Legal & Regulatory

How Biden’s Presidency Could (Further) Transform the Power Sector

Joe Biden on Nov. 7 clinched the 270 electoral votes needed to win the presidency, barring Donald Trump’s prospects for a second-term. Almost immediately, reactions from various parts of the power sector streamed in, highlighting possibilities and pitfalls of Biden’s wide-ranging energy and environment agenda. 

Energy, and its implications on the environment, figured prominently as key points of contention between the two presidential candidates. But for the most part, despite a marked shift in policy priorities, changes for the power sector—which is already in the midst of a dramatic transformation—will likely continue on a trajectory that has been primarily fueled by market forces, technology innovation, and customer and investor preferences. If and how a Biden administration will accelerate the transformation could depend on several factors.

The Trump Administration’s Legacy

During his four years, Trump’s administration worked aggressively to increase exports of domestic coal and gas, approving key projects to expand markets abroad, such as the Lake Charles Liquefied Natural Gas terminal. But the Department of Energy (DOE) also expanded its focus on preserving the flailing coal power industry, including through the Coal FIRST program, which aims to provide a new coal-derived electricity “product” that would have minimal environmental footprint reduce up-front costs, and help coal respond more flexibly to changing needs on the grid. 

Under Trump, the DOE and Nuclear Regulatory Commission (NRC) also notably championed strengthening the U.S. nuclear fuel cycle to help the nation regain its international standing in nuclear energy and prepare it for a widespread development and deployment of advanced nuclear reactors.

While the White House’s Nuclear Fuel Working Group earlier this year recommended bold action to revive the uranium mining industry, the DOE has pushed to establish a commercial supply of highassay low-enriched fuel. It recently also picked two advanced reactors with a goal to begin operating them within seven years. But the DOE has also spearheaded initiatives to spur innovation in geothermal, wind, solar, and hydropower, and according to the Congressional Research Service, billions of dollars were appropriated or earmarked for renewable energy and energy efficiency incentives during the Trump years. 

Meanwhile, the Trump administration took notable steps to address grid security, both for its reliability and to guard against risks with national security implications, including cybersecurity and supply chain risks. Especially notable on that front were actions by the Federal Energy Regulatory Commission (FERC), the independent energy regulator.

Despite increased partisanship and politicization, FERC acted on modernizing regulations that govern Public Utility Regulatory Policies Act of 1978 (PURPA) and held technical conferences on distributed energy, hybrid resources, and carbon pricing. It also issued pivotal rules to address the effects of state clean energy rules on organized wholesale electricity markets. (The White House last week abruptly replaced FERC’s chairman, a move some industry observers suggested was rooted in political priorities.)

Most of the initiatives described above have strong bipartisan support, and a Biden administration may continue support for them. However, that’s unlikely for the Trump administration’s most politically sensitive ambitions: deregulation. One of Trump’s first actions was to issue the “Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs,” which directed federal agencies to identify two regulations to be repealed for any one proposed. On this front, the Trump administration’s Environmental Protection Agency (EPA) had a substantial impact, officially rolling back as many as 70 environmental rules and regulations

The most pivotal of these for the power sector is perhaps the repeal of the Obama administration’s landmark Clean Power Plan, and its replacement with the Affordable Clean Energy (ACE) rule. However, the EPA also withdrew the legal justification for the Obama-era Mercury and Air Toxics Standards; weakened final state guidelines for its regional haze program; revised the technology-based effluent limitations guidelines and standards; and finalized several changes to the regulations for disposal of coal ash from electric utilities. How these rules will fare remains uncertain, because they are all embroiled in litigation.  

Other measures that could have long-lasting implications for a Biden administration are that the Trump administration withdrew the U.S. from the Paris climate agreement; it directed agencies to stop using an Obama-era calculation of the social cost of carbon; and it weakened the National Environmental Policy Act, one of the country’s most significant environmental laws, to expedite approval of public infrastructure projects, such as roads, pipelines, and telecommunications networks. 

Biden’s Energy Proposals 

Energy, and specifically “clean energy,” have been central to the Biden campaign’s plan to spur an economic recovery. Biden’s stance is rooted in addressing climate change, one of four major crises he said the U.S. is suffering, along with the intensifying pandemic, its hefty effect on the economy, and social unrest. 

The Biden campaign outlined a bold plan it calls the “Clean Energy Revolution” that leans on the Green New Deal as a framework. The Green New Deal is a term that has been used interchangeably by several entities, from the United Nations to the Obama administration, to describe a set of policies that aim to make systemic change. Today, it most prominently describes a controversial, sweeping energy reform measure proposed in February 2019 by Rep. Alexandria Ocasio-Cortez (D-New York) and Sen. Ed Markey (D-Mass.), and 100 co-sponsors in Congress. 

