The American Council on Renewable Energy (ACORE) has said that a proposed transmission investment tax credit (ITC) in the US could spur US$15.3 billion of fresh investment in clean energy and enable an extra 42GW of wind and solar capacity to come online.
A report published this week by the trade association states that an ITC could lower consumers’ power costs and that it is “necessary” to encourage the construction of high-voltage transmission infrastructure across the country.
Gregory Wetstone, ACORE’s chief executive, said that grid expansions and updates will be “essential to reducing carbon emissions, but we aren’t yet building nearly enough of the large-scale transmission projects we know we’ll need as we enter a critical period for decarbonising our economy and accelerating the transition to renewable energy.”
The report added that a transmission ITC could create an additional 650,000 jobs and add an extra 30GW of solar and wind capacity to the US power mix, as well as providing US$2.3 billion in energy cost savings “for the lower 80% of income brackets”.
“A rapid expansion of large-scale transmission infrastructure is not just a prerequisite to meeting our ambitious climate goals,” said Wetstone. “These projects will also create hundreds of thousands of good-paying American jobs, lower energy costs for consumers, and enhance the reliability and security of our electric grid.”
In its report, the industry body analysed the potential benefit to the grid if 22 transmission projects were realised across the country that would be “likely eligible” for the ITC. It said that an additional 42GW of capacity could come online if all 22 were completed, and 30GW if a weighted average of 80% of AC projects, 20% of DC projects, and 100% of offshore wind interconnection lines are successfully completed.
President Biden proposed a Transmission ITC in his American Jobs Plan earlier this year, after several proposals were made for the tax benefit over the past two years. US Senator Martin Heinrich first proposed an ICT for transmission in December 2019, which was updated in March this year. Congressman Steven Horsford also introduced companion legislation to Senator Heinrich’s bill in June 2020.
Horsford said in a statement that ACORE’s report “demonstrates the widespread benefits of a transmission ITC for our economy, environment, and electrical grid.” Investing in transmission, he said, will “create jobs, lower energy costs, and help the United States meet our ambitious clean energy goals.”
Lawmakers in the US have started to pay more attention to grid improvements and expansions in recent months as part of a wider goal to decarbonise the grid my 2035. The Department of Energy (DOE) said in late April that it has earmarked US$8.25 billion in loans to support grid transmission improvements as more renewables are added to the country’s power mix, while the Federal Energy Regulatory Commission (FERC) announced a string of initiatives including tightening a transmission incentive policy for utilities and a workshop in September that will explore how companies can benefit from grid-enhancing technology.
Biden has also included a 10-year extension for ITCs for both clean power generation and energy storage as part of a US$2 trillion infrastructure investment plan.