Breaking down the Green New Deal

For the most part, cleantech policy battles in the United States are being fought state by state, with all the painstaking coalition- and consensus-building that requires.

It was in this context that the Green New Deal burst into public consciousness this past December. The GND is a proposed strategy for tackling climate change that combines a job guarantee and green stimulus package to decarbonize energy, transit, agriculture and industry.

With limited exceptions, clean energy advocates are enthusiastic about this strategy. But what would the specifics be, and what would the deal mean for the players who are currently shaping the energy transition?

Political feasibility aside, there are many unanswered questions about what a Green New Deal would mean for clean energy. Broad regulatory change and federal stimulus could drive the continued growth of cleantech, but specific policies could result in big wins — or losses — for industry players.

Below, analysts suggest some policies that could emerge as part of a Green New Deal, and the implications of those policies for industries tracked by Wood Mackenzie Power & Renewables.The potential policies below are hypotheticals, as the draft new deal legislation has not yet been formally released. The list does not include all potential Green New Deal policies.

Green New Deal policy: Provide technical workforce training for cleantech (installation, engineering, etc.)

Dan Shreve, Director of Wind Energy Research: There are unique regional opportunities for transitioning fossil fuel focused jobs to cleantech jobs. For instance, Wyoming accounts for more than 40 percent of U.S. total coal production. Wyoming also boasts some of the nation’s best wind resources, with the Chokecherry/Sierra Madre wind project by itself representing the potential for 3 gigawatts of wind power. It will take over 100 technicians to operate that wind facility by itself. Imagine the opportunities if additional investments were made to support long-haul, high-voltage transmission to West Coast load centers.

Wade Schauer, Director of Americas Power Research: Let's say we get to 100 percent renewable energy in 2030 (or 2035). At that point, what if every solar, wind and storage installer job goes away except what is required for incremental demand growth?

Anthony Logan, Wind Energy Analyst: Limiting installer jobs to incremental demand growth is unfair. Wind and solar plants retire and need replacement just like others always have, albeit for less cost and labor pull.

Green New Deal policy: Fund clean power infrastructure (transmission lines, EV charging, investments in public transportation, etc.)

Ravi Manghani, Director of Energy Storage Research: The Green New Deal seems to propose traditional debt investment and even an active equity role from the government. That makes sense, because one of the biggest challenges facing mainstreaming of a new distributed, clean and resilient infrastructure is the availability of patient capital.

That means that while there are several new technologies that could transform the grid for the better, very few viable business models currently exist for those technologies. For example, electric buses are almost as cheap as diesel buses on a total cost of ownership basis (and are even cheaper in some operating conditions). Yet we don’t have more than a few hundred electric buses in the entire country. Similarly, the biggest impediment to larger-scale EV adoption is the lack of widespread charging infrastructure.

Dan Shreve, Wind: Replacement and augmentation of infrastructure at a national level increases the resiliency of the grid in a time of increasing frequency of weather-driven outages, while helping the nation guard against the increasing threat of cybersecurity risks, and even driving substantial job creation.

Green New Deal policy: Ambitious renewable portfolio standards in the 15+ states that currently do not have them (or a national RPS)

Daniel Finn-Foley, Senior Energy Storage Analyst: A national RPS may be the only politically feasible way to transition the entire economy to clean energy. The issues of energy and climate have fallen victim to dramatically expanding partisan entrenchment over the past three decades, making inroads in heavily conservative states even harder.

This doesn’t mean it’s immediately feasible at the national level, but it bears repeating that any full decarbonization strategy would almost certainly require action at the federal level.

Dan Shreve, Wind: A national mandate is needed to move the needle in the fashion that is being called for by the GND. The RPS dynamics that have driven demand over the past 10 years can only go so far, with states like New York and California leading the nation.

Green New Deal policy: Simplify the process for siting and permitting of renewable energy projects

Daniel Finn-Foley, Storage: Interconnection requests, studies and processes, both at the transmission and distribution level, are often cited as one of the key drivers of time and cost facing storage developers today. A top-down reform of the interconnection process would grease the wheels significantly and provide storage with a surer footing.

Austin Perea, Senior Solar Analyst: If part of the Green New Deal involved putting in place simpler, national-level permitting standards like those that exist in Australia, we could see a substantial reduction in the price of solar that would most certainly increase adoption simply on a cost-competitive basis, which also means an increase in jobs and gets us that much closer to our ambitious renewable energy targets.

Green New Deal policy: A moratorium on constructing new fossil fuel infrastructure (including natural gas)

Daniel Finn-Foley, Storage: If you live in New England, you might be forgiven for thinking this regulation already exists! Pipelines of all kinds are facing increased pushback at the local level. Federal guidance on them would likely affect extraction operations as logistical challenges and transport constraints impact the bottom line.

Dan Shreve, Wind: An all-out war on fossil fuel development is not in the best interest of anyone, especially renewable energy developers.

Daniel Finn-Foley, Storage: It’s true that even if an effort were made to fully transition to electrification of heating, it would take enough time that pipeline infrastructure would need to be reviewed and potentially replaced to meet heating needs safely. Any moratorium would have to include clauses for updating existing infrastructure for reliability and safety.

Wade Schauer, Power: Carbon capture and storage currently costs $10,000 per kilowatt, and there aren't very many places to inject the captured CO2 underground. It only makes economic sense for enhanced oil recovery, which kind of defeats the purpose. CCS technologies may have merit, but they won't be in a position to contribute to any 2030 or 2035 targets in a meaningful way.

Green New Deal policy: Subsidized smart grid and efficiency retrofit programs for homes and small businesses

Fei Wang, Senior Grid Edge Analyst: Energy efficiency is not generating as much excitement as other grid edge topics these days, but there is a great amount of work to be done there. This could involve more stringent and better-defined efficiency standards for buildings in all sectors and grades associated with property value (think mandatory efficiency performance disclosures for real estate listings in Europe).

The hardware, software and labor required to push buildings to become more efficient are all part of the wider landscape of cleantech jobs, which would overlap with manufacturing and construction as well.

Green New Deal policy: R&D stimulus geared toward cleantech (grant programs through the DOE, etc.)

Daniel Finn-Foley, Storage: According to a 2001 national academies study, every dollar spent on DOE-led R&D efforts resulted in $20 of economic benefits. As DOE efforts in the intervening years have accelerated job growth in renewable energy, led innovation of low-watt lighting, and spurred other efforts that have resulted in massive job gains and energy savings, it’s not hard to imagine this 20x multiplier being even higher today.

Given this, it’s easy to understand why China’s energy R&D budget is nearly three times that of the U.S. as a percentage of GDP, and it's growing each year. DOE stimulus is a proven economy enhancer, so further investment is a no-brainer to create more jobs and save consumers money on their electric bills.

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