Granholm on DOE’s next steps, gas, energy ‘carrots’

By Lesley Clark, Jeremy Dillon | 11/03/2021 07:17 AM EDT

Energy Secretary Jennifer Granholm on Capitol Hill.

Energy Secretary Jennifer Granholm on Capitol Hill. Francis Chung/E&E News

Energy Secretary Jennifer Granholm heads to a global climate change conference today as part of a U.S. delegation she says will show the world the United States is "back" on the issue, even as President Biden’s clean energy spending remains stymied by Congress and the president pushes for more oil production.

In an interview ahead of her trip to the COP 26 climate summit in Glasgow, Scotland, Granholm said she’ll be focused on several DOE initiatives at the event, including the department’s next "Energy Earthshot” aimed at removing carbon from the atmosphere. The "Carbon Negative Shot" follows similar department innovation efforts focusing on clean hydrogen and energy storage (Energywire, July 14).

Granholm echoed Biden’s insistence that there is no contradiction for the United States to back fossil fuels temporarily while calling for a transition to green energy. She also promised that DOE will “sooner rather than later” announce awardees of DOE loan guarantees.

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Granholm is among a number of Biden Cabinet officials making the trip to Glasgow as part of the administration’s effort to show that the United States is serious about tackling climate issues after four years of inaction during the Trump administration. The trip comes as the Biden administration simultaneously pushes for an increase in oil production — a move getting pushback from some environmentalists (Energywire, Nov. 2).

Granholm argued that although Biden’s climate plan has yet to clear several congressional roadblocks, including the bipartisan infrastructure plan and a larger, Democratic-only spending package, the administration hopes to plow nearly $800 billion into a green energy transition.

“I mean, that is just an absolute commitment as a nation to taking this very seriously.” Granholm said.

Though Biden’s climate plan has been pared back and no longer includes a clean energy standard that would have penalized utilities for not meeting annual clean electricity targets, Granholm insisted she’s “excited about the carrots” in the package — including tax credits that she said will spur innovation.

“We have to put our foot on the accelerator, as I said, on build, build, build clean energy technologies,” she said.

As part of that, she and presidential climate envoy John Kerry today will launch the "Net Zero World Initiative," which Granholm said has been led by the department’s national labs to help communities and countries “navigate their path to net zero, especially if they don’t have the technical ability to do that.”

The net-zero initiative aims to assist Biden’s "Build Back Better World" initiative, which aims to provide developing countries with a loan alternative to counter China’s investment in projects abroad. Biden took that initiative to the June Group of Seven Leaders’ Summit in the United Kingdom to promote a green recovery from the COVID-19 pandemic. It will help by “making sure that there’s energy diplomacy in the mix in assisting countries that we think have a significant carbon footprint, but also want to be able to be part of the solution,” Granholm said.

On Friday at the conference, she plans to announce the U.S. city that will host the international 2022 meeting of the Mission Innovation global partnership on carbon dioxide removal, one of the initiatives launched under Obama-era Energy Secretary Ernest Moniz as part of an international push to invest in technologies to combat climate change. The original Mission Innovation, launched at the 2015 Paris climate talks, was backed by billionaires like Microsoft co-founder Bill Gates and called for nations to double clean energy spending.

Granholm spoke to E&E News about her views on that initiative, natural gas, Congress, DOE’s plans, coming announcements at COP 26 and having a beer in Scotland:

Tell us a little about what you’re going to be doing at COP, what your message will be and what you will deem a success coming out of the conference.

I’ll be obviously weighing in on a lot of stuff regarding the energy transition, and making sure that we are really thinking in a smart way about how to ensure that transitioning communities can see themselves in building Energy 2.0, which is clean technologies, in addition to them having [brought] us to the industrial dance by powering Energy 1.0.

So many countries are going through the same kind of thing. How do we make sure people have baseload power, especially at a time when prices are soaring, particularly in Europe? And how do we build out for the future, this clean energy economy … and both have to happen.

I think this will be a great success because the United States really is front and center on all of this. The president, of course, saying that the United States is back is super important, but also demonstrating that commitment by talking about the framework that he has negotiated. I don’t know if we’ll get a vote this week [in Congress] or not; the bottom line is he’s got an agreement that just has some fine-tuning that’s necessary. And I think that leaders abroad recognize how far he’s come and how significant and consequential that will be for the United States to reestablish leadership in this clean energy space. And that’s really important.

President Biden has been grappling this week with reconciling his support for renewables with a global energy crunch. As it relates to natural gas, are the price hikes prompting any review of the amount of liquefied natural gas the department authorizes for export, and how do you square support for LNG exports with the transition away from fossil fuel message at COP?

The president is definitely looking at all the tools in his toolbox. He hasn’t taken anything off the table. We’ve got an interagency working group that is looking and going to be making recommendations. The natural gas spikes are particularly acute, as are winter heating prices, in the Northeast and in the Midwest. So we’re looking at solutions to be able to allow people not to feel that crunch in their homes. So stay tuned on that.

