The Biden administration has set itself a goal of halving U.S. emissions by 2030. But a key part of its plan to get there, the Clean Electricity Performance Program, or CEPP, is now under threat.
The program, which is part of the Build Back Better Act currently pending in Congress, would give utility companies a financial incentive to switch from using polluting fossil fuels to clean energy. Each utility is expected to increase clean electricity production by 4% per year, with subsidies for each clean megawatt hour added beyond the first 1.5%. The program would also impose fines on utilities that don’t move fast enough.
No Republican senator supports the bill, which also contains other climate provisions such as tax credits for consumers who buy electric vehicles, funding for electric vehicle chargers, incentives for sustainable agriculture and many other programs, so it would take every Democrat’s vote to pass. And West Virginia Senator Joe Manchin, whose vote is needed for the bill to pass, says he is also opposed. Manchin, who has financial ties to the coal industry, says he doesn’t want to use taxpayers’ money to “pay private companies to do what they’re already doing.” (Arizona Democrat Kyrsten Sinema also opposes the spending bill but did not explain his reasoning).
The catch, of course, is that many utilities are not acting quickly enough on their own to deal with the climate crisis. (Manchin also didn’t explain why he couldn’t afford the fines imposed on these companies, which would cost taxpayers nothing and likely hurt companies if companies are indeed already in the process of switching to energy. clean. His office did not respond to a request for comment.)
Energy Innovation, a non-profit organization, modeled several climate provisions in the two key bills currently in Congress – the Budget Bill and the Infrastructure Bill – and found that CEPP has the greater impact on the country’s ability to reduce its emissions. While other climate policies can help, emissions in 2030 will likely be between 250 and 700 million megatonnes higher if CEPP is not also in place.
Power companies are already turning to wind and solar, as these are the cheapest option for new power plants. But many are still slow to close older factories. âAs utilities seek to create new resources, wind and solar are among the most attractive options,â says Megan Mahajan, energy policy design manager at Energy Innovation. âThis is therefore reflected in our case of ‘business as usual’. But there are a lot of existing coal and gas-fired power plants, and even if coal becomes less profitable and you see coal-fired power plants withdrawn, those existing sources of generation are still on the books and will continue. “
In a business-as-usual scenario, without new climate policies, the analysis found that the power sector could only achieve 48% clean energy by the end of the decade. With some new climate policies, including a clean energy tax credit, but not the CEPP, we could reach 61% to 69%. With the CEPP, this climbs from 70 to 85%.
Even if all the new climate provisions are passed, the United States will likely still have to do more to meet the target of 50-52% emission reductions. Another analysis from Senator Schumer’s office found that the policy could allow a 45% reduction. But it’s a solid foundation, says Mahajan. Other measures could achieve a 50% reduction, including state and local policies and other government actions, such as more EPA regulations.
It will be difficult to do this without the CEPP. “This is absolutely the most important climate policy in the package,” said Leah Stokes, an expert on climate policy. New York Times. âWe fundamentally need it to achieve our climate goals. It’s just the reality. And now we can’t. So it’s pretty sad.