of Public Administration, which was issued in January 2021. This report has a good round-up of other agency foundations, as does the 2019 CRS report on the topic
• The Partnerships for Energy Security and Innovation Act, sponsored by Rep. Stansbury and Sen. Coons in the 117^th Congress, won an 83-14 vote in the Senate in 2021, passed the House in early 2022, and was ultimately incorporated into the August 2022 CHIPS and Science Act. The Act passed just after Jetta joined the administration; I partnered with Kerry Duggan of SustainabiliD for the next phase of work. Our August 2022 blog post provides a good synopsis of the effort up to the bill’s passage.
• With SustainabiliD and later with the Federation of American Scientists and with support from Schmidt Futures and Breakthrough Energy, the “Friends of FESI” focused on sustaining support for FESI and generating project ideas.
  • Jetta joined the panel on FESI at the 2023 ARPA-E summit, where DOE held its first public events on FESI, and we participated in the workshop that DOE organized there.
  • We responded to DOE’s RFI on FESI, along with several other NGOs. We also focused on FESI in a response to to DOE’s RFI on place-based innovation.
  • We developed a set of broad use-cases and held two workshops, one on geothermal energy and the other on “fast track” commercialization.
  • We worked with supporters and allies to secure FESI’s appropriation

Appendix 2. Other Federal Agency-Affiliated and National Laboratory Foundations

Numerous federal agencies have Congressionally authorized non-governmental foundations that work with them to advance their missions. The National Park Foundation (NPF) is the oldest, dating back to 1935. Anyone who wants to support a particular national park, or the system as a whole, can do so through a contribution to NPF. Similarly, donors who care about public health can give to the CDC Foundation (CDC Foundation) or the Foundation for NIH (FNIH). A 2021 report by the National Academy of Public Administration (NAPA), which recommended establishing a foundation for DOE, reviews a wide range of agency-related foundations, as does the 2020 ITIF “Mind the Gap” report and a 2019 CRS report.

As the NAPA report describes, all of these foundations leverage federal investment with private contributions to complement and supplement their agency affiliate, while guarding against potential conflict of interest. Yet, more remarkable than this commonality among is the foundations’ diversity. Each seeks to complement and supplement its partner agency, but because each agency has a different mission, structure, and functions, each affiliated foundation is unique.

FESI will likely have much in common with the FNIH. Like NIH, DOE is a major research funder that advances a critical national mission. Like NIH, DOE must rely on the private sector to turn advances made possible by the R&D it funds into technologies that make a difference on the ground. FNIH’s contributions to fighting the pandemic illustrate how having a flexible non-profit partner for an agency can advance the agency’s mission in a moment of need. Its Pandemic Response Fund and Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV) partnership with NIH, private firms, other federal agencies, and allied governments, aids the search for treatments and vaccines and prepares the nation to defend against future pandemics.

The Foundation for Food and Agriculture Research, which is affiliated with the U.S. Department of Agriculture, is another potential source of inspiration and learning for FESI. One notable innovation made by FFAR is its use of prizes and challenges, along with more traditional competitive, cost-shared grants. To ensure technologies can scale, FFAR brings industry experts into its project design and administration. In a review of the FFAR’s progress, the Boston Consulting Group (BGC) found that FFAR’s “Congressional funding allows it to bring partners to the table and serve as an independent, neutral third party.” 

Links to agency-affiliated foundations not linked above:

• Foundation for America’s Public Lands (Interior/Bureau of Land Management)
• Henry M. Jackson Foundation for the Advancement of Military Medicine (DOD)
• National Association of Veterans’ Research and Education Foundations (VA)
• National Fish and Wildlife Foundation (Interior/Fish and Wildlife Service and NOAA)
• National Forest Foundation (Interior/US Forest Service)
• Reagan-Udall Foundation for the FDA (Food and Drug Administration)

Appendix 3. Selected Provisions of FESI’s Authorizing Statute¹

Partnerships for Energy Security and Innovation (42 USC 19281)

CHIPS AND SCIENCE ACT SEC. 10691. FOUNDATION FOR ENERGY SECURITY AND INNOVATION

(b)(1)(B) MISSION.—The mission of the Foundation shall be—

(i) to support the mission of the Department; and

(ii) to advance collaboration with energy researchers, institutions of higher education, industry, and nonprofit and philanthropic organizations to accelerate the commercialization of energy technologies.

(b)(2)(B)(iii)(II) REPRESENTATION.—The appointed members of the Board shall reflect a broad cross-section of stakeholders from academia, National Laboratories, industry, nonprofit organizations, State or local governments, the investment community, and the philanthropic community.

(III) EXPERIENCE.—The Secretary shall ensure that a majority of the appointed members of the

Board— (aa)(AA) has experience in the energy sector; (BB) has research experience in the

energy field; or (CC) has experience in technology commercialization or foundation operations;

and (bb) to the extent practicable, represents diverse regions, sectors, and communities.

(b)(3) PURPOSES.—The purposes of the Foundation are—

(A) to support the Department in carrying out the mission of the Department to ensure the security and prosperity of the United States by addressing energy and environmental challenges through transformative science and technology solutions; and

(B) to increase private and philanthropic sector investments that support efforts to create, characterize, develop, test, validate, and deploy or commercialize innovative technologies that address crosscutting national energy challenges, including those affecting minority, rural, and other

underserved communities, by methods that include—

(i) fostering collaboration and partnerships with researchers from the Federal Government, State 

governments, institutions of higher education, including historically Black colleges or universities,

Tribal Colleges or Universities, and minority-serving institutions, federally funded research and development centers, industry, and nonprofit organizations for the research, development, or commercialization of transformative energy and associated technologies;

(ii) strengthening and sharing best practices relating to regional economic development through scientific and energy innovation, including in partnership with an Individual Laboratory-Associated Foundation;

(iii) promoting new product development that supports job creation;

(iv) administering prize competitions—

(I) to accelerate private sector competition and investment; and

(II) that complement the use of prize authority by the Department;

(v) supporting programs that advance technology maturation, especially where there may be gaps in Federal or private funding in advancing a technology to deployment or commercialization from the prototype stage to a commercial stage;

(vi) supporting efforts to broaden participation in energy technology development among individuals from historically underrepresented groups or regions; and

(vii) facilitating access to Department facilities, equipment, and expertise to assist in tackling national challenges.

(b)(4)(G) INDIVIDUAL AND FEDERAL LABORATORY-ASSOCIATED FOUNDATIONS.—

(ii) SUPPORT.—The Foundation shall provide support to and collaborate with covered foundations.

(iv) AFFILIATIONS.—Nothing in this subparagraph requires—

(I) an existing Individual Laboratory-Associated Foundation to modify current practices or

affiliate with the Foundation

(b)(5)(I) INTEGRITY.—

(i) IN GENERAL.—To ensure integrity in the operations of the Foundation, the Board shall develop and enforce procedures relating to standards of conduct, financial disclosure statements, conflicts of interest (including recusal and waiver rules), audits, and any other matters determined appropriate by the Board.

(b)(6) DEPARTMENT COLLABORATION.—

(A) NATIONAL LABORATORIES.—The Secretary shall collaborate with the Foundation to develop a process to ensure collaboration and coordination between the Department, the Foundation, and National Laboratories

The Department of Energy (DOE) announced recently that it will finance the restart of a nuclear power plant through a new program to revitalize energy infrastructure and reduce greenhouse gas emissions. Restarting the Palisades Nuclear Power Plant, which was shut down in 2022, will be the first restarted nuclear power plant in U.S. history, bringing back much needed clean firm energy supply to Michigan, Illinois, and Indiana. DOE estimates that the addition of this clean capacity will prevent yearly emissions equivalent to that emitted by nearly one million gas-powered cars. The plant owners also shared intentions to use existing infrastructure to build two small modular reactors, a newer type of reactor technology that can be deployed more flexibly than existing commercial light-water reactors. DOE’s announcement is a significant step in addressing emerging energy needs and reducing emissions, but more is needed to ensure a successful plant restart and to expand clean energy capacity broadly.

Nuclear power was commercialized in the U.S. in the 1950s, and electricity generated by this technology accounts today for about 19% of the country’s electricity supply. Nuclear is a baseload power source, also called clean firm power, that complements generation from intermittent sources such as wind and solar energy. But in many cases, nuclear energy struggles to compete economically with other energy sources. The original decision to close the Palisades was primarily financial. Consumers Energy, the utility that purchased energy from the plant, intended to replace the nuclear energy with natural gas, which is ample and inexpensive. The dynamic is not unique—utilities are using more fossil fuels as the grid attempts to respond to a rapid increase in demand. But commercial light-water reactors, like those at the Palisades, are the most mature clean technology option to meet near-term energy needs while reducing emissions. The federal government should shape the market for nuclear power, or risk more plants shutting down—and making ambitious emissions reductions goals likely impossible to meet. 

The conditional commitment from the DOE Loan Programs Office (LPO) to finance the Palisades restart ensures nuclear power is cost-competitive, and this particular type of loan is an important tool for DOE to develop and deploy more clean energy technologies. Since the loans are conditional on the companies meeting agreed-upon commitments, the arrangement allows DOE to closely monitor progress and halt funding if the project does not meet expectations. The LPO, established by Congress in 2005 to invest in critical energy and infrastructure projects, has found much success, especially with an increase in funding from the recent Inflation Reduction Act (IRA). Since the IRA passed in 2022, LPO has issued over $16 billion in conditional commitments and disbursed over $30 billion. The office’s approaches to lending seem to work well—for FY2023, they reported actual losses of only 3.1% of total funds disbursed. Other examples of recent conditional commitments include a real-time methane emissions monitoring network and a solar energy storage microgrid, reflecting investments across key clean energy technologies. But the Palisades commitment is unique as it is the first issued through DOE’s Energy Infrastructure Reinvestment program, which has $250 billion available to fund clean energy projects that revitalize or replace existing infrastructure. The $1.5 billion loan to Palisades will help fund refurbishment, upgrades, and testing to operate the plant for an estimated 25 years. Since the initial appropriations for this program expire in September of 2026, the DOE should act quickly to finance similar projects that revitalize existing infrastructure.