Liquefied natural gas is in great demand, especially with what’s happening, especially the United States version of it. I think it’s really important to emphasize that as we move toward our goal of decarbonizing, and as we move to our goal of making sure we eliminate methane, for example, LNG is a contributor to that, a big contributor. So we’ve got to do our own work inside the United States, both at the point of extraction and deployment. But we also must make sure that other countries are doing the same thing.

As we build, build, build this clean energy future, we recognize this is not a switch that you can turn on overnight. We want to make sure that we provide the technical assistance necessary for countries who don’t have that to be able to build out that clean technology.

Natural gas is going to be a part of this mix for the next few years. We know that because you can’t flip that switch, but we really want to be very bullish on building out clean. You can look at how you can decarbonize while you really emphasize putting your foot on the accelerator of building up the clean technologies that we already have. We need to do both.

Your predecessor, Moniz, [in 2015] attended the Paris climate talks and backed the Mission Innovation agreement for spending on clean energy research and development. Do you think the world has lived up to that agreement? And do you think it needs recommitment at COP 26?

We definitely need a recommitment to Mission Innovation. Obviously, the United States fell off the wagon in the past. Under the Trump administration, they just weren’t committed to that. You’ve got to do both: You’ve got to look to the future. We’re not there yet on getting clean baseload power everywhere. We have to have affordable, baseload, reliable power and that innovation component, which is why we are focused on these Energy Earthshots.

I’ve talked to all of my counterparts in these other countries. Everybody’s looking to "How do we crack the code on bringing a cost down for clean hydrogen," for example. How do we crack the code on bringing the cost down for long-duration utility-scale storage, so that renewables essentially become clean, baseload, dispatchable power? Without that, we’re not quite there yet. This is why Mission Innovation is absolutely fundamental to keep pushing, pushing, pushing on these technologies so that we can take them to scale and then they become affordable.

One of your first acts as secretary was to give some renewed juice to the department’s loan guarantee program. It’s also a central component of the climate spending in the reconciliation package. What is the status of the Biden administration’s efforts on the loan guarantee program, and how soon can we start seeing the program actually deploying financing to projects?

Yes, it’s a huge tool to be able to do that, obviously, and we want to make sure that we’re doing it right. So the first step, of course, was to hire Jigar Shah to be able to lead that office — who is just as impatient as I am, but who also wants to make sure that we remove the barriers to accessing the loans and that we make it so we don’t have all these upfront fees, etc. Since he has come on — really, he landed and the office started gelling in May, June, the beginning of the summer — they’ve started to see a significant increase in the interest of the Loan Programs Office since he’s been there and announced that it is open for business.

We want to fill up the entire sleeve of the dollars that are appropriated with deploying technologies, advanced technologies, looking at different ways to be able to support distributed technologies, etc.

So, to your question, you’ll have to ask Jigar. I don’t want to get ahead of him, but I know that they are coming to the end of their due diligence on a few, and hopefully, we’ll see some announcements on that very soon.

Do you expect it sooner rather than later? Anything at COP?

Sooner rather than later. That’s so specific, I know. No, we’re not announcing anything [related to loans] at COP. One of the things we are announcing at COP, though, and the president also signed this, is this support for small modular reactors in Romania. We believe that clean, baseload power includes nuclear, and these advanced nuclear reactors certainly should play a part in giving countries who are very nervous about accessing power the notion that we can do that. But again, these take a little bit of time to build, but the technology is there and ready to go. We just want to help countries get there.

The climate policies in the reconciliation package have been whittled down to so-called carrots to accelerate the clean energy transition with a lot of tax credits, a lot of spending to bolster infrastructure to support that transition. With the downfall of the $150 billion Clean Electricity Performance Program, is there any fear that the package is lacking the “stick” to back up those incentives to enforce the transition?

At this moment, I think carrots are exactly what we need. We have to put our foot on the accelerator, as I said, and build, build, build clean energy technologies. We need to double the size of the transmission grid, so the investment tax credit, for example, and building up the transmission grid and the grid deployment authority — hugely important. We have to triple the amount of clean energy, renewable energy that we put on the grid, and I would include nuclear with that. Those are massive carrots that are needed for that strategy as we look at what states are doing or what others are doing to help decarbonize.

This first tranche of making sure we build, we invest, we put people to work, we build the supply chains for those clean energy products that we have to use to generate the clean electricity, is really important. I think that emphasis is critical. That includes the batteries; that includes the electric vehicles; that includes the charging stations; that includes investments or tax incentives for geothermal, for hydropower. I mean, so much needs to happen to build out this clean energy economy, not just the generation but also the products necessary to reduce greenhouse gas emissions that that should be our focus. And that will be our focus with this massive investment. By the way, if you combine the monies that are in the infrastructure bill and reconciliation for what addresses climate, it’s close to $800 billion. That is just a massive commitment as a nation to taking this very seriously. So I’m excited about the carrots.

Any tourist plans for Scotland?

No, no tourist plans. It is all business. I shouldn’t say that; I have family in Glasgow, so I am going to have a beer with a couple of them.

This interview has been edited and condensed for clarity.

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