By Jeff St. John

March 4, 2020 - The U.S. Senate will consider a bipartisan energy package this week that could be this year’s best legislative hope to increase federal funding for a number of energy technologies, from solar, wind and batteries, to more efficient fossil fuel-fired power and carbon capture. 

The American Energy Innovation Act, introduced Thursday by Sens. Lisa Murkowski, R-Alaska, and Joe Manchin, D-West Virginia, contains nearly 50 energy bills from last year in a sprawling 555-page document. Murkowski, chair of the Senate Committee on Energy and Natural Resources, called it “our best chance to modernize our nation's energy policies in more than 12 years,” or since the passage of the American Clean Energy and Security Act of 2009. 

The bill contains hundreds of millions of dollars in funding over the coming years to boost research and development for solar and wind power, energy storage, smart grid, electric vehicles and other key clean energy technologies. Manchin, the committee’s ranking Democrat, said it would “make a down payment on emissions-reducing technologies, reassert the United States’ leadership role in global markets, enhance our grid security and protect consumers.”

But its lack of targets or mandates for reducing carbon emissions, and some of its provisions on fossil fuels and mining, are expected to draw opposition from Democrats seeking a national policy to combat climate change. Democrats in the House have submitted a bill, dubbed the CLEAN Act, that calls for a 100 percent clean economy by 2050 and a comprehensive climate policy. 

The bill also doesn’t include any extension of investment tax credits for solar power or federal tax credits for electric vehicles that were left out of the $1.37 trillion spending bill passed by Congress in December. Senate Minority Leader Charles E. Schumer, D-New York, plans to seek amendments to the new Senate energy bill to extend these tax credits as well as push for more stringent building codes, The Washington Post reported Monday. 

Efficiency groups are also decrying the bill’s absence of a provision to allow homeowners to qualify for larger mortgages for more energy-efficient homes. This policy, part of a 2019 bill from Sens. Rob Portman, R-Ohio, and Jeanne Shaheen, D-New Hampshire, was stripped from the Senate bill due to pressure from homebuilder industry groups, according to the Alliance to Save Energy nonprofit group. 

It’s unclear how the bill will fare in a Senate controlled by a Republican party that has largely rejected efforts to combat climate change. House Republicans did introduce legislation last month to fund a massive tree-planting effort to help absorb carbon dioxide from the atmosphere. 

The Senate bill has taken the attention from competing bills in the House, with Senate Majority Leader Mitch McConnell, R-Kentucky, indicating it could come to a vote this week, according to news reports. That’s put focus on just what the bill does propose to fund and how it will do so. 

Renewable Energy 

While the Senate bill doesn’t tackle tax or climate policy, its “support for short-, mid- and long-term innovation in the solar industry and American solar manufacturing represents steps in the right direction for advancing America’s clean energy portfolio,” Erin Duncan, vice president of congressional affairs at the Solar Energy Industries Association, said in a statement.

Specifically, the bill would direct $270 million per year through 2025 toward Department of Energy programs to improve solar PV’s  “energy efficiency, cost-effectiveness, reliability, resilience, security, integration, manufacturability and recyclability,” as well as ways to integrate solar to the power grid and convert it to other forms of energy, with a focus on supporting U.S. industry and jobs. It’s a broad mandate, calling for the DOE to create plans for funding through grants for research and demonstration projects, technical assistance, contracts, competitions and other means, and with potential areas of interest including hardware, software, manufacturing, integration and reducing market barriers to solar.

Another $120 million per year through 2025 would be directed toward wind power improvements, with a similarly broad mandate for the Department of Energy on how to spend it. Areas of investment could include new materials and designs to improve efficiency and lower costs for both onshore and offshore wind turbines as well as integrating wind power at the transmission, distribution, microgrid and distributed energy system levels.  

Energy Storage 

Energy storage — a category that ranges from behind-the-meter batteries to massive hydropower projects — appears in multiple parts of the Senate bill. Several of the storage provisions were introduced by Sen. Maria Cantwell, D-Washington, including a regulatory change to smooth permitting of a pumped hydro project in eastern Washington state and $50 million per year through 2029 to bolster ongoing DOE research on improving grid-integrated energy storage. 

Another section of the Senate bill would direct a combined $180 million per year through 2025 for a set of DOE energy storage programs ranging from near-term demonstration projects to better recycling of battery materials. The funding includes $100 million per year for a new Energy Storage Research, Development and Deployment program, meant to research improvements in technologies ranging from distributed batteries to compressed air energy storage. Another $100 million per year is directed toward a grant program meant to find and fund pilot projects by 2023, while $50 million per year is earmarked for long-duration energy storage demonstrations.  

This level of funding represents a boost from the Trump administration’s proposed $158 million in advanced energy storage research and development this year, although it’s not as high as the roughly $300 million per year that DOE spent on energy storage in 2015 through a variety of programs including ARPA-E and research at its national labs. It’s also a helpful sign to an industry that’s so far been unable to get an energy storage tax credit passed through Congress.

Grid Modernization 

Sen. Cantwell also shepherded a combined $300 million per year in funding through 2029 on DOE programs aimed at modernizing and securing the power grid — including testing for cybersecurity vulnerabilities in the equipment and components being installed on it. 

Under the bill’s Enhanced Grid Security section, DOE would spend $100 million per year on new programs to “identify, enhance, and test supply chain vulnerabilities and response capabilities between the DOE and other agencies, national labs, and private industry.” The security challenges it’s meant to address range from helping small utilities and hardware and software vendors to secure their systems, to addressing concern from Congress over the potential security risk of Chinese-made electronic components. 

Another $200 million per year will fund a series of DOE grant programs aimed at demonstrating how energy storage, microgrids and distributed energy resources such as EV chargers and behind-the-meter batteries can be integrated into today’s power grids. As befits the complexity of the subject, the bill splits this work up into several categories. 

One program is seeking distribution-grid-level technologies that can “increase observability, advanced controls, and prediction of system performance,” as well as successfully integrate at least two different forms of distributed energy resources, while another calls for investment into  “hybrid microgrids” with both fossil-fueled and renewable generation, that can power communities that are isolated from the larger grid. 

On a broader scale, the bill calls for DOE to work with utilities and grid operators to develop “model grid architectures” that could serve as templates for those seeking to modernize their operations, along with work on technology standards development to support the interoperation of the power system controls and communications systems involved.