Outside of loans, the federal government can do more to support the restart and ensure other nuclear plants continue generating clean baseload energy for as long as safely possible. Next, the Nuclear Regulatory Commission (NRC) will need to amend the license of a plant it already classified in a state of decommissioning. The NRC formed the Palisades Restart Panel (PRP) to advise on the reviews required for this new regulatory situation. Although the primary objective of the PRP is to advise on the Palisades, NRC gave the panel the option to provide general recommendations if other licensees pursue a restart. Twenty other nuclear power reactor sites are in decommissioning status. To provide clarity to the nuclear industry on options for these sites, the panel should take advantage of this opportunity to advise generally on a process for restarts. The DOE should also signal whether it intends to make further investments in this area. This first-of-kind project could demonstrate that restarting plants is a fast and economical way to increase clean firm generating capacity.

Federal policymakers, agencies, and the private sector should consider additional options for expanding nuclear capacity at this moment when nuclear power is viewed favorably by most of the public and partisan division is low. For example, utilities could form consortiums to build multiple reactors of the same design, reducing risk and cost with the construction of each new reactor. The DOE could mass-acquire NRC permits on behalf of developers, or use the Foundation for Energy Security and Innovation (FESI) to accelerate licensing through stakeholder and community engagement. Congress could also consider categorical exclusions under the National Environmental Policy Act for actions that use existing energy infrastructure and have a net positive benefit to the environment, such as building nuclear power plants on former coal plant sites. The LPO has nearly $412 billion in loan authority to advance clean energy. It should continue to negotiate and award conditional commitments for more clean energy projects across the country, working closely with applicants and recipients to ensure adequate progress and effective use of taxpayer dollars. Other federal policymakers should keep momentum on DOE’s commitment to Palisades with further actions to keep nuclear power on the grid.

The United States is committed to the ambitious goal of reaching net-zero emissions globally by 2050, requiring rapid deployment of clean energy domestically and across the world. Reducing emissions while meeting energy demand requires firm power sources that produce energy at any time and in adverse weather conditions, unlike solar or wind energy. Advanced nuclear reactors, the newest generation of nuclear power plants, are firm energy sources that offer potential increases in efficiency and safety compared to traditional nuclear plants. Adding more nuclear power plants will help the United States meet energy demand while reducing emissions. Further, building advanced nuclear plants on the sites of former coal plants could create benefits for struggling coal communities and result in significant cost savings for project developers. Realizing these benefits for our environment, coal communities, and utilities requires coordinating and expanding existing efforts. The Foundation for Energy Security and Innovation (FESI), the US Department of Energy (DOE), and Congress should each take actions to align and strengthen advanced nuclear initiatives and engagement with coal communities in the project development process.

Challenge and Opportunity

Reducing carbon emissions while meeting energy demand will require the continued use of firm power sources. Coal power, once a major source of firm energy for the United States, has declined since 2009, due to federal and state commitments to clean energy and competition with other clean energy sources. Power generated from coal plants is expected to drop to half of current levels by 2050 as upwards of 100 plants retire. The DOE found that sites of retiring coal plants are promising candidates for advanced nuclear plants, considering the similarities in site requirements, the ability to reuse existing infrastructure, and the overlap in workforce needs. Advanced nuclear reactors are the next generation of nuclear technology that includes both small modular reactors (SMRs), which function similar to traditional light-water reactors except on a smaller site, and non-light-water reactors, which are also physically smaller but use different methods to control reactor temperature. However, the DOE’s study and additional analysis from the Bipartisan Policy Center also identified significant challenges to constructing new nuclear power plants, including the risk of cost overrun, licensing timeline uncertainties, and opposition from communities around plant sites. Congress took steps to promote advanced nuclear power in the Inflation Reduction Act and the CHIPS and Science Act, but more coordination is needed. To commercialize advanced nuclear to support our decarbonization goals, the DOE estimates that utilities must commit to deploying at least five advanced nuclear reactors of the same design by 2025. There are currently no agreements to do so. 

The Case for Coal to Nuclear

Coal-dependent communities and the estimated 37,000 people working in coal power plants could benefit from the construction of advanced nuclear reactors. Benefits include the potential addition of more than 650 jobs, about 15% higher pay on average, and the ability for some of the existing workforce to transition without additional experience, training, or certification. Jobs in nuclear energy also experience fewer fatal accidents, minor injuries, and harmful exposures than jobs in coal plants. Advanced nuclear energy could revitalize coal communities, which have suffered labor shocks and population decline since the 1980s. By embracing advanced nuclear power, these communities can reap economic benefits and create a pathway toward a sustainable and prosperous future. For instance, in one case study by the DOE, replacing a 924 MWe coal plant with nuclear increased regional economic activity by $275 million. Before benefits are realized, project developers must partner with local communities and other stakeholders to align interests and gain public support so that they may secure agreements for coal-to-nuclear transition projects.

Communities living near existing nuclear plants tend to view nuclear power more favorably than those who do not, but gaining acceptance to construct new plants in communities less familiar with nuclear energy is challenging. Past efforts using a top-down approach were met with resistance and created a legacy of mistrust between communities and the nuclear industry. Stakeholders can slow or stop nuclear construction through lawsuits and lengthy studies under the National Environmental Policy Act (NEPA), and 12 states have restrictions or total bans on new nuclear construction. Absent changes to the licensing and regulatory process, project developers must mitigate this risk through a process of meaningful stakeholder and community engagement. A just transition from coal to nuclear energy production requires developers to listen and respond to local communities’ concerns and needs through the process of planning, siting, licensing, design, construction, and eventual decommissioning. Project developers need guidance and collective learning to update the siting process with more earnest practices of engagement with the public and stakeholders. Coal communities also need support in transitioning a workforce for nuclear reactor operations.

Strengthen and Align Existing Efforts

Nuclear energy companies, utilities, the DOE, and researchers are already exploring community engagement and considering labor transitions for advanced nuclear power plants. NuScale Power, TerraPower, and X-energy are leading in both the technical development of advanced nuclear and in considerations of community benefits and stakeholder management. The Utah Associated Municipal Power Systems (UAMPS), which is hosting NuScale’s demonstration SMR, spent decades engaging with communities across 49 utilities over seven states before signing an agreement with NuScale. Their carbon-free power project involved over 200 public meetings, resulting in several member utilities choosing to pursue SMRs. Universities are collaborating with the Idaho National Laboratory to analyze energy markets using a multidisciplinary framework that considers community values, resources, capabilities, and infrastructure. Coordinated efforts by researchers near the TerraPower Natrium demonstration site investigate how local communities view the cost, benefits, procedures, and justice elements of the project. 

The DOE also works to improve stakeholder and community engagement across multiple offices and initiatives. Most notably, the Office of Nuclear Energy is using a consent-based siting process, developed with extensive public input, to select sites for interim storage and disposal of spent nuclear fuel. The office distributed $26 million to universities, nonprofits, and private partners to facilitate engagement with communities considering the costs and benefits of hosting a spent fuel site. DOE requires all recipients of funds from the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, including companies hosting advanced nuclear demonstration projects, to submit community benefits plans outlining community and labor organization engagement. The DOE’s new Commercial Liftoff Reports for advanced nuclear and other clean energy technologies are detailed and actionable policy documents strengthened by the inclusion of critical societal considerations.

Through the CHIPS and Science Act, Congress established or expanded DOE programs that promote both the development of advanced nuclear on sites of former coal plants and the research of public engagement for nuclear energy. The Nuclear Energy University Program (NEUP) has funded technical nuclear energy research at universities since 2009. The CHIPS Act expanded the program to include research that supports community engagement, participation, and confidence in nuclear energy. The Act also established, but did not fund, a new advanced nuclear technology development program that prioritizes projects at sites of retiring coal plants and those that include elements of workforce development. An expansion of an existing nuclear energy training program was cut from the final CHIPS Act, but the expansion is proposed again in the Nuclear Fuel Security Act of 2023.

More coordination is required among DOE, the nuclear industry, and utilities. Congress should also take action to fund initiatives authorized by recent legislation that enable the coal-to-nuclear transition.

Plan of Action

Recommendations for Federal Agencies

Recommendation 1. A sizable coordinating body, such as the Foundation for Energy Security and Innovation (FESI) or the Appalachian Regional Commission (ARC), should support the project developer’s efforts to include community engagement in the siting, planning, design, and construction process of advanced nuclear power plants. 

FESI is a new foundation to help the DOE commercialize energy technology by supporting and coordinating stakeholder groups. ARC is a partnership between the federal government and Appalachian states that supports economic development through grantmaking and conducting research on issues related to the region’s challenges. FESI and ARC are coordinating bodies that can connect disparate efforts by developers, academic experts, and the DOE through various enabling and connecting initiatives. Efforts should leverage existing resources on consent-based siting processes developed by the DOE. While these processes are specific to siting spent nuclear fuel storage facilities, the roadmap and sequencing elements can be replicated for other goals. Stage 1 of the DOE’s planning and capacity-building process focuses on building relationships with communities and stakeholders and engaging in mutual learning about the topic. FESI or ARC can establish programs and activities to support planning and capacity building by utilities and the nuclear industry.

FESI could pursue activities such as: 

• Hosting a community of practice for public engagement staff at utilities and nuclear energy companies, experts in public engagement methods design, and the Department of Energy
• Conducting activities such as stakeholder analysis, community interest surveys, and engagement to determine community needs and concerns, across all coal communities
• Providing technical assistance on community engagement methods and strategies to utilities and nuclear energy companies

ARC could conduct studies such as stakeholder analysis and community interest surveys to determine community needs and concerns across Appalachian coal communities.