But while Biden denied outright embracing the Green New Deal during the presidential debates, his Clean Energy Revolution echoes the measure, though his plan provides a less ambitious timeframe and lower costs. The following actions are among the Clean Energy Revolution’s major tenets. 

Re-entering the Paris Agreement. Biden has consistently signaled the U.S. will rejoin the Paris agreement, a 2015 global pact that aims to keep the increase in average temperatures worldwide “well below” 2 degrees Celsius (3.6 degrees Fahrenheit)—and to which 189 of the world’s 193 countries remain committed.  

But rejoining would require resubmitting a new emissions target, more stringent than the Obama administration’s pledge to ensure a greenhouse gas (GHG) reduction of 26%–28% below 2005 levels by 2025. One important marker is that the U.S. power sector has already exceeded that goal. According to the U.S. Energy Information Administration (EIA), between 2005 and 2019, total U.S. electricity generation increased by almost 2% while related carbon dioxide emissions fell by 33%. “During that period, fossil fuel electricity generation declined by about 11%, and non-carbon electricity generation rose by 35%,” it noted in September

Index of gross domestic product (GDP)/capita, population, CO2/energy, and energy/GDP that influence energy-related CO2 emissions. Source: EIA, September 2020

Biden’s plan promises a series of imminent actions. Within the first 100 days, it says, Biden will convene a world summit to “persuade them to join the U.S. in making more ambitious national pledges,” above and beyond commitments they already have. It will also pursue “strong new measures” to stop other countries from “cheating” on their climate commitments, and “demand a worldwide ban on fossil fuel subsidies.” The plan, notably,  prominently targets China (which in September announced it would seek carbon neutrality before 2060), and it suggests a Biden administration would press the country to stop “subsidizing coal exports and outsourcing carbon pollution.” 

A 100% Clean Energy Economy That Reaches Net-Zero Emissions No Later than 2050. On “day one,” the campaign says, a Biden administration will sign a series of executive orders that will demand Congress enact legislation within the first year that establishes an “enforcement mechanism” with milestone targets no later than 2025; makes a “historic” investment in clean energy and climate research and innovation; and incentivizes “rapid deployment of clean energy innovations across the economy,” especially to address resilience in climate change–affected communities.

Bolstering State and City Goals. A Biden administration may scaffold growing climate efforts by cities and states with federal support. In his plan, Biden highlighted that a total of 29 states and the District of Columbia have legally binding renewable or clean energy standards, and the level of ambition for state programs has accelerated dramatically in recent years. About 14 of these states and the District of Columbia have 100% renewable or carbon-free energy mandates or goals, while many more have similar non-binding commitments. On the local level, more than 100 cities and 10 counties have adopted 100% clean energy goals.  

Percent of total U.S. electricity CO2 emissions accounted for by selected state legislation and utility pledges. Courtesy: Clean Air Task Force (See an interactive version of this graphic and a map here:

The Biden plan also highlighted Oregon’s (now-dead) interest in a carbon cap and trade proposal, which echoes existing systems in California and the nine northeastern states, which comprise the Regional Greenhouse Gas Initiative (RGGI). The plan, however, did not note growing corporate efforts to address carbon emissions. As of November, nearly 60 U.S. utilities had carbon-free or net-zero emission goals, and at least 31 of those companies had set net-zero or equivalent goals.

A Focus on Innovation. The Biden team will establish a new cross-agency, Advanced Research Projects Agency focused on climate (ARPA-C), presumably to complement ARPA-E, which focused on energy. (In its 2020 budget, the Trump administration notably sought to halt the 2007-established ARPA-E.) Like the Trump administration, however, the Biden team has emphasized the role technology innovation will play in addressing an energy transformation. Among them are: 

