Remarks Delivered by OSTP Deputy Director for Energy Sally M. Benson at the Wilton E. Scott Institute for Energy Innovation
Carnegie Mellon University, Pittsburgh, PA
Thank you very much for the invitation to have a conversation with you today.
It’s wonderful to be back on a University campus – filled with creative people tackling the most challenging issues facing us today – and looking ahead to put us on the path to a more just and sustainable future.
Now Is the Time to Accelerate Climate Action
I want to start off by saying that I get it. For many of you here, especially students, I know you have lived under the cloud of climate change your whole lives. Since before you were born, scientists have been warning us that unless we rapidly and deeply reduce emissions of carbon dioxide and other greenhouse gases, the climate would change, causing harm to the natural ecosystems and engineered infrastructure that we depend on to sustain our lives. You are worried about your futures. You are worried that you will bear the burden for a problem that you didn’t create – and could have been prevented if we acted earlier. Why has it taken so long, too long, to take the steps needed to address the climate problem? Why has the world been so slow to take the actions needed reduce emissions?
I know that many of you have been frustrated by the lack of action. So am I!
What I want to talk with you about today is why I am so hopeful now. Why I think we’ve have turned the corner on climate change. Today, the foundations for equitably tackling the climate challenge are in place.
Number 1. The technology is available and affordable, or at least enough of it to go a long way towards Net Zero Emissions. Even as recent as ten years ago – we could not have said that.
Number 2. The awareness that our existing energy system is not fair, is established. Due to the hard work of researchers and advocates, we know the benefits of energy services are not equitably distributed and sadly today millions of people all over the world don’t have access to energy, or can’t get enough energy to keep their homes warm or cool, or struggle to pay their energy bills. And we know that people of color are disproportionately exposed to pollution from transit corridors and industrial activities. And we don’t just know about it. We’re doing something about it.
To address these historic inequities, the Administration’s Justice 40 program has created a goal that 40 percent of the overall benefits of certain Federal investments flow to disadvantaged communities that are marginalized, underserved, and overburdened by pollution.
Finally, number 3. The historic legislation passed through the Bipartisan Infrastructure Law and the Inflation Reduction Act, provides nearly ½ a trillion dollars to supercharge the energy transition.
Taken together, the resources and policies provided through these Laws are expected to reduce emissions by 40% by 2030, and put us well on the path to Net Zero Emissions by 2050 or sooner. And not only will we reduce emissions – we’ll create good-paying jobs, address historical injustices, while strengthening our economic and national security.
Because of all of this, I am more hopeful now than ever before. Today, the foundations for tackling the climate problem are in place.
That’s not to say we don’t have lots of work to do. We do! The hard work to implement all these actions has just begun.
Technology for a New Clean Energy Future
So let’s talk about the future, and start with technology.
Through the collective work of countless inventors and innovators, including many at Universities, we have the building blocks for a clean energy future. Today a future is in reach:
- when most of our electricity comes from carbon-free sources, solar, wind, batteries, nuclear power, natural gas or biomass with carbon capture, clean hydrogen, and more
- when zero-emissions vehicles are the cars of choice,
- when heat pumps provide clean and efficient heating and cooling,
- when clean hydrogen is fueling heavy industry and shipping,
- when advanced biofuels and electrofuels power aviation,
- when entirely new clean energy industries are growing and creating good new jobs,
- and our energy and related supply chains are more secure than ever,
- and the air and water are getting cleaner everywhere, and for everyone, especially for people of color and low-income communities who have borne a disproportionate share of historic pollution burdens.
This portfolio of clean energy technology can take us far along the path to Net Zero by 2050. As the amazing Secretary of Energy Jennifer Granholm says, Deploy! Deploy! Deploy!
That’s not to say we don’t need to invent more technology – or, we don’t need to continue improving the clean energy technology we have. We do! Some sectors of the economy, particularly the industrial and agricultural sector need more work. But, it’s not just that. We want all clean energy technologies to get less expensive, become more efficient, and be less resource intensive. We want clean energy to be the cheapest and most reliable energy, making clean energy the easy choice here and around the world! We are at the beginning of a century-scale transformation – a tectonic shift away from a centuries old energy system built around combusting fossil fuel and biomass, to a clean energy system built on sustainable energy resources and energy conversion technologies.
Transformative Legislation and Policies
Let’s now talk about the historic legislation that passed: what it is and why it is so important. These are huge pieces of legislation, so I would like to highlight some aspects of the legislation that I’m most excited about.
The two key pieces of legislation are the Bipartisan Infrastructure Law – called BIL — and the Inflation Reduction Act – called IRA. Together these provide massive investments in technology and infrastructure – nearly ½ a trillion dollars – to transform the energy system. The investments, which are designed to catalyze much more investment by the private sector, include tax credits for renewable and low-emissions energy, loan guarantees for building new clean industries, direct financial support for cost-shared technology demonstration projects in industrial decarbonization, and cost-shared programs with state and local governments to accelerate the buildout of infrastructure to support the energy transition.
For the first time – we have comprehensive legislation that will accelerate emissions reductions across every sector of the economy – transportation, electricity, industry, agriculture, as well as the residential and commercial sectors.
Reducing Emissions from the Electricity Sector
Eliminating emissions from the electricity sector is one of the best actions to fight climate – for two reasons. First because the electricity sector is the 2nd biggest source of U.S. emissions, and second, electrifying light duty transport, heating, and some industrial processes, can reduce carbon dioxide emissions by an estimated 30%. Taken together, these two actions can eliminate an estimated 50 to 60% of our energy-related carbon dioxide emissions. The BIL and IRA support decarbonization and electrification in many ways.
