Comment: Investments in transportation can create thousands of jobs. It’s now
The following commentary was written by Brian Gemmell, Director of Clean Energy Development at National Grid. He is a member of the board of directors of WIRES. See our commenting guidelines for more information.
As the country strives to bring about an economic recovery from the recession caused by the COVID-19 pandemic, a targeted investment in our electricity transmission system presents an opportunity to advance our country’s fight against climate change and to simultaneously create hundreds of thousands of jobs.
In an announcement in April, President Joe Biden set an ambitious goal of reducing emissions from the country’s electricity supply by 2035. To achieve this goal, investments must be made to update and optimize the grid electric.
Today, the existing transmission network does not have the capacity to integrate all of the clean energy production already under construction. Currently, some transmission lines are overloaded, which means solar and wind power is reduced. In other words, this clean energy never gets to a home or business.
And this problem could only get worse. Analysts have predicted that demand for electricity will increase dramatically in the decades to come. A 2019 report by the Brattle Group, produced for transportation advocacy group WIRES, estimated that demand for electricity will increase by 85% by 2050 as we shift to electricity to power transportation, heating and other sectors in the near future.
To meet the ambitious clean electricity goals, we will need a large-scale grid expansion and upgrade to deliver clean energy to population centers. Investments in transportation will not only help bring clean energy online, lower costs for consumers, and improve the resilience and reliability of the grid, but they will also create hundreds of thousands of jobs to support the family. It will be a boost to the economy when we need it.
But we have a long way to go to achieve President Biden’s goals. At our current rate, we will fall short. Without the necessary transmission in place, some investments in clean power generation will never happen, and the economic benefits and jobs that this investment would create will not materialize.
A study completed this month for WIRES by the London Economic International (LEI) research group examined $ 83 billion in potential investment from approved or recommended transportation projects across the U.S. The report concluded that, at In the short term, these transportation investments would increase gross domestic product by $ 42 billion, generate $ 40 billion in local spending and create 442,000 construction-related jobs. This doesn’t even include the long-term benefits in operations and maintenance jobs, regional economic benefits, reduced carbon emissions and pollution, and clean energy jobs created by wind farms or associated solar panels.
According to the LEI report, in New York and New England alone, some $ 18 billion in new transportation investments are already approved or recommended to regulators. This could mean thousands of jobs for this region.
To make these investments a reality, federal and state policies must be updated to help meet President Biden’s 2035 goals.
What can be done in the short term? Here are some options:
Transport price: Construction of transportation projects can take a decade, forcing investors to demand stable economic policy before committing hundreds of millions of dollars to new projects.
Congress can urge federal regulators to reduce regulatory risks and encourage investors to plan, finance and build new transportation infrastructure. A reasonable return on investment will encourage investment in transportation and provide multiple benefits to customers, including increased reliability, reduced emissions and lower costs.
Improved planning process: Currently, there are major obstacles to regional and interregional transmission planning.
Regulators should consider how to integrate long-term and short-term planning, meeting the 2030 targets in the perspective of the 2040 targets and beyond. Comprehensive planning processes can identify projects that meet multiple needs at once, reducing costs and minimizing construction impacts on neighboring communities.
FERC should consider proactive reforms that address the impacts of transport electrification and heating and take into account national and regional goals. Regulators or lawmakers could adopt policies that speed up inter-regional transport projects.
Congress should also consider approaches to streamline and reduce risk in the process of site selection and authorization of transmission.
Tax incentives: The investment tax credit and production tax credit programs have spurred the development of solar and wind energy projects over the past 15 years. A similar transport investment program could motivate the private sector to tackle complex transport projects.
Our country is facing multiple challenges at the same time: slowing down climate change, hardening our infrastructure, reducing emissions from our energy system and revitalizing a sluggish economy. Investing in electricity transmission ticks all of these boxes. Let’s get started.