Recommendation 2. The DOE should continue expanding the Nuclear Energy University Program (NEUP) to fund programs that support nontechnical nuclear research in the social sciences or law that can support community engagement, participation, and confidence in nuclear energy systems, including the navigation of the licensing required for advanced reactor deployment.

Evolving processes to include effective community engagement will require new knowledge in the social sciences and shifting the culture of nuclear education and training. Since 2009, the DOE Office of Nuclear Energy has supported nuclear energy research and equipment upgrades at U.S. colleges and universities through the NEUP. Except for a few recent examples, including the University of Wyoming project cited above, most projects funded were scientific or technical. Congress recognized the importance of supporting research in nontechnical areas by authorizing the expansion of NEUP to include nontechnical nuclear research in the CHIPS and Science Act. DOE should not wait for additional appropriations to expand this program. Further, NEUP should encourage awardees to participate in communities of practice hosted by FESI or other bodies.

Recommendation 3. The DOE Office of Energy Jobs and the Department of Labor (DOL) should collaborate on the creation and dissemination of training standards focused on the nuclear plant jobs for which extensive training, licensing, or experience is required for former coal plant workers.

Sites of former coal plants are promising candidates for advanced nuclear reactors because most job roles are directly transferable. However, an estimated 23% of nuclear plant jobs—operators, senior managers, and some technicians—require extensive licensing from the Nuclear Regulatory Commission (NRC) and direct experience in nuclear roles. It is possible that an experienced coal plant operator and an entry-level nuclear hire would require the same training path to become an NRC-licensed nuclear plant operator. 

Supporting the clean energy workforce transition fits within existing priorities for the DOE’s Office of Energy Jobs and the DOL, as expressed in the memorandum of understanding signed on June 21, 2022. Section V.C. asserts the departments share joint responsibility for “supporting the creation and expansion of high-quality and equitable workforce development programs that connect new, incumbent, and displaced workers with quality energy infrastructure and supply chain jobs.” Job transition pathways and specific training needs will become apparent through additional studies by interested parties and lessons from programs such as the Advanced Reactor Demonstration Program and the Clean Energy Demonstration Program on Current and Former Mine Land. The departments should capture and synthesize this knowledge into standards from which industry and utilities can design targeted job transition programs.

Recommendations for Congress

Recommendation 4. Congress should fully appropriate key provisions of the CHIPS and Science Act to support coal communities’ transition to nuclear energy.

• Appropriate $800 million over FY2024 to FY2027 to establish the DOE Advanced Nuclear Technologies Federal Research, Development, and Demonstration Program: The CHIPS and Science Act established this program to promote the development of advanced nuclear reactors and prioritizes projects at sites of retiring coal power plants and those that include workforce development programs. These critical workforce training programs need direct funding.

• Appropriate an additional $15 million from FY2024 to FY2025 to the NEUP: The CHIPS and Science Act authorizes an additional $15 million from FY 2023 to FY 2025 to the NEUP within the Office of Nuclear Energy, increasing the annual total amount from $30 million to $45 million. Since CHIPS included an authorization to expand the program to include nontechnical nuclear research, the expansion should come with increased funding.

Recommendation 5. Congress should expand the Nuclear Energy Graduate Traineeship Subprogram to include workforce development through community colleges, trade schools, apprenticeships, and pre-apprenticeships.

The current Traineeship Subprogram supports workforce development and advanced training through universities only. Expanding this direct funding for job training through community colleges, trade schools, and apprenticeships will support utilities’ and industries’ efforts to transition the coal workforce into advanced nuclear jobs.

Recommendation 6. Congress should amend Section 45U, the Nuclear Production Tax Credit for existing nuclear plants, to require apprenticeship requirements similar to those for future advanced nuclear plants covered under Section 45Y, the Clean Energy Production Tax Credit.

Starting in 2025, new nuclear power plant projects will be eligible for the New Clean Energy Production and Investment Tax Credits if they meet certain apprenticeship requirements. However, plants established before 2025 will not be eligible for these incentives. Congress should add apprenticeship requirements to the Nuclear Production Tax Credit so that activities at existing plants strengthen the total nuclear workforce. Credits should be awarded with priority to companies implementing apprenticeship programs designed for former coal industry workers.

Conclusion

The ambitious goal of reaching net-zero emissions globally requires the rapid deployment of clean energy technologies, in particular firm clean energy such as advanced nuclear power. Since the 1980s, communities around coal power plants have suffered from industry shifts and will continue to accumulate disadvantages without support. Coal-to-nuclear transition projects advance the nation’s decarbonization efforts while creating benefits for developers and revitalizing coal communities. Utilities, the nuclear industry, the DOE, and researchers are advancing community engagement practices and methods, but more effort is required to share best practices and ensure coordination in these emerging practices. FESI or other large coordinating bodies should fill this gap by hosting communities of practice, producing knowledge on community values and attitudes, or providing technical assistance. DOE should continue to promote community engagement research and help articulate workforce development needs. Congress should fully fund initiatives authorized by recent legislation to promote the coal to nuclear transition. Action now will ensure that our clean firm power needs are met and that coal communities benefit from the clean energy transition.

Recent crises, such as the pandemic and the Russia-Ukraine war, have led to volatile fossil fuel prices and raised national concerns about energy security. The growing frequency of blackouts across the country due to extreme weather points to an increasingly vulnerable and aging electric grid. Grid capacity right now is incapable of supporting the rapid deployment of renewable energy projects that can generate clean, reliable, domestic energy. Further, as global competition rises, the United States finds itself overly reliant on foreign manufacturing and supply chains for these very technologies we want to deploy.

In order to improve energy security, affordability, and reliability for everyday Americans, the 118th Congress should act decisively to strengthen our energy infrastructure while leveraging emerging energy technology for the energy system of the future. Below are some recommendations for action.

Transmission Lines. The current U.S. electrical grid is an aging piece of infrastructure with sluggish growth and increasing vulnerability to threats from extreme weather and foreign attacks. The 118th Congress should implement policies to revitalize domestic manufacturing and construction, strengthen national energy security and reliability, and generate new jobs and economic growth. The $83 billion worth of planned transmission projects that the ISO/RTO Board has approved or recommended is projected to add $42 billion to U.S. GDP, create more than 400,000 well-paying jobs, and boost direct local spending by nearly $40 billion. However, the rate of construction for new transmission lines must substantially increase to fully harness the new energy economy and achieve ambitious emissions reductions.

High voltage direct current (HVDC) transmission lines are particularly important for connecting renewable energy producing regions with low demand, such as the Southwest and Midwest, to high demand regions. At these distances greater than 300 miles, HVDC transmission lines transmit power with fewer losses than AC lines. HVDC lines can also avoid some of the challenges to AC transmission line development because they can be buried underground, eliminating resident concerns of visual pollution and avoiding vulnerability to extreme weather. Further, if HVDC lines are built along existing rail corridors, their construction only requires negotiation with the seven major American rail companies rather than a myriad of private landowners and federal land management agencies. Congress took an important first step to advancing HVDC technology by directing DOE to develop an HVDC moonshot initiative on cost reduction, as part of the FY 2023 omnibus bill. Now, the 118th Congress can further support this goal by working with the Federal Energy Regulatory Commission (FERC) to eliminate regulatory obstacles preventing the private sector from building more of these lines along existing corridors. Congress should also create federal tax credits to stimulate domestic manufacturing and construction of HVDC transmission, as well as transmission line construction in general. 

Manufacturing. To spur domestic manufacturing capabilities and regain competitive advantages in clean energy technologies, the 118th Congress should fund a new manufacturing-focused branch of DOE’s highly effective State Energy Program (SEP). Congress can double down on this action by scaling investments in domestic capacity to manufacture key industrial products, such as low-carbon cement and steel.

Workforce. Our nation needs a workforce equipped with the skills to build a robust energy economy. To that end, Congress could provide the Department of Energy (DOE) with $30 million annually to establish an Energy Extension System (EES). Modeled after the USDA’s Cooperative Extension System (CES), and in partnership with the DOE’s National Labs, the EES would provide technical assistance to help institutions and individuals across the country take full advantage of emerging opportunities in the energy economy, including carbon capture and storage (CCS), installation and maintenance of electric vehicle (EV) charging infrastructure, geothermal power, and more. 

Permitting Reform. In order to improve government efficiency, reduce costs, and enable the construction of new infrastructure for the clean energy transition, the 118th Congress should pass legislation on permitting reform to improve National Environmental Policy Act (NEPA) compliance timelines. These reforms should include:

• Shortening the statute of limitations on litigation under NEPA to 6 months or less in order to be more consistent with state-level policies;
• Requiring that any public-interest group bringing a case against a NEPA decision to have submitted input during public comment periods;
• Clarifying the duties of federal, state, tribal and local governments when conducting environmental reviews and communicating information to project applicants and the public;
• Clarifying vague statutes, such as the requirement that agencies consider “all reasonable alternatives”;
• Clarifying the appropriate admissibility or substitutability of documents that may reduce burdens on executive staff; and
• Permitting fast-track approval to site zero-emission fueling stations (see next section), in consultation with local utility regulators.

Zero-Emission Fueling Stations. Zero-emission vehicles powered by electric batteries and hydrogen fuel cells are the future of American auto manufacturing. The 118th Congress should pass key legislation to provide the federal government and states with the authorities and resources necessary to build a nationwide network of zero-emission fueling stations, so these new vehicles can refuel anywhere in the country. This includes:

• Amending Title 23 in the United States Code so that the federal government and states can apply gas tax dollars towards funding zero-emission fueling stations;
• Directing the Department of Transportation to use “Jason’s Law” surveys to identify medium- and heavy-duty vehicle parking locations that should be used for zero-emission fueling stations; and
• Authorizing pilot programs and public-private partnerships to develop “best practices” and techniques with key stakeholders for building out a commercially viable nationwide network of zero-emission fueling stations.