  • Grid-Scale Storage. It wants to tamp down the costs of grid-scale storage—technologies are not specified—to “one-tenth the cost of lithium-ion batteries.”
  • Going Big on Nuclear and Advanced Nuclear. Like the Trump administration, it wants to shave the costs to installing advanced nuclear reactors to “half the construction cost of today’s reactors.” While the Trump administration highlighted nuclear’s role in national security, a Biden administration may make it a pillar to fight climate change, which it paints blatantly as an existing national security threat. “To address the climate emergency threatening our communities, economy, and national security, we must look at all low- and zero-carbon technologies,” it says. “That’s why Biden will support a research agenda through ARPA-C to look at issues, ranging from cost to safety to waste disposal systems, that remain an ongoing challenge with nuclear power today.”  
  • Carbon Capture Use and Storage (CCUS). In another technology innovation pursued by the Trump administration, the Biden team wants to capture “carbon dioxide from power plant exhausts followed by sequestering it deep underground or using it make alternative products.” The Biden plan will “double down on federal investments and enhance tax incentives for CCUS,” it says. “At the same time, to bring new carbon capture technologies to market, Biden will continue to fund carbon capture research, development, and demonstration.”
  • Decarbonized Gas—Hydrogen. Tamping down costs to enable “green hydrogen”—hydrogen produced by renewables—will be a priority. The Biden team wants that production to cost the same as that from shale gas. 
  • Buildings and Industry. Decarbonization will extend to industrial heat and buildings. (As POWER has reported, the power sector is already making headway on the power-to-heat front worldwide.) The Biden plan, however, also emphasizes building energy efficiency, and it plans to set a target of reducing the carbon footprint of the U.S. building stock 50% by 2035 to create incentives for “deep retrofits that combine appliance electrification, efficiency, and on-site clean power generation.”

Electric Vehicles. Working in concert with states and local governments, a Biden administration may support a wide expansion of charging stations and coordination.

An Infrastructure Overhaul. On a larger level, a Biden administration will also seek to rebuild energy infrastructure to help it withstand climate change. “Every dollar spent toward rebuilding our roads, bridges, buildings, the electric grid, and our water infrastructure will be used to prevent, reduce, and withstand a changing climate,” it says. 

Action Against Fossil Fuel Companies. Perhaps of specific concern to major power players, which still have substantial coal and gas–fired fleets, is the plan’s blatant promise to “take action against fossil fuel companies and other polluters who put profit over people and knowingly harm our environment and poison our communities’ air, land, and water, or conceal information regarding potential environmental and health risks.” The plan, however, promises “an inclusive, community-driven process.”

The U.S. Can Turn Climate Change From a Threat Into An Opportunity. The Biden campaign insists clean energy will be the cornerstone of any economic recovery. It claims: “If we can harness all of our energy and talents, and unmatchable American innovation, we can turn this threat into an opportunity to revitalize the U.S. energy sector and boost growth economy-wide. We can create new industries that reinvigorate our manufacturing and create high-quality, middle-class jobs in cities and towns across the United States. We can lead America to become the world’s clean energy superpower. We can export our clean-energy technology across the globe and create high-quality, middle-class jobs here at home.”

Protections for Coal Power Plant Workers. To that end, the Biden plan details measures it will take to help coal miners and coal power plant workers. “As economic trends continue to shift our country away from coal as an energy source, we have an obligation to help these workers and their communities succeed,” it says. One measure, specifically, suggests Biden will establish a Task Force on Coal and Power Plant Communities, an effort that could help beleaguered communities “access federal investments and leverage private sector investments to help create high-paying union jobs based upon the unique assets of each community, partner with unions and community colleges to create training opportunities for these new jobs, repair infrastructure, keep public employees like firefighters and teachers on the payroll, and keep local hospitals open.” 

Paying for It Through a Rollback in Tax Incentives. Perhaps of most significance—and especially if the Democrats do not clinch a majority in the Senate (as will now be determined by two run-off races in Georgia)—is that a Biden administration estimates the Clean Energy Revolution could require a federal investment of $1.7 trillion over the next 10 years. The Biden team also plans to leverage “private sector and state and local investments” to total “more than $5 trillion.” All of that will be paid “by reversing the excesses of the Trump tax cuts for corporations, reducing incentives for tax havens, evasion, and outsourcing, ensuring corporations pay their fair share, closing other loopholes in our tax code that reward wealth not work, and ending subsidies for fossil fuels,” it says. 

The Political Outlook

As highlighted above, many of Biden’s proposals are an extension of the Trump administration’s priorities, specifically as they concern the energy transformation. But securing federal funding may continue to be a struggle. 

It’s worth noting that if Democrats do not clinch control of the Senate, legislative efforts to uphold Biden’s proposals may be blocked by Mitch McConnell (R-Kentucky), who will likely continue as Senate majority leader. Currently, Republicans hold a 53-47 majority in the U.S. Senate. If Democrats are victorious in the two Georgia Senate run-offs, which are scheduled in January, Democrat Vice President–Elect Kamala Harris could cast tie-breaking votes in the chamber and determine the chamber’s majority. 

