With every shift in national administration comes important changes. How a new presidency will affect different industries and markets is not always predictable. President Joe Biden’s energy plan will inevitably impact the energy sector, including utilities. Of course, campaign promises do not always become reality, but it’s important to understand the administration’s objectives.
With pressure from scientists and environmentalists, President Biden has promised to address climate change and prioritize clean energy. This initiative may pose challenges for fossil fuel producers and distributors. It could also result in more alternative energy job opportunities.
Read on to learn about Biden’s energy plan and how it might affect utility companies across the country.
Biden’s Energy Plans
President Biden recognizes the current and impending effects of climate change. To combat these issues, he supports the Green New Deal as the framework for his “clean energy revolution.” The Biden administration hopes to mitigate the current results of climate change and boost sustainability efforts long term.
Biden’s plans for the energy industry are multifaceted. His priorities are promoting a cleaner, safer environment through sustainability while supporting laborers and community members. When it comes to implementing this plan, the administration’s success will depend on Congress’s cooperation and support. Biden’s energy policies have several key objectives, including the following:
- To create a 100% clean energy economy in the United States by 2050.
- To invest more resources in clean energy and climate research.
- To incentivize clean energy initiatives.
- To ensure current energy infrastructure can withstand climate change.
- To develop regional plans for climate resilience.
- To recommit the United States to the Paris Agreement on climate change.
- To protect vulnerable communities against harmful pollution.
- To support industrial laborers.
Specific Goals and Milestones of Biden’s Plans
To achieve these sustainability objectives, the Biden administration has outlined many specific goals. Here are some milestones Biden and his team hope to achieve over the course of his presidency and beyond:
1. Invest in Research and Innovation
Biden plans to increase investments in sustainability innovation. He aims to begin a 10-year investment of $400 billion for environmentalism efforts. He hopes this investment will result in technological breakthroughs and reduced greenhouse gas emissions.
2. Create Clean Energy Jobs
With an increased investment in clean energy research, Biden hopes to support economic growth. He aims to create over 7 million jobs in the clean energy sector. He promises to defend workers’ rights in these clean economy jobs. This initiative should help mitigate the loss of any potential fossil fuel production and distribution jobs over the next several decades.
3. Develop an Advanced Research Projects Agency Focused on Climate (ARPA-C)
Biden intends to establish an agency focused on climate research projects, known as the ARPA-C. This organization will help support specific technology initiatives. Some included technologies are:
- Grid-scale energy storage methods.
- Nuclear reactor construction.
- Refrigerants with no global warming risk.
- Carbon-free hydrogen.
- Carbon-neutral construction materials.
- Carbon dioxide ground storage.
4. Offer Tax Incentives for Climate Solutions
The Biden administration has also noted a goal to provide economic incentives for certain sustainable efforts. Specifically, he plans to offer tax incentives for carbon capture, use and storage (CCUS) methods. This is a growing technological field, currently in the research and development stage.
5. Prosecute Polluters and Change International Trade Policies
Biden has promised to prosecute polluters and hold them accountable. He says he will direct the Environmental Protection Agency (EPA) to pursue pollution cases to the full extent of the law. He also says he will support legislation to hold corporate executives accountable. Simultaneously, he says he will impose carbon tariffs, fees and quotas on other countries if they fail to meet their own environmental objectives.
6. Support Coal and Power Plant Communities
As these changes to the energy landscape occur, Biden promises to support coal and power plant communities. He says he will secure coal miner benefits and help miners access care for black lung. He also plans to establish a task force with the goal of assisting coal and power plant communities. The task force should help create new jobs, repair infrastructure, maintain payrolls and keep hospitals open.
Possible Impacts of Biden’s Energy Plans on Utilities
This administration has set forth a dramatic energy reform plan. Biden’s impact on the energy sector will likely be significant. Of course, no president has the power to achieve everything they promise. However, many congresspeople from both political parties recognize the importance of climate change mitigation. Biden will likely achieve at least some of his objectives.
Such changes will affect utilities, but not as dramatically as you might think. It’s important to note many utility companies have already recognized the harm of climate change and pledged to reach net-zero emissions by the mid-21st century. Companies on that list include:
- Duke Energy
- American Electric Power
- Dominion Energy
- Southern Company
- Xcel Energy
These companies need time to reduce their emissions without compromising their reliability or affordability. Though climate scientists urge fast-paced change, these mid-century goals are more realistic. The new administration will not knock these companies off their feet — they’re already moving in the same direction.
Biden plans to prosecute criminal polluters and incentivize clean energy initiatives. This means alternative energy providers may be able to offer their services at reduced prices. It also may encourage utility companies to improve their own operations or invest in alternative approaches. Keep in mind, Biden’s proposed corporate tax increase will not impact utility companies, as tax expenses would only affect their consumers.
Even if Biden’s plans were decidedly harmful to utility companies, which most experts project they will not be, state-elected officials in the House and Senate will filter his proposals and strike legislation they find objectionable. Biden’s effect on electricity rates should be minimal.
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Over the next four years, the Biden administration aims to address climate change. In the process, they plan to prosecute polluters and support clean energy innovation. They’ve promised to serve those communities that will bear the impact of these efforts. Considering that utility companies have already set a course toward sustainability, consumers are unlikely to see a major increase in energy prices.
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