Electricity Markets. Power grids are being transformed from simple, fixed energy sources and points of demand to complex webs that feature distributed energy storage, demand response, and power quality factors. “Qualifying facilities” are a special class of small power production facilities and cogeneration facilities created by the Power Utility Regulatory Policy Act (PURPA) of 1978 with the right to sell energy or capacity to a utility and purchase services from utilities while being relieved of certain regulatory burdens. The definition of “qualifying facilities” should be expanded beyond power generation facilities to include households and businesses that provide grid services (e.g., feeding power back to the grid during times of peak energy demand). This would ensure that utilities properly compensate customers if they supply these services, thus allowing individual Americans to participate in electricity markets and spurring the adoption of novel clean-energy technologies.

Geothermal Energy. The Earth’s crust holds more than enough untapped geothermal energy to meet U.S.energy needs. Yet, only 0.4% of U.S. electricity is generated by geothermal energy. There’s a major opportunity to leverage this emerging domestic source for U.S. consumers. Congress should support the Geothermal Earthshot and drive innovation by: 

• Establishing a $2 billion risk mitigation fund for geothermal energy development within the DOE’s Office of Energy Efficiency and Renewable Energy, modeled off of successful programs in Iceland, Costa Rica, and Kenya;
• Establishing a $450 million USDA Rural Development grant program to transition industrial cooling and heating systems in the agricultural sector to geothermal energy
• Expanding the authority 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; and
• Provide $15 million for a national geothermal team within the Bureau of Land Management to develop training materials, standard operating procedures, and provide technical support to district offices to ensure timely review of geothermal power and cooling/heating projects on federal lands.

A policy memo on Empowering the Geothermal Earthshot is forthcoming from FAS.

Appropriations Recommendations

• CHIPS and Science: Research and Development in the Office of Science at the Department of EnergyA number of line items for basic science research at the Department of Energy (DOE) were authorized as part of the CHIPS and Science Act – including materials, physical, chemical, and others. These research programs are central to building a new wave of clean energy technologies and ensuring domestic energy security for decades to come. Subsections of this part of the bill include authorizations for research on nuclear energy, energy storage, carbon sequestration, and other technologies. We recommend that the Office of Science, and especially items in Section 10102 of the CHIPS and Science Act covering Basic Energy Sciences, be funded in alignment with the amounts authorized. 

• CHIPS and Science: Funding for the Office of Technology Transitions and prize authorized programs Two additional line items in the CHIPS and Science Act that were authorized but are not yet funded are sections 10713 and 10714. Both authorize prize programs housed in the Office of Technology Transitions (OTT) at the Department of Energy–programs that, if funded, could support innovation and commercialization of clean energy technology. Section 10713 authorizes an awards program for clean energy startup incubators, and section 10714 authorizes a new clean energy technology prize competition for universities. Congress should appropriate the authorized funds for these programs.In addition, Congress should appropriate funds authorized in section 10715 of the CHIPS and Science Act. This section authorizes $3 million per year through FY 2027 for coordination capacity at OTT, including to develop metrics for the impact of OTT programs and to engage more effectively with the clean energy ecosystem. Additional capacity for OTT is critical to the office’s success, and to the development of clean energy technologies more broadly.

• IIJA: Funding for the Critical Minerals Mining and Recycling Grant Program in the DOECritical minerals are crucial for clean energy and semiconductor technologies. The U.S. lacks a sufficient domestic supply of critical minerals and is currently overly reliant on foreign critical minerals, which have volatile prices and are often controlled by adversarial countries. The Infrastructure Investment and Jobs Act (IIJA) authorized $100 million from FY 2022 to FY 2024 for the DOE Critical Minerals Mining and Recycling Grant Program to fund pilot projects that process, recycle, or develop critical minerals. This program is not limited to critical minerals for lithium-ion battery production, and has the potential to impact critical minerals used in a variety of clean energy and semiconductor technologies. Congress should appropriate the authorized funds for this program, since it fills the pre-commercialization funding gap for scaling these technologies that is not met by other programs in the IIJA.
• FY 2024: Research and Development in the DOE’s Office of Energy Efficiency and Renewable Energy (EERE) and the Advanced Research Project Agency for Energy (ARPA-E)
  These two offices are key investors in clean energy technologies at different stages of research and commercialization and provide a direct way for the government to scale up American-made energy technologies. To accelerate the energy transition, Congress should provide robust increases for these offices, and at least meet EERE and ARPA-E’s FY 2024 budget requests, such that they can scale up their proven ability of identifying and supporting promising candidates for energy innovation.

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.

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.

Summary

The Biden Administration has committed the United States to a 50–52% reduction of greenhouse gas emissions from 2005 levels by 2030 and to net-zero emissions by 2050. To achieve these goals, the U.S. must rapidly increase renewable-energy production while simultaneously building the transmission capacity needed to carry power generated from new renewable sources. Such an investment requires transforming the American electricity grid at a never-before-seen speed and scale; for example, a recent study estimates that a 60% increase in transmission capacity will be required. One way to achieve this ambitious transmission target is to create a national High Voltage Direct Current (HVDC) transmission network overlaid atop the existing alternating current (AC) grid. In addition to advancing America’s climate goals, such an effort would spur economic development in rural areas, improve the grid’s energy efficiency, and bolster grid stability and security. This memo proposes several policy options to incentivize private-sector efforts to construct a national HVDC transmission network while avoiding environmental and eminent-domain concerns that have doomed previous HVDC projects. Options range from modest and easily implemented rule changes by federal agencies to more ambitious Congressional actions.

Challenge and Opportunity

The current American electricity grid resembles the American highway system before the Eisenhower interstate system. Just as paved one or two-lane roads extended to nearly every community by the early 1950s, very few areas are unelectrified today. However, the AC power lines that crisscross the nation today are tangled, congested, and ill-suited to quickly move large amounts of renewable power from energy-producing regions with low demand (such as the Midwest and Southwest) directly to large population centers where demand is highest. Since HVDC transmission lines lose less power than AC lines at distances over 300 miles, HVDC technology is the best candidate to connect the renewable generation required to achieve net-zero emissions by 2050 with power consumers.

There is a dearth of HVDC lines in the United States today, and the few that do exist are scattered across the country and were not designed to facilitate renewable development. In other words, the U.S. is a long way away from the integrated nationwide HVDC network needed to achieve net-zero emissions. Recent attempts by the private sector to begin building long-distance HVDC transmission lines between renewable producing regions and consumers — such as Clean Line Energy’s proposal for an aboveground line that would have linked much of the Great Plains to the Southeast — have been unsuccessful due to a host of challenges. These challenges included negotiating leases with thousands of landowners with understandable concerns about how the project could alter their properties, mounting an effective legal defense of the company’s use of Section 1222 of the Energy Policy Act of 2005 (which allows developers to assume the federal government’s power of eminent domain for large-scale transmission projects if leases cannot be agreed upon), negotiating with many local and state jurisdictions to secure project approval, and maintaining investor confidence throughout the complex and time-consuming permitting and leasing process. However, a new generation of private developers has proposed an innovative solution that bypasses these challenges: the construction of an underground nationwide HVDC network alongside existing rail corridors. Unlike aboveground transmission built through a mosaic of property owners’ holdings, this solution requires negotiation with only the seven major American rail companies, takes advantage of the proximity of these already-disturbed corridors to many areas with high renewable-energy potential (Figure 1), does not add visual pollution to the aboveground landscape, and would likely not require the use of Section 1222 to justify eminent domain. 

In addition to the political considerations discussed above, several recent advances in HVDC technology have driven costs low enough to make HVDC installation cost-competitive with installing high voltage alternating current (HVAC) lines (see FAQ for more details). As a result, incentivizing HVDC makes sense from perspectives beyond addressing climate change. The U.S. electric grid must be modernized to address pressing challenges beyond climate, such as the need for improved grid reliability and stability. Unlike AC transmission, HVDC transmission can maintain consistent power, voltage, and frequency, making it a promising way to support the large-scale incorporation of renewable sources into our nation’s energy mix while simultaneously bolstering grid stability and efficiency and spurring rural economic growth.

A nationwide HVDC network would also increase grid stability by connecting the four large interconnections that make up the shared American and Canadian power grid (Figure 2). Currently, the two largest of these interconnections — the Eastern and Western interconnections — manage 700 and 250 GW of electricity respectively. Yet, these interconnections are connected by transfer stations with a capacity of only about 1 GW. A recent study led by NREL researcher Aaron Bloom modeled the economics of building a nationwide HVDC macrogrid that would tie the Eastern and Western interconnections together. The study concluded that such an investment would have a net benefit-to-cost ratio of 1.36 due to the possible ability for a nationwide HVDC grid to (i) shuttle renewable energy across the country as different power sources begin and end generation capabilities each day, and (ii) respond more nimbly to power outages in regions affected by natural disasters. 

Minneapolis-based Direct Connect, with financial backing from a mixture of American and international investors, has begun the permitting process for SOO Green, the first underground HVDC project co-located with rail lines. SOO Green will run from the Iowa countryside to the Chicago metropolitan area. Although this distance is geographically short, it is significant in terms of the connectivity it will provide. The line will link the Midwest (MISO) and PJM Independent System Operators (ISOs), two of the nine regional bodies that manage much of the United States’ grid. The combined territory of the MISO and PJM ISOs stretches from the wind-rich Great Plains to demand centers like Philadelphia, the New York suburbs, and Washington, D.C. Facilitating HVDC transmission in this territory will allow renewable power to be efficiently funneled from regions that produce lots of energy to regions that need it. 