But it’s also worth noting that the Senate Committee on Energy and Natural Resources—which is distinguished as among the most nonpartisan, or bipartisan, in the Senate—is led by two notable moderates: Sen. Lisa Murkowski, a Republican from Alaska, and Sen. Joe Manchin, a Democrat from coal-rich West Virginia. Murkowski has promoted collaboration and bipartisanship, and on Nov. 7, she again urged “bridging” divisions to help meet challenges facing Americans. Manchin also stressed collaboration, urging an investment in “the values and principles that make our nation the greatest country on Earth.” During the 116th Congress, both senators worked to integrate several issues concerning the ongoing debate over the federal role in energy policy into the American Energy Innovation Act. The House this September passed its version of the bill, the Clean Economy Jobs and Innovation Act, which recognized bipartisan priorities to propel power technology innovation.

Jubilation and Caution: Industry Reacts

POWER received a predictably assorted bag of reactions to projections that Joe Biden has won the presidential race, and it will update this page as more are received over the next week. Analysts, for the most part, offered measured outlooks, cautioning that control of the Senate could limit Biden’s energy agenda. Industry trade groups and environmental organizations expressed a mixed array of jubilation and disappointment. 

Analysts: Power Sector Consequences to Watch

Ed Crooks, vice chair of Wood Mackenzie’s Americas division told POWER that if Republicans regain control in the Senate, the federal government may be “constrained,” which is why state policies will continue to be important. “The key influences shaping the U.S. energy industry are likely to be market forces, just as they were under Barack Obama and Donald Trump. But the change of federal government will have some significant consequences,” he said. Among expected power-specific influences are a boost for offshore wind, and support for electric vehicles (EVs). 

“The Trump administration has slowed the process of approving offshore wind and proposed to close off a section of the U.S. Atlantic coast from Florida to Virginia. A Biden administration will act faster to support states and companies seeking to develop offshore wind industries,” he said. For electric vehicles, he noted: “Biden plans to impose tighter fuel economy standards, which will help sales of electric cars. By 2030 there could be 4 million EVs on U.S. roads as a result of those standards, almost 60% more than if the Trump administration’s rules had taken effect. However, the impact on U.S. fuel demand this decade will be minimal. Even 4 million EVs represent only about 1.5% of the total of 275 million vehicles we expect on U.S. roads in 2030.”

Power Sector Trade Groups and Special Interests 

But, representing more than 80 businesses that are supportive of carbon capture, Carbon Capture Coalition Director Brad Crabtree said: “The results of our national election underscore the continued need for deeply bipartisan solutions to our climate and energy challenges.”

Crabtree has repeatedly dispelled misinformation that paints carbon capture as a fossil–only interest. On Saturday, he stressed: “Carbon capture and removal enjoy unprecedented and growing support from across the political spectrum and represent one of the best opportunities to deliver on national priorities of reducing carbon emissions to meet mid century climate goals, protecting and creating high wage jobs, supporting domestic energy and industrial production and manufacturing, and sustaining American technology leadership in the 21st century.”

Biden, Crabtree noted, has “made his support for carbon capture and removal technologies a central pillar of his campaign’s climate plan. The Coalition’s 80-plus industry, labor and NGO [non-governmental organization] participants look forward to working with his administration to advance policies that will support economywide commercial deployment of these critical technologies.”

Maria Korsnick, president and CEO of the Nuclear Energy Institute, also stressed a need for continuity. “We look forward to working with President-elect Biden and his team to continue the momentum we have seen under the Trump Administration to support nuclear carbon-free energy as a key source to an increasingly decarbonized economy. The Biden team has prepared an ambitious roadmap to combat our climate crisis and secure an environmentally just future—none of which is possible without nuclear energy,” she said. “If we are truly committed to reducing carbon emissions, now is the time for the Biden administration and congressional leadership to put meaningful actions in place to preserve our largest source of carbon-free energy and pave the way for advanced nuclear technologies.”

Renewables groups were also optimistic. Gregory Wetstone, president and CEO of the American Council on Renewable Energy (ACORE) commended Biden for his pledge to rejoin the Paris agreement. “The time has come for the U.S. to move beyond climate denial and resume a global leadership role in the fight against climate change,” he said. “An accelerated transition to renewable power provides both climate protection and economic prosperity. With more than $60 billion in annual investment, and two of the nation’s fastest-growing job categories—wind turbine technician and solar power installer—renewable energy can help power America’s economic recovery, as it did in 2009.”