IRA will accelerate deployment of clean electricity by extending the existing investment and production credits for renewables through 2024 and then transitions to technology-neutral credits for renewables, new nuclear and other low and carbon-free energy sources including battery storage. It also creates a new tax credit for existing nuclear generation. By 2030 – we expect a 5-fold increase in the number of solar panels, a 20-fold increase in wind-turbines, and 2,300 new grid-scale battery facilities. The BIL also recognized that some of the nuclear power plant fleet, which is today providing almost one-half of our zero-emission electricity, is struggling financially – and provided $6 billion to support continued operations of this source of clean-firm power.
The BIL created two new program offices, the Grid Deployment Office and the Office of State and Community Energy Programs that will help to plan and coordinate the expansion of our electricity transmission system. Together these will drive investment of $23.5 billion to modernize and expand that capacity of the power grid.
Some of the technologies needed to get to a zero-emission grid are not quite ready for scale-up. For example, advanced nuclear power, using a new generation of smaller, modular, and factory-built reactors with fail-safe designs are being developed. The BIL provides $2.5 billion for building demonstration projects for advanced nuclear reactors that will be on-line in the late 2020’s. If successful, these will be ready to scale up quickly to help us get all the way to zero emissions by 2035. The BIL also supports demonstration projects on natural gas and coal power plants to provide another source of clean-firm power for the grid.
Taken together, models predict that electricity sector emissions will drop by 50-75%.
Reducing Emissions by Electrifying Transportation and Heating
The BIL and IRA also support electrifying transportation and heating. This includes:
- Up to $7,500 in tax credits for new electric vehicles and $4,000 for used electric vehicles
- $14,000 in direct consumer rebates for families to buy heat pumps or other energy efficient home appliances.
- $5 billion for clean school buses – at least half of which is for electric buses
- $7.5 billion for a nationwide network of 500,000 EV chargers
To spur supply, the IRA allocates more than $60 billion across the full supply chain to on-shore clean energy and transportation manufacturing in the United States. This includes tax credits for battery manufacturers and material suppliers as well as funds to help auto manufacturers retool their plants, incentivizing a robust domestic supply chain. The IRA also invests more than $60 billion in environmental justice priorities to reduce air pollution and deploy clean energy in overburdened communities.
Since President Biden took office last year, companies have stepped up and committed more than $85 billion to build factories to manufacture electric vehicles, batteries and EV chargers in America.
Taken together, a 10-15% reduction in emissions from the transportation sector is expected between now and 2030.
The Act dedicates over $17 billion for building efficiency upgrades and electrification, including a set of tax credits for households and over $11 billion in project grants. In particular, it designates $145.5 million to support tribal electrification – connecting homes that do not have power to emission-free electricity and retrofitting electrified homes to have zero-emission energy.
Hydrogen is expected to become a staple of the new clean energy system. It can be made in many ways, including by splitting water with electricity. It can also be made from biomass, waste, and natural gas with carbon capture. It can also be used for many purposes, including transportation, energy storage, industrial processing, and more.
The BIL and IRA support development of clean hydrogen through a combination of tax credits, technology demonstrations, infrastructure development, and R&D. For example, the IRA provides a credit of up to $3/kg of clean hydrogen when developers comply with prevailing wage and apprenticeship requirements. The bottom line is, this will bring clean hydrogen into the range where it is cost competitive with other sources of energy.
To further drive down the cost of clean hydrogen – the Department of Energy launched an Earth Shot with the goal of reducing the cost of clean hydrogen to $1 kg within a decade. This will be a game changer, making hydrogen one of the cheapest sources of energy. In total, the BIL invests about $10 billion to launch the hydrogen economy.
Carbon Capture and Storage
In addition to shifting to zero emission sources of energy – managing carbon emissions by capturing and storing them is also going to be needed. Most Net-Zero studies, including the U.S. Long Term Climate Strategy for getting to net-zero emissions by 2050, indicate that from 10 to 20 percent of emissions reductions will come from carbon capture and storage. The IRA and BIL provide support for the scale-up of CCS – through the 45Q tax credit that will now provide up to $85/tonne of carbon dioxide captured and stored. This subsidy will make it economical to capture and store carbon dioxide from many industrial sources – such as hydrogen production, industrial heat sources, cement, steel, and others. In addition to this, up to $2.1 billion in loans are available to build the pipeline infrastructure needed to transport captured carbon dioxide to underground storage sites.
Because this technology has yet to be demonstrated for a wide variety of applications, the BIL provides $2.5 billion to support cost-shared demonstration projects.
About 10 years ago, as we got a clearer idea of what it would take to stabilize the climate, integrated assessment models started to indicate that reducing emissions would not be enough, that we would have to actually take carbon dioxide out of the atmosphere, particularly if we wanted to stabilize the climate with only 1.5 oC of warming. Up until then, very little research was being done to develop technologies and approaches for doing this.
Today – so called carbon dioxide removal is a blanket term for both nature-based and engineered carbon removal. There are lots of different methods for removal – and the IRA and BIL supports these too.
Up to $180/tonne of carbon dioxide removed from the atmosphere by direct air capture is available through the IRA. And the BIL provides $3.5 billion to start carbon removal hubs, where a variety of technologies and approaches can be tested. To help reduce the cost of carbon dioxide removal the Department of Energy has launched an Earth Shot – with the goal of reducing the cost of carbon dioxide removal to $100/tonne, down from about $500/tonne today.
The Future is Bright
I could go on – because these are just some highlights of the historic legislation that has launched a decade of transformative climate action.
I am excited and optimistic about the future. I hope you are too.
If I were sitting in your chairs – thinking about my life and how I would like to spend my career – I couldn’t think of anything more exciting and rewarding than being part of this transformative decade of climate action – that will set in motion the cascade of changes that will transform not only our energy system – but create great new jobs, clean up the air and water, create a more equitable society, and protect our home, planet earth.