By providing a market for wind power in the energy-consuming PJM territory, the SOO Green proposal has already begun to generate interest in expanded renewable development in the wind-rich MISO territory. Direct Connect estimates that the SOO Green HVDC link will spur $1.5 billion of new renewable-energy development, create $2.2 billion of economic output in Iowa and Illinois, and create thousands of construction, operation, and maintenance jobs. 

SOO Green’s construction specifications, operational plan, and anticipated profit margin are near-ideal for an underground rail co-located HVDC project. The planned route crosses only two states, relies on a low-use railway, lies atop an area with well-characterized geology, and connects the energy-producing Midwest with the energy-consuming Mid-Atlantic. But despite these favorable conditions, SOO Green’s attempts to gain approval have been handicapped by outdated utility regulations. Direct Connect’s efforts have shown that even proposals with optimal conditions confront difficult permitting pathways. As a result, scaling underground co-located HVDC rapidly enough to achieve the transmission required for net-zero emissions in 2050 requires federal action to make these types of lines a more attractive proposition. The policy options outlined below would encourage other privately backed HVDC projects with the potential to boost rural economies while advancing climate action. 

Plan of Action

The following policy recommendations would accelerate the development of a national HVDC network by stimulating privately backed construction of underground HVDC transmission lines located alongside existing rail corridors. Recommendations one and two are easily actionable rule changes that can be enacted by the Federal Energy Regulatory Commission (FERC) under existing authority. Recommendation three proposes a more long-term collaborative effort by the Department of Energy (DOE) and FERC to accelerate nationwide HVDC transmission siting and permitting. Recommendation four is a more ambitious proposal requiring Congressional action. 

Recommendation 1. FERC should amend its rules governing how ISOs review new merchant transmission projects. 

New merchant transmission projects (transmission lines developed by private companies and not by rate-regulated utilities) and generation projects are often reviewed by ISOs as part of a single interconnection process. In SOO Green’s case, the PJM ISO is backlogged in its reviews due to the high volume of new renewable-generation project proposals. This creates a vicious cycle holding back the clean-energy sector: a delayed review of the transmission capabilities required by new renewable-generation projects ultimately chills the market for generation projects as well. FERC should therefore issue a rule that requires PJM and other ISOs to review new renewable generation and new transmission projects on separate tracks. 

Recommendation 2. FERC should exempt HVDC transmission projects from external-capacity rules developed for less controllable AC transmission projects. 

Under current rules set by the PJM ISO, energy generated outside of the PJM service area can participate in PJM’s energy marketplace only if grid operators can directly dispatch that energy. Due to the diffuse nature of renewable-energy generation, it is impossible for PJM operators to dispatch specific renewable-generation projects. In October 2021, SOO Green filed a complaint to FERC alleging that the PJM ISO’s external-capacity rules were designed to manage older, less diffuse generation resources — and that these rules need to be updated to allow the technological advantages of HVDC transmission (e.g., the capacity to schedule current flow at pre-agreed upon times and flows along HVDC transmission lines) to benefit PJM customers. FERC should exempt HVDC transmission projects from such rules as ISOs like PJM develop new external-capacity rules better suited to diffuse generation. 

Recommendation 3. FERC and DOE should adopt a collaborative strategy to identify mutually agreeable routes for new rail co-located HVDC transmission. 

Previous attempts by Congress to establish greater federal power over transmission siting and permitting have revolved around the DOE’s authority to designate some counties as National Interest Electric Transmission Corridors (NIETCs). NIETCs are regions that DOE identifies as being particularly prone to grid congestion or transmission-capacity constraints. The creation of NIETCs was authorized by the Federal Power Act (Sec. 216), which also grants FERC the authority to supersede states’ permitting and siting decisions if the rejected transmission project is in a NIETC and meets certain conditions (including benefits to consumers (even those in other states), enhancement of energy independence, or if the project is “consistent with the public interest”). This “backstop” authority was created by the Energy Policy Act of 2005 and was recently reformed in 2021’s Infrastructure Investment and Jobs Act. Although it is a laudable attempt to spur transmission investment, the revised authority in its current form is unlikely to lead to the sudden acceleration of transmission siting and permitting necessary to achieve the Biden Administration’s climate goals. This is because NIETC designation, as well as any FERC action under Section 216, (i) trigger the development of environmental impact statements under the National Environmental Policy Act (NEPA), and (ii) would likely engender strong political opposition by states and landowners whose properties would be part of proposed routes but would not receive any benefits from transmission investments. 

Instead of relying solely on this top-down approach, DOE and FERC should adopt a collaborative strategy wherein they work with state governments, the Class 1 railways, utilities, and interested transmission developers to plan and permit future HVDC transmission, including rail co-located projects. This approach, in keeping with the spirit of the Building a Better Grid Initiative, would decrease the possibility of political opposition — especially if rail co-located HVDC is emphasized due to its relatively small number of stakeholders and focus on already disturbed corridors. In addition, if mutually agreed corridors can be negotiated, this collaborative approach would render the lengthy NEPA reviews required for NIETC designation and FERC precedence unnecessary (although NEPA reviews may still be required if federal agencies are involved in the agreed-upon projects in other ways. See FAQ for more information). 

Recommendation 4. Create federal tax credits to stimulate domestic manufacturing and construction of HVDC transmission, including HVDC lines along rail corridors. 

Congress should create two federal investment tax credits (ITCs) to stimulate a market for American HVDC lines. One tax credit should be directed to American manufacturers of cross-linked polyethylene (XLPE) which serves as the liner for HVDC cables. Such an incentive would help ensure a reliable, predictably priced domestic supply of this essential material. The second tax credit should be directed to HVDC line developers and should be modeled on an existing tax credit authorized by the Energy Policy Act of 2005 (26 U.S.C. § 48) for renewable-generation projects. A tax credit for HVDC line developers was previously introduced by Sen. Martin Heinrich (D-NM) as part of 2019’s Electric Power Infrastructure Improvement Act. After stalling in the Senate Finance Committee, this bill was re-introduced in 2021 in both the House and Senate, then incorporated into President Biden’s Build Back Better Plan. The HVDC provisions of Build Back Better should be included in House and Senate Democrats’ attempts to revive the legislation during the summer of 2022. If negotiations are unsuccessful this summer, the HVDC provisions should be re-introduced via a stand-alone bill framed as a logical expansion of the renewable-generation tax credits enacted with broad bipartisan support in the Energy Policy Act of 2005. This strategy would separate HVDC tax credits from partisan feuding over Build Back Better and would draw greater attention to HVDC’s ability to simultaneously foster rural economic development and speed much-needed decarbonization efforts. 

Conclusion

A significant increase in transmission capacity is needed to meet the Biden Administration’s efforts to achieve net-zero emissions by 2050. Creating a nationwide HVDC transmission network would not only greatly aid the United States’ efforts to address climate change — it would also improve grid stability and provide sustained economic development in rural areas across the country. Minneapolis-based Direct Connect’s SOO Green project to construct HVDC transmission alongside existing rail corridors is an example of an innovative solution to legitimate stakeholder concerns over environmental impacts and the use of eminent domain —concerns that have plagued previous failed efforts to construct long-distance HVDC transmission. The federal government can stimulate private development of this publicly beneficial infrastructure via simple rule changes at FERC, embracing a collaborative strategy to site and permit new transmission infrastructure, and by passing new HVDC transmission-specific tax credits modeled after existing credits.

Summary

The Biden-Harris Administration has made revitalization of U.S. manufacturing a key pillar of its economic and climate strategies. On the campaign trail, President Biden pledged to do away with “invent it here, make it there,” alluding to the long-standing trend of outsourcing manufacturing capacity for critical technologies — ranging from semiconductors to solar panels —that emerged from U.S. government labs and funding. As China and other countries make major bets on the clean energy industries of the future, it has become clear that climate action and U.S. manufacturing competitiveness are deeply intertwined and require a coordinated strategy.

Additional legislative action, such as proposals in the Build Back Better Act that passed the House in 2021, will be necessary to fully execute a comprehensive manufacturing agenda that includes clean energy and industrial products, like low-carbon cement and steel. However, the Department of Energy (DOE) can leverage existing authorities and assets to make substantial progress today to strengthen the clean energy manufacturing base. 

This memo recommends two sets of DOE actions to secure domestic manufacturing of clean technologies:

1. Foundational steps to successfully implement the new Determination of Exceptional Circumstances (DEC) issued in 2021 under the Bayh-Dole Act to promote domestic manufacturing of clean energy technologies.
2. Complementary U.S.-based manufacturing investments to maximize the DEC’s impact and to maximize the overall domestic benefits of DOE’s clean energy innovation programs.

Challenge and Opportunity

Recent years have been marked by growing societal inequality, a pandemic, and climate change-driven extreme weather. These factors have exposed the weaknesses of essential supply chains and our nation’s legacy energy system. 

Meanwhile, once a reliable source of supply chain security and economic mobility, U.S. manufacturing is at a crossroads. Since the early 2000s, U.S. manufacturing productivity has stagnated and five million jobs have been lost. While countries like Germany and South Korea have been doubling down on industrial innovation — in ways that have yielded a strong manufacturing job recovery since the Great Recession — the United States has only recently begun to recognize domestic manufacturing as a crucial part of a holistic innovation ecosystem. Our nation’s longstanding, myopic focus on basic technological research and development (R&D) has contributed to the American share of global manufacturing declining by 10 percentage points, and left U.S. manufacturers unprepared to scale up new innovations and compete in critical sectors long-term.

The Biden-Harris administration has sought to reverse these trends with a new industrial strategy for the 21^st century, one that includes a focus on the industries that will enable us to tackle our most pressing global challenge and opportunity: climate change. This strategy recognizes that the United States has yet to foster a robust manufacturing base for many of the key products —ranging from solar modules to lithium-ion batteries to low-carbon steel — that will dominate a clean energy economy, despite having funded a large share of the early and applied research into underlying technologies. The strategy also recognizes that as clean energy technologies become increasingly foreign-produced, risks increase for U.S. climate action, national security, and our ability to capture the economic benefits of the clean energy transition. 