Tom Kiernan, CEO of the American Wind Energy Association, said the wind sector was ready to support Biden’s “ambitious, comprehensive approach to energy policy that recognizes renewable energy’s ability to grow America’s economy and create a cleaner environment, while keeping electricity costs low and combating the threat of climate change.” He added: “The U.S. wind sector and its growing workforce of over 120,000 Americans stand ready to help put that plan into action and support the Biden administration in delivering on the immense promise of renewable energy to add well-paying jobs to the U.S. economy and reach the President-elect’s 100% target for a carbon-free America by the middle of this century.” 

The energy storage industry also hailed the election. “By electing Joe Biden as President of the United States of America, Americans have sent the signal to accelerate the path forward toward a clean energy economy,” said Kelly Speakes-Backman, CEO of the U.S. Energy Storage Association. “We expect to see strong support from the new Administration focused on decarbonization of the electric and transportation sectors, which will further drive the deployment of energy storage. We look forward to working with the Biden Administration and Congressional members to continue our bipartisan efforts to advance our vision of 100 GW by 2030, creating a more resilient, efficient, sustainable, and affordable electricity grid.” 

The American Council for an Energy-Efficient Economy (ACEEE) highlighted Biden’s election as an opportunity to use energy efficiency to deliver the urgent and bold action needed to cut greenhouse gas emissions. “We urge the Biden administration to work together with a closely divided Congress to incorporate energy efficiency into a recovery package, to invest in weatherizing homes and in the research and development of energy-saving technologies, and to pursue new bipartisan transportation and energy legislation. We also urge the Biden administration to adopt strong energy-saving standards for light bulbs, appliances, equipment, cars, trucks, and other vehicles,” said ACEEE Executive Director Steven Nadel.

Digital Industry Watching Major Issues

On the digital side, global technology trade association ITI also expressed optimism that Biden’s transformational plan offered major opportunities for the digital industry. “We understand revitalizing and growing the U.S. economy will be a top focus as the world continues to grapple with COVID-19 and the economic fallout from the pandemic. Our industry can be a partner on this all-important effort, as well as on policies that maintain America’s global leadership and foster greater opportunity for American families across all communities,” said ITI President and CEO Jason Oxman. 

According to ITI, a Biden administration will have to grapple with many of the same issues the Trump administration faced, but it said it does not expect that Biden will “engage in a wholesale reversal” of President Trump’s policies. A Biden administration will likely continue to be aggressive on cybersecurity, and particularly on approaches to counter China’s techno-economic ambitions. 

A specific issue to watch is how the administration deals with supply chain issues that have engulfed every part of the power sector in uncertainty about future regulations governing acquisition, imports, transfers, and installation of bulk power equipment sourced from China.  

“Based on statements made during the campaign, the Biden-Harris Administration will also likely move away from a company-by-company approach to a wholistic, multilateral approach to counter Chinese influence in the [information and communications technology] supply chain. The President-elect has also highlighted the need to reinvigorate the U.S. semiconductor manufacturing base, a foundational sector of the global technology ecosystem,” it said in a Nov. 8 analysis sent to POWER

“Given the impact of COVID-19 on the United States and the recognition that supply chains should be diversified, the Biden-Harris Administration will likely continue to emphasize the need to scrutinize and modify supply chains for purposes of national security and increasing U.S. self-sufficiency and manufacturing. The emphasis on controlling and maintaining U.S. leadership in areas of sensitive technology will remain, but there will be a greater willingness to forge multinational coalitions and work through pre-existing international mechanisms,” it explained.  

Environmental Groups Celebrate Prospect of Bold Climate Action 

Gina McCarthy, president and CEO of the NRDC Action Fund, a political advocacy group affiliated with (but notably separate from) environmental group Natural Resources Defense Council (NRDC), said, “Joe Biden’s climate plan is the strongest we have ever seen from any president before him.” The statement is notable from McCarthy, who led the EPA under the latter half of Obama’s presidency. “Now the White House can finally get back to leading the charge against the central environmental crisis of our time,” she said. 

The Southern Alliance for Clean Energy (SACE), which focuses its advocacy efforts on the southeastern U.S. (where several major utilities operate in regulated markets), lauded the election as a crucial signal that voters care deeply about climate change. “SACE is hopeful that President-Elect Biden’s belief in science, acknowledgment of the government’s role in solving the climate crisis, and commitment to doing so in an equitable and fair way will play a pivotal role in moving us collectively to a safer, healthier, more vibrant future,” said Executive Director Dr. Stephen A. Smith.

Smith notably also urged President-Elect Biden to “prioritize appointments to the Tennessee Valley Authority Board of Directors so that the largest public power entity in the United States can be a living laboratory for clean energy innovation.”

Sonal Patel is a POWER senior associate editor (@sonalcpatel@POWERmagazine).

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