Approximately 40 percent of cumulative carbon dioxide emission reductions needed to meet sustainability targets rely on technologies not yet commercially deployed on a mass-market scale, according to last year’s Special Report on Clean Energy Innovation from the International Energy Agency.
Intent on lowering that percentage, both the Senate and House earlier this week introduced bipartisan legislation to rapidly scale up and diversify emerging energy technologies. On July 27, Sens. Mike Crapo (R., Idaho), ranking member of the Senate Finance Committee, and committee member Sheldon Whitehouse (D., R.I.) introduced the Energy Sector Innovation Credit (ESIC) Act, or S. 2475. The credit, according to Crapo’s office, is a technology-inclusive, flexible investment tax credit (ITC) or production tax credit (PTC) designed to promote innovation across a range of clean energy technologies, including generation, energy storage, carbon capture, and hydrogen production.
Cosponsors include fellow committee members Sens. John Barrasso (R., Wyo.) and Michael Bennet (D., Colo.) and Energy and Natural Resources Committee members Sens. Jim Risch (R., Idaho) and John Hickenlooper (D., Colo.).
Also on July 27, House Ways and Means Committee members Reps. Tom Reed (R., N.Y.) and Jimmy Panetta (D., Calif.) introduced the lower chamber’s companion bill as H.R. 4720.
A word from the sponsors: “If we are to meet long-term emissions targets without sacrificing affordable electricity, we need to invest in on-the-horizon technologies that can accomplish our environmental goals, create good-paying American jobs, and meet our energy demand,” Crapo said. “ESIC will incentivize technology-wide clean energy innovation so new, clean technologies can rapidly scale up and compete independently in the market. Moreover, ESIC automatically scales down credits as technologies’ market penetration ramps up, so taxpayer dollars do not subsidize market-mature technologies.”
Risch said, “ESIC will advance us toward the goals of energy independence and a clean energy future by ensuring that nuclear, hydrogen, geothermal, and other groundbreaking technologies play a key role in our energy mix.”
A closer look: ESIC, say its backers, will do the following:
- Promote clean energy innovation by allowing up to a 40 percent ITC or 60 percent PTC for low market penetration technologies across a range of energy sources.
- Phase out credits as technologies mature, which provides an on-ramp for the most innovative technologies to get to market and then compete on their own, rather than allowing Congress to pick winners and losers when temporary credits expire.
- Group technologies substantively different from one another as determined by experts at the Department of Energy, national labs, and other stakeholders.
- Provide flexibility for unforeseen clean energy technologies to be eligible for ESIC by including an expedited-consideration provision for Congress to take up new technology recommendations from the DOE.
For yet a closer look, a five-page section-by-section description of the bill is available here.
ESIC exponents: The new legislation is supported by a wide array of industry and environmental groups, including the American Public Power Association, the Clean Air Task Force, ClearPath Action, the Nuclear Energy Institute, the Nuclear Innovation Alliance, NuScale Power, Oklo Inc., Third Way, the U.S. Nuclear Industry Council, and Xcel Energy.