President-elect Joe Biden has big plans on climate and clean energy transition for when he takes office in January, however the part of their ability to act on these plans may rest on the results of the Senate races still to come and if the Republicans maintain majority control of the U.S. Senate.
The Biden-Harris transition website showcases four policy areas they plan to prioritize from Day 1 of their administration: The COVID-19 pandemic, economic recovery, racial equity, and climate change. It states “At this moment of profound crisis, we have the opportunity to build a more resilient, sustainable economy – one that will put the United States on an irreversible path to achieve net-zero emissions, economy-wide, by no later than 2050.” Biden plans to rebuild the U.S. economy with a focus on reducing emissions, extending tax incentives for clean energy, and reinstating the environmental regulations that were rolled back under the Trump administration.
President-elect Biden is expected to help accelerate the U.S. power sector’s transition to low-carbon generation – something that many utilities companies, states, and cities across the U.S. have already adopted with their own clean energy targets. And given the nation’s role in global energy markets, changes to U.S. demand is expected to have long-term implications on the energy and metals sector moving forward, with a growing emphasis on batteries and other future-energy metals.
The proposals include a $2 trillion plan to decarbonize the U.S. power sector by 2035 which would make buildings more sustainable and boost the deployment of electric vehicles nationally. This net-zero-by-2035 goal hinges on strong federal investment in clean energy procurement and research. He has thus called for a $400 billion increase in federal purchases of electric vehicles and clean energy inputs (like batteries). Additionally, they will be creating a new Advanced Research Projects Agency for Climate (ARPA-C) which would promote the development of grid-scale battery storage at one-tenth the cost of li-ion batteries, small modular nuclear reactors, carbon capture at existing industrial and power plants, and zero-net-energy buildings at zero net cost, among others. He also plans to deploy 500,000 new public EV charging stations and to fully restore the federal tax credit for EV purchases.
Another significant plan for Biden is for the U.S. to reenter the Paris Agreement on climate change, reversing Trump’s 2017 decision to exit. His emphasis on renewable energy and EV deployment will likely affect fossil fuel demand as we move forward. With that, Andrew Weisel, Equity Research Director for US utilities and power at Scotia Capital has noted that “U.S. utilities seem uniquely positioned to benefit from Biden’s green infrastructure plan, which would support higher infrastructure spending, renewables in particular.”
A Republican Senate majority would likely hinder the incoming Democratic president’s climate plans and Biden would likely need to implement his climate proposals through executive orders and federal agency rulemakings. A sustained GOP Senate is expected to limit spending on clean energy innovation and green infrastructure building and would be less interested to expanding tax credits for clean energy.
