What the Bipartisan Infrastructure Bill means for the US energy landscape

A group of senators has released a $1.2 trillion Bipartisan Infrastructure Framework designed to make transformational investments in energy, transport, clean water and broadband infrastructure.

The historic Senate bill focuses less on renewables, although it does outline some provisions for solar, pumped hydropower storage and green hydrogen. Interestingly, the bill targets carbon capture and storage and nuclear power, key areas of development for utilities.

Now it remains to be seen whether the legislation has enough support from both Democrats and Republicans to push it across President Joe Biden’s desk.

The bill focuses on the following key areas:

EV infrastructure – $7.5 billion

$5 billion will be allocated for states to build out EV charging infrastructure, with $2.5 billion available for building out alternative fuel corridors, which includes EV infrastructure but also hydrogen and natural gas fueling stations.

The implementation of electric buses and the development of relevant transit systems to support these buses will receive an investment boost of $7.5 billion.

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In order to prevent the reliance on a China-dominated supply chain, the bill eases permitting for critical mineral production and recycling in-territory, and it provides $200 million in funding for three demonstration projects aimed at processing battery inputs, constructing a commercial-scale battery material processing facility, and retooling or retrofitting an existing battery material processing facility.

Power infrastructure including grid authority – up to $73 billion

The bill requires states to ensure their grids are amenable to the wider deployment of electric vehicles.

Besides EV’s, transmission investment is also emphasised to increase the share of renewables on the grid, lower costs and improve the grid’s overall efficiency and reliability. Up to $11.6 billion in funding will be availed for technology, including transmission, to bolster the reliability, resiliency and flexibility of the power grid.

The bill requires the energy secretary to examine pain points in the country’s electric grid and designate particular areas as “national interest electric transmission corridors.” This will facilitate approvals that improve grid reliability if local authorities aren’t doing so independently.

A revolving $2.5 billion Transmission Facilitation Fund will be created through the bill, providing federal assistance to states and localities to maintain electric reliability.

Carbon Capture – $12 billion

The bill would expand federal programs and spending for CCUS by roughly $12 billion. Investments would be used to establish a Department of Energy program for funding the development of up to 20 new or expanded large-scale CCUS projects.

Additionally, the bill incorporates the SCALE Act legislation aimed at facilitating buildout for networks of carbon capture facilities. The bill language includes requirements that some of the projects be located in fossil fuel regions or natural gas power plants. The bill also establishes a $5 billion low-interest loan program at the DOE for building out CO2 pipeline transport – with the mandate that steel and other products must be produced in the US.

Hydrogen – $8 billion

The bill provides $8 billion in funding through 2026 for creating new hydrogen research, development and deployment programs at the Department of Energy. That includes a new program to support developing regional clean hydrogen hubs, at least one of which must demonstrate the production of hydrogen from natural gas with CCUS, according to news sources.

The bill also amends the Energy Policy Act of 2005 to define “clean hydrogen” to include hydrogen produced from natural gas with CCUS.

Nuclear power – $12 billion

The legislative package targets ageing power plants and new small modular reactors. It sets aside $6 billion for the Department of Energy to spend on nuclear facilities due to be shut down due to economic stress. It also sets aside $6 billion in funding for microreactors, small modular reactors and advanced nuclear reactors.

The bill will likely face several rounds of amendments, according to reports, although senators are keen to wrap up before August recess. Furthermore, this bill will form the basis for the upcoming $3.5 trillion “human infrastructure” bill, designed to drive the fight against climate change.