The U.S. Energy Information Administration reported last week that natural gas in storage increased by 63 Bcf. There was an injection for the same week last year of 32 Bcf while the five-year average injection is 62 Bcf. Total U.S. natural gas in storage stood at 3,611 Bcf last week, 8.0% less than last year and 2.7% lower than the five-year average for this time of year.
Maine voters have rejected the New England Clean Energy Connect (NECEC) project, a high voltage power line designed to deliver Canadian hydroelectric power to Massachusetts utilities. In a vote of 59% to 41%, Mainers decisively kneecapped the project via ballot initiative after a historic campaign of public influence spending by large energy companies both for and against. In a nutshell: (1) the project would have been fully paid for by Massachusetts ratepayers, (2) it would have been built almost entirely along existing transmission corridors where trees have already been cleared, (3) it would have resulted in lower and more stable energy prices for all of New England, (4) it was a key component to Massachusetts’ clean energy goals, which will now likely have to rely on more expensive and less reliable power resources. Opponents of the project were led by large regional power plant owners (NextEra and Calpine) who were concerned about the project’s price suppression impact on New England wholesale power prices. Avangrid has appealed the ballot initiative in Maine courts, calling it unconstitutional but regardless of how the court rules, the vote is a troubling sign for clean energy development in the region. New England has developed a reputation for killing large energy projects of almost any kind in recent years. Without better cooperation between states and amongst citizenry, New England is destined to protracted legal battles, inflated costs, and coming up short on its carbon reduction goals.
Last week the White House and Democrats in Congress agreed to a $1.75 trillion budget framework. Within the budget, President Biden has proposed $550 billion in clean energy and climate spending over the next 10 years. According to Advanced Energy Economy, “If approved by Congress, the “historic” package would be the largest U.S. investment ever in clean energy.” This week, President Biden also arrived in Glasgow, Scotland for the COP26 UN Climate Summit. As discussions continue around the $1.75 trillion budget framework including a proposed $550 billion in clean energy and climate spending, Biden along with other negotiators look to convince other Paris signatories to increase their own climate targets to be in line with a warming scenario of 1.5 degrees C. Climate scientists say post-industrial temperatures must be held to this level by the end of the century to avoid catastrophic impacts from rising global temperatures. As COP26 continues to run through Nov. 12, U.S. House speaker Nancy Pelosi is targeting a vote this week on the reconciliation bill, passing the bill would be a major win for President Biden while he remains in Glasgow.
Many details of the $1.75 trillion budget package have yet to be disclosed, but the budget aims to accelerate the shift away from fossil fuels in the power, transportation and building sectors. The largest portion of the climate and clean energy investment would allocate $320 billion and provide for 10-year expanded tax credits for “utility-scale and residential clean energy, transmission and storage, clean passenger and commercial vehicles, and clean energy manufacturing,” according to a three-page summary from the White House. In a recent quarterly earnings call Xcel Energy President, Robert Frenzel, explained “This proposed plan creates significant customer benefits by lowering the cost of our proposed resource plans and potentially accelerating our clean energy transition.” In addition to extending existing tax credits for wind and solar projects, the legislation would allow project owners to receive a direct payment for their investments instead of a tax credit. Frenzel explained, “A direct pay option would provide greater financial flexibility, increased corporate cash flow and credit metrics, which would reduce our financing needs.” The legislation also aims to extend and create new tax credits for various resources, including wind, solar and transmission.
In addition to the $320 billion previously mentioned, the plan aims to provide $105 billion for climate resilience, including investments and incentives to address extreme weather and legacy pollution and to develop a Civilian Climate Corps with over 300,000 members. Another $110 billion would support investments and incentives for clean energy technology, manufacturing and supply chains, including for "solar, batteries, and advanced materials while boosting the competitiveness of existing industries, like steel, cement, and aluminum.” Finally, $20 billion would support clean energy procurement by the federal government, including incentives for the government to purchase "long-duration storage, small modular reactors, and clean construction materials."
As negotiations continue, it appears there will be significant changes to the legislation. One major amendment from the initial Build Back Better Plan included removal of the $150 billion Clean Electricity Performance Program, which would have rewarded electric providers for meeting clean energy targets and punishing those that fail to do so. All-in-all supporters of the legislation believe the plan could get the U.S. most of the way towards its goal of slashing its greenhouse gas footprint 50% by 2030 relative to 2005 levels.
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