The Biden administration is stepping up its efforts to distribute hundreds of billions of dollars in federal funds for infrastructure, environmental and clean energy investments in areas with economies closely tied to fossil fuel industries, known as energy communities.
Since 2021, the federal government has awarded nearly $15 billion for projects in such areas as of June 29, according to a spokesperson for the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization (Energy Communities IWG).
Those investments represent the first wave of President Joe Biden's effort to build an on-ramp to the clean energy transition for former and current energy communities. A tsunami of future potential investments into such areas is in the pipeline, with the Energy Communities IWG promoting almost $700 billion in additional federal funding opportunities stemming from the Inflation Reduction Act of 2022, the Infrastructure Investment and Jobs Act of 2021 and annual appropriations.
"There's really so much untapped potential in energy communities across the country," Ryan Berni, senior advisor for infrastructure implementation at the White House, said June 29 during an Energy Communities IWG webinar. "The president's investing-in-America agenda ... is really about investing in these communities that far too often have been left behind."
The largest awards in energy communities so far include $1.5 billion from the bipartisan infrastructure law and annual appropriations for TerraPower LLC to build an advanced nuclear and energy storage project at the site of PacifiCorp's retiring Naughton coal-fired power plant in Kemmerer, Wyo., according to the White House.
The Energy Department plans to invest up to $2 billion in the project, with private investments expected equal to that.
"TerraPower and partners will match this investment dollar for dollar," a spokesperson for TerraPower said in an email. Billionaire investor Bill Gates founded TerraPower and is the company's chairman.
Other large awards in energy communities include a $504 million loan guarantee for a green hydrogen project near the Intermountain coal plant in Delta, Utah, and $480 million in two separate grants for Ascend Elements Inc. to produce lithium-ion battery materials from recycled feedstock at a factory in southwest Kentucky, according to the Energy Communities IWG spokesperson.
In addition, the Inflation Reduction Act includes lucrative tax credits for clean energy manufacturing and generation, with some bonus incentives directly tied to energy communities. Hundreds of counties and thousands of census tracts across the US likely qualify for energy community tax incentives, with more than a third of planned renewable energy projects in those footprints, according to an S&P Global Commodity Insights analysis.
'Once-in-a-generation opportunity'
Biden created the Energy Communities IWG through an executive order during his first week in office. Since then, the working group has focused on driving investment into 25 specific areas most immediately impacted by coal plant and mine shutdowns, including the Illinois Basin, the Four Corners area of the Southwest, the northern Rocky Mountains and the Appalachian region.
The group also has focused on facilitating investment into a broader cross-section of communities closely linked to coal, oil and natural gas industries
A recent memorandum of understanding signed by Energy Communities IWG partner agencies calls for the federal government to work across silos to advance projects. That includes deploying "rapid response teams" to coordinate efforts and provide technical assistance to energy communities.
Berni highlighted the proliferation of planned electric vehicle and lithium-ion battery manufacturing facilities in such areas.
"It is happening primarily in energy communities where we're seeing these new battery and EV plants," Berni said, pointing to additional green hydrogen hubs in such areas that are likely to be announced in September. "Those investments are really starting to play out across the country."
Given the complex matrix of funding programs, "we know this can be overwhelming," Berni added. "We really want to make sure that this once-in-a-generation opportunity is taken advantage of."
To help process funding, the federal government has hired over 5,000 workers since the bipartisan infrastructure law passed in November 2021 and has announced or funded over 35,000 projects so far, according to Berni.
"We are well on our way on major programs that we outlined that are specific to energy, but also transportation and high-speed broadband and water programs that are so critical to making sure that our communities can thrive," Berni said.
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