Hi John,

US greenhouse gas emissions rose by 1.3% in 2022, according to a new report released this week by the Rhodium Group, backsliding US commitments to cut emissions 50-52% below 2005 levels by the end of the decade. While 2022 was undoubtedly a banner year for clean energy investment, we have a lot of work ahead of us to get this funding out the door and deploy a diverse range of clean energy technologies to drive emissions down even further.

In this week’s On the Grid, we’ll outline some ways to speed up our decarbonization goals and the challenges standing in our way.  

On Thursday, the Bureau of Labor Statistics released an updated Consumer Price Index (CPI) report, showing a slowly retreating inflation rate of 6.5%, down by 0.1% in December. Energy prices have played a BIG role in that. As active oil and gas rigs continue to rise, we’re seeing production rise and prices fall. Energy prices have fallen for the sixth month in a row at an annual rate of 28%. US crude oil production has seen significant and consistent growth over the past several weeks, ending with 2.2 million bpd last week, a 600,000 rise since the Russian invasion of Ukraine began.

Catch up on the details with a Twitter thread thread from our resident economist, Dr. Ellen Hughes-Cromwick.

In December, a bipartisan coalition of US senators, including Senators Manchin, Risch, Barrasso, Cardin, Capito, Booker, Cramer, Coons, and Murkowski, sent a letter to the US International Development Finance Corporation (DFC) urging financial support for US nuclear technologies and advanced nuclear projects. While advanced nuclear energy has received widespread, bipartisan support in Congress, the pressure has now moved onto agencies like DFC. Over this next year, our team will help navigate these difficult conversations to remove the hurdles standing in the way of deploying safe and reliable clean energy. Ultimately, a whole-of-government approach will be necessary to meet our climate goals and ensure that we are competitive in a rapidly growing clean energy market.

Electrification is set to play a key role in decarbonization, but without a mechanism to ensure that carbon-free electricity is reliably available 24/7, our net-zero future may prove fleeting. This is where long-duration energy storage (LDES) comes into play. For a long time, other countries have outpaced American innovators and, in China’s case, have demonstrated and deployed energy storage at a massive scale. But the recent passage of the Inflation Reduction and Infrastructure Investment and Jobs Acts is changing the game, allocating $505 million for energy storage demonstration projects, $6 billion for battery manufacturing and recycling, and a production credit to incentivize strengthening the energy storage value chain.

What else can be done? We’ve outlined a series of policy recommendations based on the results of a landmark Boston Consulting Group (BCG) study, commissioned by Third Way and Breakthrough Energy, that highlight strategic investments, incentives, and policies that can grow America’s electrochemical LDES industry and create tens of thousands of jobs.

This week, the Biden Administration released the US National Blueprint for Transportation Decarbonization, outlining a comprehensive path forward to cut all greenhouse gas emissions from the transportation sector, the largest source of carbon pollution in the US, by 2050. The blueprint follows a whole-of-government approach, coordinating across multiple agencies to deploy the infrastructure, market incentives, standards, and policies we need to make ambitious emissions reductions across different modes of transportation.

But to accomplish the strategies laid out in the blueprint, we need policymakers on board every step of the way to continue expanding funding, providing incentives, defining targets, and supporting implementation plans. The trifecta of legislation from the CHIPS and Science, Inflation Reduction, Infrastructure Investment and Jobs Acts was a start, but if we hope to make aggressive cuts to greenhouse emissions, we will need to continue building upon those efforts.