UPDATE: US Senate passes infrastructure bill; offshore, utility-scale wind will reap dividends

UPDATE: By a vote of 69 to 30, the US Senate on 10 August passed the $1.2-trillion infrastructure plan, HR 3684, which will now move to the House of Representatives.

"Today, the Senate takes a decades-overdue step to revitalize America's infrastructure and give our workers, our businesses, our economy, the tools to succeed in the 21st Century," Majority Leader Chuck Schumer, Democrat-New York, said from the Senate floor prior to the vote.

Less than a fortnight earlier, 17 Republicans joined the 50-member Democrat caucus in the US Senate on 28 July to vote 67-32 to limit debate on the infrastructure legislation, shortly after 10 Republican and Democrat lawmakers brokered a deal following weeks of negotiation on its substance and related funding.

The bipartisan US infrastructure bill containing $73 billion for modernizing the nation's grid could prove to be a boon for offshore wind as well as utility-scale wind projects, according to IHS Markit analysts.

The "Investing in a New Vision for the Environment and Surface Transportation in America Act,'' or the ''INVEST in America Act,'' would inject $500 billion in new funding. The investments include creating a national network of electrical vehicle (EV) charging stations, purchasing zero-emissions buses, and shoring up its roads, bridges, and transit as well as water and wastewater infrastructure including ports against the vagaries of climate change.

President Joe Biden has called the bipartisan infrastructure bill "the most significant long-term investment in our infrastructure and competitiveness in nearly a century," while ruing that neither side got all it sought.

During a 10 August conversation on Biden's Build Back Better economic agenda with nonprofit EarthDay.Org, US Environmental Protection Agency Administrator Michael Regan described the bipartisan infrastructure legislation as "game changing for all Americans, and all working families."

"It makes historic investments in our manufacturing capacity, our workforce, our infrastructure, and it tackles the climate crisis by making the largest investments in clean energy transmission and EV infrastructure in history," Regan said, noting that many of the climate impacts disproportionately affect communities of color and low-income families.

Granholm for her part pointed out that the global clean energy market is projected to reach at a minimum $23 trillion by the end of this decade.

"If we act, the US acts, to corner the market, we will be creating millions of good paying jobs while deploying clean energy solutions in every pocket of the country," Granholm said.

Wind wins

Utility-scale and offshore wind farms as well as battery manufacturers are likely to see more immediate benefits from the bill's passage because electricity infrastructure upgrades will enable easier integration of intermittent renewable generation into the grid, Conway Irwin, IHS Markit's cleantech research director, and Peter Gardett, the company's cleantech and climate executive director, wrote in a 30 July note.

The bill also directs the creation of a Grid Development Authority to oversee grid upgrades.

Improving the grid is clearly a bipartisan issue, as it has been mentioned by many members of Congress in hearings in the last few months.

"In May, the North American Electric Reliability Corporation's summer reliability assessment confirmed what California grid operators were also reporting that the state remained at risk of energy emergencies during normal summer demand, and high risk if weather events cause above-normal demand across the West," said Representative Cathy McMorris Rogers, Republican-Washington, at a House Energy and Commerce Committee hearing on 28 July.

"Texas and Louisiana, the upper Midwest, and New England are all at risk if a major weather event drives up power demand, according to the report," she continued. "What will happen if current unreliability trends continue?"

A more reliable and expanded grid could also be a "powerful engine" behind increased capital spending towards major projects designed to bring wind power from large farms in rural areas or offshore as they match with grid capacity and interlinks to load centers, Irwin and Gardett wrote.

Also benefiting from the bill's emphasis on electrification including the sizeable investment in public transit and EV infrastructure would be clean-tech entrepreneurs who are looking to invest in battery storage

The bill also includes what the Carbon Capture Coalition called "groundbreaking" provisions to help finance the buildout of CO2 transport and storage infrastructure, as well as funding support for commercial-scale demonstrations and studies for carbon capture, direct air capture, and carbon utilization technologies. For the first time, this bill would establish regional hydrogen and direct air capture hubs, according to the coalition, which represents 80 organizations and companies that back GHG capture and storage projects.

The bill includes funding for the following key items:

• $73 billion for clean energy transmission including lines to accommodate renewables, research and development into advanced transmission and distribution technologies, smart grid, and demonstration projects into nuclear, carbon capture. and hydrogen.
• $7.5 billion for a national EV-charging network.
• $5 billion to acquire zero-emission buses and low-emissions buses and another $2.5 billion for low-emissions ferries.
• More than $50 billion for shoring up resiliency against extreme events like droughts, floods, and wildfires that are affecting various parts of the country.
• $21 billion for environmental remediation, including capping orphaned natural gas wells and reclaiming land around abandoned mines.

The EV infrastructure spending and EV credits dovetail nicely with Biden's challenge to automakers on 5 August to produce half of their new light-duty vehicles as EVs by 2030. Having a nationwide, reliable, and fast charging network is considered critical to building consumer acceptance for EVs.

When the 28 July agreement was announced, Biden acknowledged that "neither side got everything they wanted in this deal."

For instance, the bill excluded the $20 billion that Biden had sought in his American Jobs Plan to set up a national infrastructure bank, which banks and equity funds were eagerly anticipating,

"Designed to leverage federal dollars through public-private partnership models, the bank would potentially generate extensive business for lenders and investors able to take on riskier projects with implicit federal backing on their first tranche of potential losses," Irwin and Gardett wrote.

The bank proposal, however, fell apart on opposition to labor standard requirements legislators wanted to add for federal-backed projects.

Speaking after the bill passed the Senate, Edison Electric Institute President Tom Kuhn tied the bill to EVs. "This legislation also would provide a good down payment on the electric vehicle charging infrastructure and low/no-emission buses that we need to accelerate the electrification of the transportation sector, which currently is the largest source of carbon emissions in the US economy," he said in a press statement.

The legislation authorizes myriad studies including, having the Government Accountability Office report on the avoided impacts on property and life through the use of model, consensus-based codes, standards, and provisions that support resilience to climate risks and impacts, including flooding, wildfires, hurricanes, heat waves, droughts, rises in sea level, and extreme weather.

Next steps

Biden maintained the bill's provisions would be paid without raising 1 cent on people making below $400,000 per year. That means, "no gas tax increase and no fee on electric vehicles," he added.

In an accompanying factsheet, the White House further elaborated, saying the bill's prodigious spending would be met through a combination of redirecting unspent emergency relief funds, targeted corporate user fees, strengthening tax enforcement when it comes to crypto currencies, and other bipartisan measures as well as revenue generated from higher economic growth as a result of the investments in infrastructure.

For now, Schumer is determined to not only get the infrastructure bill passed, but also the $3.5 trillion budget reconciliation resolution that lays out spending priorities for the fiscal year.

In his opening floor remarks 29 July, Schumer made it clear that it has been his goal to pass both the $1 trillion bipartisan infrastructure bill and the budget resolution for mostly climate innovation initiatives contained in the American Jobs Plan.

"Because of the vote last night, the Senate is now moving forward with the bipartisan infrastructure bill and both elements of the two-track strategy before we adjourn for August recess," Schumer said.

Senate Minority Leader Mitch McConnell, Republican-Kentucky, though supportive of the infrastructure bill was dismissive of the $3.5 trillion budget resolution bill. Calling it "a mess" that contains "big chunks of the Green New Deal," McConnell warned that it would lead to painful inflation.

If they pass the Senate, both bills would head over to the US House of Representatives where Speaker Nancy Pelosi, Democrat-California, has indicated her support. However, Pelosi has been adamant that she will support both bills as a package, not just the bipartisan infrastructure bill.