The U.S. Department of Energy (DOE) has a central role to play in executing the administration’s strategy. The Obama administration dramatically ramped up funding for DOE’s Advanced Manufacturing Office (AMO) and launched the Manufacturing USA network, which now includes seven DOE-sponsored institutes that focus on cross-cutting research priorities in collaboration with manufacturers. In 2021, DOE issued a Determination of Exceptional Circumstances (DEC) under the Bayh-Dole Act of 1980¹ to ensure that federally funded technologies reach the market and deliver benefits to American taxpayers through substantial domestic manufacturing. The DEC cites global competition and supply chain security issues around clean energy manufacturing as justification for raising manufacturing requirements from typical Bayh-Dole “U.S. Preference” rules to stronger “U.S. Competitiveness” rules across DOE’s entire science and energy portfolio (i.e., programs overseen by the Under Secretary for Science and Innovation (S4)). This change requires DOE-funded subject inventions to be substantially manufactured in the United States for all global use and sales (not just U.S. sales) and expands applicability of the manufacturing requirement to the patent recipient as well as to all assignees and licensees. Notably, the DEC does allow recipients or licensees to apply for waivers or modifications if they can demonstrate that it is too challenging to develop a U.S. supply chain for a particular product or technology.

The DEC is designed to maximize return on investment for taxpayer-funded innovation: the same goal that drives all technology transfer and commercialization efforts. However, to successfully strengthen U.S. manufacturing, create quality jobs, and promote global competitiveness and national security, DOE will need to pilot new evaluation processes and data reporting frameworks to better assess downstream impacts of the 2021 DEC and similar policies, and to ensure they are implemented in a manner that strengthens manufacturing without slowing technology transfer. It is essential that DOE develop an evidence base to assess a common critique of the DEC: that it reduces appetite for companies and investors to engage in funding agreements. Continuous evaluation can enable DOE to understand how well-founded these concerns are.

Yet, the new DEC rules and requirements alone cannot overcome the structural barriers to domestic commercialization that clean energy companies face today. DOE will also need to systematically build domestic manufacturing efforts into basic and applied R&D, demonstration projects, and cross-cutting initiatives. DOE should also pursue complementary investments to ensure that licensees of federally funded clean energy technologies are able and eager to manufacture in the United States. Under existing authorities, such efforts can include: 

• Elevating and empowering AMO and Manufacturing USA to build a competitive U.S. workforce and regional infrastructure for clean energy technologies.
• Directly investing in domestic manufacturing capacity through DOE’s Loan Programs Office and through new authorities granted under the Bipartisan Infrastructure Law.
• Market creation through targeted clean energy procurement.
• Coordination with place-based and justice strategies. 

These complementary efforts will enable DOE to generate more productive outcomes from its 2021 DEC, reduce the need for waivers, and strengthen the U.S. clean manufacturing base. In other words, rather than just slow the flow of innovation overseas without presenting an alternative, they provide a domestic outlet for that flow. Figure 1 provides an illustration of the federal ecosystem of programs, DOE and otherwise, that complement the mission of the DEC.

Figure 1

Programs are arranged in rough accordance to their role in the innovation cycle. TRL and MRL refer to technology and manufacturing readiness level, respectively. Proposed programs, highlighted with a dotted yellow border, are either found in the Build Back Better Act passed by the House in 2021 or the Bipartisan Innovation Bill (USICA/America COMPETES)

Figure 1Programs are arranged in rough accordance to their role in the innovation cycle. TRL and MRL refer to technology and manufacturing readiness level, respectively. Proposed programs, highlighted with a dotted yellow border, are either found in the Build Back Better Act passed by the House in 2021 or the Bipartisan Innovation Bill (USICA/America COMPETES).

Plan of Action

While further Congressional action will be necessary to fully execute a long-term national clean manufacturing strategy and ramp up domestic capacity in critical sectors, DOE can meaningfully advance such a strategy now through both long-standing authorities and recently authorized programs. The following plan of action consists of (1) foundational steps to successfully implement the DEC, and (2) complementary efforts to ensure that licensees of federally funded clean energy technologies are able and eager to manufacture in the United States. In tandem, these recommendations can maximize impact and benefits of the DEC for American companies, workers, and citizens.

Part 1: DEC Implementation

The following action items, many of which are already underway, are focused on basic DEC implementation.

• Develop and socialize a draft reporting and data collection framework. The Office of the Under Secretary for Science and Innovation should work closely with DOE’s General Counsel and individual program offices to develop a reporting and data collection framework for the DEC. Key metrics for the framework should be informed by the Science and Innovation (S4) mission, and capture broader societal benefits (e.g., job creation). DOE should target completion of a draft framework by the end of 2022, with plans to socialize, pilot, and finalize the framework in consultation with the S4 programs and key external stakeholders.
• Identify pilots for the new data reporting framework in up to five Science and Innovation programs. Since the DEC issuance, Science and Innovation (S4) funding opportunity announcements (FOAs) have been required to include a section on “U.S. Manufacturing Commitments” that states the requirements of the U.S. Competitiveness Provision. FOAs also include a section on “Subject Invention Utilization Reporting,” though the reporting listed is subject to program discretion. By early 2023, DOE should identify up to five program offices in which to pilot the data reporting framework referenced above. The Office of the Under Secretary for Science and Innovation (S4) should also consider coordinating with the Office of the Under Secretary for Infrastructure (S3) to pilot the framework in the Office of Clean Energy Demonstrations. Pilot programs should build in opportunities for external feedback and continuous evaluation to ensure that the reporting framework is adequately capturing the effects of the DEC.
• Set up a DEC implementation task force. The DEC requires quarterly reporting from program offices to the Under Secretary for Science and Innovation. The Under Secretary’s office should convene a task force — comprising representatives from the Office of Technology Transitions (OTT), the General Counsel’s office (GC), the Office of Manufacturing and Energy Supply Chains, and each of DOE’s major R&D programs — to track these reports. The task force should meet at least quarterly, and its findings should be transmitted to the DOE GC to monitor DEC implementation, troubleshoot compliance issues, and identify challenges for funding recipients and other stakeholders. From an administrative standpoint, these activities could be conducted under the Technology Transfer Policy Board.
• Incorporate domestic manufacturing objectives into all technology-specific roadmaps and initiatives, including the Earthshots. DOE and the National Labs regularly track the development and future potential of key clean energy technologies through analysis (e.g., the National Renewable Energy Laboratory (NREL)’s Future Studies). DOE also has developed high-profile cross-cutting initiatives, such as the Grid Modernization Initiative and the “Earthshots” initiative series, aimed at achieving bold technology targets. OTT, in concert with the Office of Policy and individual program offices, should incorporate domestic manufacturing into all technology-specific roadmaps and cross-cutting initiatives. Specifically, technology-specific roadmaps and initiatives should (i) assess the current state of U.S. manufacturing for that technology, and (ii) identify key steps needed to promote robust U.S. manufacturing capabilities for that technology. ARPA-E (which has traditionally included manufacturing in its technology targets and been subject to a DEC since 2013)and the supply chain recommendations in the Energy Storage Grand Challenge Roadmap may provide helpful models.
• Support the White House and NIST on the iEdison rebuild. The National Institute of Standards and Technology (NIST) is currently revamping the iEdison tool for reporting federally funded inventions. The coincident timing of this effort with the DOE’s DEC creates an opportunity to align data and waiver processes across government. DOE should work closely with NIST to understand new features being developed in the iEdison rebuild, offer input on manufacturing data collection, and align DOE reporting requirements where appropriate. Data reported through iEdison will help DOE evaluate the success of the DEC and identify areas in need of support. For instance, if iEdison data shows that a certain component for batteries becomes an increasing source of DEC waivers, DOE and the Department of Commerce may respond with targeted actions to remedy this gap in the domestic battery supply chain. Under the pending Bipartisan Innovation Bill, the Department of Commerce could receive funding for a new supply-chain monitoring program to support these efforts, as well as $45 billion in grants and loans to finance supply chain resilience. iEdison data could also be used to justify Congressional approval of new DOE authorities to strengthen domestic manufacturing.

Part 2: Complementary Investments

Investments to support the domestic manufacturing sector and regional innovation infrastructure must be pursued in tandem with the DEC to translate into enhanced clean manufacturing competitiveness. The following actions are intended to reduce the need for waivers, shore up supply chains, and expand opportunities for domestic manufacturing:

• Elevate and empower DOE’s AMO to serve as the hub of U.S. clean manufacturing strategy. Under the Obama administration, recognition that the U.S. was underinvesting in manufacturing innovation led to a dramatic expansion of the Advanced Manufacturing Office (AMO) and the launch of the Manufacturing USA institutes, modeled on Germany’s Fraunhofer institutes. DOE has begun to add a seventh institute focused on industrial decarbonization to the six institutes it already manages, and requested funding to launch an eighth and ninth institute in FY22. While both AMO and Manufacturing USA have proven successful through an array of industry-university-government partnerships, technical assistance, and cooperative R&D, neither are fully empowered to serve as hubs for U.S. clean manufacturing strategy. AMO currently faces bifurcated demands to implement advanced manufacturing practices (cross-sector) and promote competitiveness in emerging clean industries (sector-specific). The Manufacturing USA institutes have also been limited by their narrow, often siloed mandates and the expectation of financial independence after five years; under the Trump Administration, DOE sought to wind down the institutes rather than pursue additional funding. DOE should reinvest in establishing AMO and the institutes as the “tip of the spear” for a domestic clean manufacturing strategy and seek to empower them in four ways: 
• Institutional structure. AMO should be elevated to the Deputy Under Secretary or Assistant Secretary level, as has been recommended by recent DOE Chief of Staff Tarak Shah in a 2019 report, the House Select Committee on the Climate Crisis, the National Academies, and many others. This combination of enhanced funding and authority would empower DOE to pursue a more holistic clean manufacturing strategy, commensurate with the scale of the climate and industrial challenges we face.
• Mission focus. It is critical that AMO continue to work on both advanced manufacturing practices (cross-sector) and competitiveness in emerging clean energy industries (sector-specific), but this bifurcated mission does present challenges. As alluded to in a January 2022 RFI, AMO is attempting to pursue both goals in tandem. With the structural elevation proposed above, there is an opportunity for AMO’s clean energy manufacturing mission to be clarified, with a subset of staff and programs specifically dedicated to competitiveness in these emerging sectors. 
• Regional infrastructure and workforce development. AMO’s authority already extends beyond applied R&D, providing technical assistance, workforce development, and more. The Manufacturing USA institutes provide regional support for early prototyping efforts, officially operating up to Technology Readiness Level (TRL) 7. However, these programs should be granted greater authority and budget to foster regional demonstration and workforce development centers for low-carbon and critical clean energy manufacturing technologies. These activities create the infrastructure for constant learning that is necessary to entice manufacturers to remain in the U.S. and reduce the need for waivers, even when foreign manufacturers present cost advantages. To start, DOE should establish a regional demonstration and workforce development facility operated by the new clean manufacturing institute for industrial decarbonization (similar in nature to Oak Ridge’s Manufacturing Demonstration Facility (MDF)) to accelerate domestic technology transfer of clean manufacturing practices, and consider additional demonstration and workforce development facilities at future institutes.
• Scale. Despite accounting for roughly one-third of U.S. greenhouse gas emissions and 11% of GDP, manufacturing receives less than 10% of DOE energy innovation funding. Additionally, the Manufacturing USA institutes have roughly one-fourth of the budget, one-fifth of the institutes, and one-hundredth of the employees of the Fraunhofer institutes in Germany, a much smaller country that has nevertheless managed to outpace the United States in manufacturing output. To align with climate targets and the administration’s goal to quadruple innovation budgets, DOE manufacturing RD&D would need to grow to roughly $2 billion by 2025.
• Deploy at least $20 billion in grants, loans, and loan guarantees to support solar, wind, battery, and electric vehicle manufacturing and recycling by 2027. Not only is financial support to expand domestic clean manufacturing capacity critical for energy security, innovation clusters, and economic development, but it can also alleviate the barriers for innovators to manufacture in the U.S. and reduce the need for DEC waivers. Existing DOE authorities include the $7 billion for battery manufacturing provided in the Bipartisan Infrastructure Law and $17 billion in existing direct loan authority at the Loan Programs Office’s Advanced Technology Vehicles Manufacturing unit. DOE’s technology roadmaps can help these programs to be coordinated with earlier stage RD&D efforts by anticipating emerging manufacturing needs, so that S4 funding recipients who are subject to U.S. manufacturing requirements have more confidence in their ability to find ample domestic manufacturing capacity. The same entities that receive R&D funds also should be eligible for follow-on manufacturing incentives. The pending Bipartisan Innovation Bill and Build Back Better Act may also provide $3 billion for solar manufacturing, renewal of the 48C advanced manufacturing investment tax credit, and a new advanced manufacturing production tax credit. While these funding mechanisms have already been identified in response to the battery supply chain review, they should be applied beyond the battery sector. 
• Leverage DOE procurement authority and state block grant programs to drive demand for American-made clean energy. Procurement is a key demand-pull lever in any coordinated industrial strategy, and can reinforce the DEC by assuring potential applicants that American-made clean energy products will be rewarded in government purchasing. This administration’s Executive Order (EO) on federal sustainability calls for 100% carbon-free electricity by 2030 and “net-zero emissions from overall federal operations by 2050, including a 65 percent emissions reduction by 2030.” The Federal Energy Management Program (FEMP), noted in the EO and the federal government’s accompanying sustainability plan as one of the hubs of clean-energy procurement expertise, will play a key role in providing technical support and progress measurement for all government agencies as they pursue these goals, including by helping agencies to identify U.S. suppliers. For instance, in response to the battery supply chain review, FEMP was tasked with conducting a diagnostic on stationary battery storage at federal sites. DOE also delivers substantial funding and technical assistance to help states and localities deploy clean energy through the Weatherization Assistance Program and State Energy Program. These programs are now consolidated under a new Under Secretary for Infrastructure. DOE should build on these efforts by leveraging DOE’s multi-billion dollar state block grant and competitive financial assistance programs, including the recently-authorized State Manufacturing Leadership grants, to support states and communities in planning to strengthen local and regional manufacturing capacity to make progress on sustainability targets (see Updating the State Energy Program to Promote Regional Manufacturing and Economic Revitalization).
• Align the above activities with DOE’s place-based strategies for advancing environmental justice and supporting fossil fuel-centered communities in their clean energy transition. Throughout U.S. history, manufacturing has fostered rich local cultures and strong regional economies. Domestic manufacturing of clean energy technologies and clean industrial materials represents a major opportunity for economic revitalization, job growth, and pollution reduction. DOE also has a major role in executing President Biden’s environmental justice agenda, including as chair of the Interagency Working Group (IWG) on Coal and Power Plant Communities. As noted in the IWG’s initial report, investments in manufacturing have the potential to provide pollution relief to frontline communities and also retain the U.S. industrial workforce from high-carbon industries. Indeed, this is one reason why NIST’s Manufacturing Extension Partnerships played a significant role in the POWER Initiative under the Obama administration. The domestic clean energy manufacturing investments detailed above — including expansion of AMO, new grant programs, and procurement —should all be executed in close coordination with DOE’s place-based strategies to deliver benefits for environmental justice and legacy energy communities and to foster regional cultures of innovation. Finally, DOE should coordinate with other regional development efforts across government, such as the EDA’s Build Back Better Regional Challenge and USDA’s Rural Development programs.

Renewable energy technologies, such as advanced biofuels for transportation, are key for U.S. efforts to mitigate climate change

Climate change is bringing about rising temperatures, which have significant negative impacts on humans and the environment, and transitioning to renewable energy sources, such as biofuels, can help meet this challenge. One consequence of higher global temperatures is the increasing frequency of extreme weather events that cause massive amounts of harm and damage. As depicted in Figure 1, six of the 10 costliest extreme weather events in the U.S. have occurred in the last 10 years, amounting to over $411 billion in damages (in 2020 dollars and adjusted for inflation). The other four occurred between 2004 and 2008, and the costs of future extreme weather events are expected to keep climbing.

Figure 1

U.S. extreme weather events from 2000 to 2020 resulting in at least $1 billion in damages. Figure adapted from an interactive Center for Climate and Energy Solutions tool.

Moreover, the World Health Organization estimates that, globally, climate change is responsible for over 150,000 deaths per year. This is because in addition to extreme weather events, climate change contributes to the spread of diseases, reduced food production, and many other problems.

Transitioning to renewable energy, and reducing reliance on fossil fuels, is one way to help slow down the effects of climate change. While renewables used to be a more expensive option, new clean energy technologies are lowering costs and helping to move economies away from fossil fuels. For example, solar panel prices decreased 75 to 80 percent between 2009 and 2015. Due to similar trends in other renewables like wind and hydropower, renewable energy generation technology accounts for over half of all new power generation capacity brought online worldwide every year since 2011.

More must be done to ensure that renewable energy technologies are key contributors to the mitigation of climate change. As of 2018, solar and wind accounted for less than 4% of all the energy used in the U.S. (Figure 2). The amount of energy generated by solar panels has increased almost 46-fold since 2008, but still only amounts to about 1% of the total energy generated in the country. Unfortunately, renewables currently provide only a small fraction of the total energy produced, and to counter climate change, this contribution must drastically increase.

Figure 2

Sources of energy used in the U.S. during the year 2000 and the year 2018. Figure reproduced from DeSilver 2020, Pew Research Center.

Nonrenewable sources are still frequently used because they are very dense in energy. In the transportation sector, for example, gas or diesel fuels have about 40 times more energy, pound for pound, than the leading electric battery technologies. In order for an electric car to travel 360 miles, which is the average distance traveled on a full 12.4 gallon tank of gas, the car would need a battery weighing over 1,300 pounds.

To reduce reliance on petroleum-based fuels, particularly for heavy-duty vehicles and airplanes, one potential solution is biofuels. Biofuels are produced by breaking down plant material and converting it into usable fuels, such as ethanol or biodiesel. Corn ethanol is already added to gas to cut down on greenhouse gas emissions. However, creating ethanol is not a zero-carbon process, and supplementing with corn ethanol averages just under 40 percent lower carbon emissions than using only gasoline. Corn ethanol also relies on land which could be used for growing other food crops. Researchers are currently studying how to use invasive plants, as well as plants that require little water, fertilizer, or land to grow, to create the next generation of biofuels. Some promising plant feedstock options include hemp, switchgrass, carrizo cane, jatropha shrubs, and algae. New biotechnologies are also being studied to develop more efficient ways to break down biomass into sugars, which microbes then convert into biofuels. There is also ongoing research to create microbes that can directly convert plants to biofuels, and to enable microbes to produce long-chain, energy-dense hydrocarbons that could be used to fuel heavy-duty vehicles and airplanes.

The Information Technology and Innovation Foundation developed several recommendations which could bolster the implementation of biofuels. These recommendations include:

• Increasing investments in bioenergy and biomanufacturing research and development by 150 percent by the next five years;
• Engaging the Department of Energy and the Department of Agriculture to support the development of biofuels for aviation, shipping, and “other hard-to-electrify transportation sectors;” and
• Expanding research into gene-editing tools that can be used to improve biomass processing, increasing the diversity of plant feedstocks that could be leveraged for lower-cost biofuel production.

By improving the efficiency of renewable energy technologies like biofuels, wind, and solar, and further innovating in the renewables space, the U.S. science and technology community can help ensure that renewables are leveraged in the effort to counter the climate crisis.

This CSPI Science and Technology Policy Deep Dive expands upon a scientific exchange between Congressman Bill Foster (D, IL-11) and his new FAS-organized Science Council.

Grid modernization should be a major part of a national infrastructure-investment initiative. Effectively and efficiently modernizing the U.S. electric grid requires rapid deployment of innovative grid technologies. The next administration should establish a Grid Resilience Innovation Demonstration (GRID) Network, run in partnership between the Department of Energy (DOE) and the Department of Defense (DoD), to test and accelerate deployment of such technologies. The GRID Network would integrate and build on existing microgrids on federal installations and other relevant facilities, resulting in a group of geographically distributed test beds that can be managed and operated as a national user facility. The distributed nature of the network would allow test beds to ensure that solutions are compatible with a variety of grid technologies and operational structures and would also insulate the network from security threats, and other risks. Prioritizing establishment of the GRID Network early in the next administration will enable our nation to quickly realize the benefits of a modern electric grid, including enhanced resilience to natural disasters, entrepreneurship opportunities, and job growth. Failure to act will leave our national grid vulnerable to hostile actors, rob the country of needed shovel-ready construction projects and manufacturing jobs, and undermine U.S. leadership in electric sector innovation and the resulting impacts to our economy.

Challenge and Opportunity

The U.S. electric grid is a critical backbone of our nation’s economy, national security, health, and social interactions. Yet the current grid is ill-suited to modern demands. Our nation’s grid contains many critical components that were originally constructed in the early 20th century. The grid as a whole is based on an outdated structure that was not designed for today’s varying power demand requirements, such as for the internet data centers, or for the widescale integration of intermittent sources of electricity such as wind turbines and solar panels. The grid is also poorly equipped to withstand the many cyber, physical, and electromagnetic threats that exist today. 

These problems can cause extensive and expensive blackouts, such as the widespread outages across the Northeast in 2003 that cost $6 billion in damages. The possibility of foreign interference presents a threat multiplier. In 2015, a Russian assault on the Ukrainian grid cut power for six hours in the dead of winter. A similar attack on the U.S. grid is possible. In fact, the same malware the triggered the Ukraine attack has been found in US-based critical infrastructure facilities. 

There is a clear need to make the U.S. electric grid much more secure to thwart attacks, robust to withstand physical threats, resilient to ensure rapid and full recovery from adverse impacts, stronger to accommodate greater demands, and flexible to enable a broader deployment of clean-energy technologies.

Yet grid modernization is easier said than done. The U.S. electric grid is a massive, complex system that comprises various technologies for electricity generation, transmission, and distribution as well as multiple operators, regulators, and markets to ensure the continual flow of electricity. Few incentives or financially-attractive opportunities exist for grid stakeholders to demonstrate and deploy innovative models and technologies. And finally, the national-security benefits of a secure, robust, and resilient grid do not deliver direct, sufficient financial gains, creating a market failure that leaves the grid vulnerable to interference.

Plan of Action

The next administration should establish the Grid Resilience Innovation Demonstration (GRID) Network, a national-scale test facility designed to propel the nation toward a more secure, robust, and resilient grid that can strengthen economic and national security while enabling a clean-energy future. The GRID Network should comprise multiple, geographically distributed test beds that are widely accessible to institutions and researchers seeking to demonstrate technologies in prototypical environments. These test beds would be user facilities similar to those owned by the National Science Foundation (NSF) and the Department of Energy (DOE).

The overall goal of the GRID Network would be to support development, demonstration, and deployment of innovations in grid operation and technology, which are needed to address the evolving energy needs and expanding risks. The types of innovations could run from small to large scale, and from technical to operations, for example, components for high-voltage transmission or distribution, smart meters and associated cyber controls, direct current connects and disconnects, and microgrid operations with a variety of sources, loads and sizes.

The GRID Network would focus on innovations at mid- to high technology-readiness levels, i.e., innovations that have already been demonstrated successful at a limited level and seem like promising candidates for scale-up and commercialization. GRID Network test beds would provide the capacity to test at all scales from individual components in situ up to full end-to-end tests from the electricity generator to the final use. As modernization of the grid continues to occur, the anticipated outcomes will continue to evolve, and this facility will enable more innovations to be developed rapidly and tested such that the decision and risk of implementation can be reduced, which in turn should facilitate deployment. After all, utilities and investors want proven technologies, not science projects. As a result, we will see a more resilient grid that is both more secure and more robust (i.e., less blackouts, more value, savings and/or avoided costs).

GRID Network test beds could serve as official sites for the government to validate and certify any concept or technology intended for use in national-security applications. Through partnerships with community colleges, test beds could also offer workforce-development opportunities and vocational training to prepare technicians to install and operate next-generation grid technologies.

Implicit in the proposed action is that there are innovative technologies and strategies for operation that could be tested and rapidly deployed. While this has not been demonstrated through a survey or collection of data, it is a reasonable assumption based on our knowledge of the research and development (R&D) that is being done in this area as well as some general issues that impact the rapid, successful advancement from R&D to demonstration and deployment (i.e., crossing the so-called “Valley of Death”). Having a user facility aimed at helping bridge that gap that is available to companies and researchers widely would encourage innovators and innovations to surface, as has been demonstrated to work well in the past in the DoD and DOE. A minimally viable prototype will be needed for testing, which focuses the role of the facility between “development” and “deployment.” The costs for testing would be covered by the government, and like the existing user facilities, access to apply for time on GRID would be open to all ideas through a merit-review process. As a result, innovators should be motivated to develop their ideas to a product or operations model that can be tested given the low or zero cost of testing because the value of a having a government-tested and demonstrated device or operating model will be very high.

As is typical for federally-funded user facilities, the GRID Network would be run by a private entity (e.g., an objective management organization) through a public-private partnership with government agencies: in this case, likely DoD and DOE. The partnership could be managed by either agency or by an external entity, such as the National Resilient Grid Authority (NRGA) conceptualized in a 2020 report from the National Commission on Grid Resilience. Existing microgrids and other assets at DoD and DOE sites could provide the foundation for the GRID Network. The GRID Network will also build on and enhance the grid-resilience and modernization efforts that were established and have been pursued at both agencies.

Establishing and managing the GRID Network would cost the Federal Government an estimated $25–50 million per year at the low end to $200–300 million per year at the high end. This funding range is consistent with the funding levels for similar research and development facilities that DOE and DoD have supported over the last 15 years. Funding at the high end would support more sophisticated, comprehensive testing equipment, would permit users to take more time to test ideas, and would permit testing of more high-risk, high-reward ideas. Funding at the high end would also support efforts beyond just testing, such as development of national standards and protocols for grid operations, pursuit of collaborative technologies that would benefit niche applications, such as defense resilience pilot projects, and technology certifications.

The U.S. electric grid must be modernized to enable more use of renewable energy, deploy storage, and assure we improve the resilience. A test facility, such as the GRID facility described above, could help with modernization and entice investments toward deployment of new technologies. As a result, federal investment in the GRID Network would pay off directly or indirectly in four key ways:

1. Modernizing the U.S. electric grid will create shovel-ready construction jobs across the country. Since the GRID facility would be oriented toward rapid development and deployment of innovations, the facility could help enable aggressive and comprehensive modernization of the electric grid, which would involve construction jobs.
2. Grid components that are critical to U.S. infrastructure and national security—ranging from sensors to transformers—must be made through a trusted U.S. supply chain. Investments in the GRID Network hence represent investments in American manufacturing.
3. The GRID Network will support user generation of intellectual property and associated small business start-ups because some of the innovations that are tested and deployed will be manufactured, distributed and installed by start-ups, which will strengthen the U.S. supply chain. This new wave of business activity will propel the U.S. economy for years to come.
4. Grid modernization is a huge effort that will cost at least $500 billion and likely $1–2 trillion. Investing in technologies that could facilitate modernization will retire risks for grid modernization as the decisions by the various grid operators will be based on testing at an applicable scale. As a result, the GRID facility should help ensure the costs for grid modernization are in the middle of the range rather than at the higher end or above.

Conclusion

The U.S. electric grid is a crucial piece of the nation’s infrastructure. If it fails, critical sectors such as finance, healthcare, transportation, defense, agriculture, and manufacturing are at risk of failure as well. Yet the grid remains unacceptably vulnerable to threats large and small. There is a real danger of attacks on the grid by adversarial nations, and natural disasters can wipe out large sections of the grid for hours, days, or longer. Even factors as seemingly trivial as mylar balloons, small arms fire, and broken tree branches can cause costly damage when they interfere with critical grid components. It is past time to create a more robust and resilient system. Creating a testing ground for innovative solutions in grid operations and technology is an important step: one that will not only shore up a glaring weakness in our national security, but will also boost our economy through shovel-ready construction projects, creation of new and good-paying jobs, and development of intellectual property.

Summary

The next administration can achieve significant reductions in greenhouse-gas emissions by helping transition the commercial truck and bus industries to cleaner fuels like electric power and hydrogen. A key role for the Federal Government is to support the build-out of a nationwide network of zero-emission (i.e., alternative) fueling stations, including electric charging and hydrogen fueling stations. Achieving this goal will require federal leadership and significant collaboration with Congress, states, electric utilities, the private sector, and others. The amount of effort and time necessary for this effort means that it must be a day one priority to achieve meaningful progress within four years. A robust network of zero-emission fueling stations for trucks and buses will facilitate a significant and permanent reduction in greenhouse-gas emissions, improve air quality for communities nationwide, result in safer highways, and help create of hundreds of thousands of new jobs.