Two radically different paths for the power sector

This summer, the climate and energy research group Energy Innovation analyzed Republican and Democratic policy papers to map the parties’ approaches to the clean energy transition. 

Not surprisingly, “the two paths that we have before us are starkly different,” said Energy Innovation CEO Sonia Aggarwal on an election day episode of With Great Power. Aggarwal formerly served as special assistant to the President for climate policy, innovation, and deployment, where she worked on the Inflation Reduction Act.

According to Energy Innovation’s analysis, a Harris administration that continues to amplify Biden’s climate policies could put the U.S. on a 2030 trajectory to slash emissions by half compared to 2005, create 2 million new jobs, and prevent 4,000 early deaths from lowering pollution.

Meanwhile, its analysis of Project 2025 — the 920-page conservative policy initiative co-authored by former Trump administration officials and conservative think tank The Heritage Foundation — predicts a second Trump administration would send the clean energy transition into a backward slide. 

Aggarwal said that four more years of Trump could put the U.S. on a 2030 trajectory to emit billions more tons of carbon dioxide, eliminate 1.7 million jobs, and cause 2,000 additional early deaths from increased air pollution.

Project 2025 also calls for axing the Inflation Reduction Act, the largest U.S. climate law ever passed. And Trump — who has tried to distance himself from the controversial policy plan — has said he will “rescind all unspent” IRA funds. 

But the law has proven to be “really good for business, and it's also really good for people.” Repealing it would be bad policy — and likely bad politics. Eighteen Republican representatives sent a letter in August to House speaker Mike Johnson, noting the energy tax credits from the IRA “have spurred innovation, incentivized investment, and created good jobs in many parts of the country.” 

Reimagining the grid

Whatever the outcome of the election, the power sector will continue to evolve quickly as electricity demand rises quickly and utilities commit to net-zero targets. Aggarwal outlined ways energy industry leaders could reimagine existing infrastructure — including overhauling existing U.S. power plants that run intermittently.

“They found kind of a staggering result, in my opinion,” she said. “If we just use those existing interconnections, building clean energy around those and injecting that into the grid, we could approximately double the capacity of the entire United States grid.”

A 50-year-old coal power plant in central Minnesota is already in line for the change. The Sherco coal-fired plant in Becker, Minn. will be shuttered within five years, and Xcel Energy is planning to send power from a massive solar project to the grid through its existing connection.

Earlier this year, Energy Innovation released a study it conducted with GridLab and UC Berkeley researchers on the potential for refitting existing power lines with advanced conductors. Their study found that reconductoring could quadruple the pace of transmission development, while cutting the cost of a 90% clean grid by $85 billion by 2035.

Reconductoring is a somewhat complex process, Aggarwal noted. State-level regulatory barriers often stand in the way of existing infrastructure upgrades. But it offers a path to cleaner energy that political change can’t touch. 

“I really am quite bullish about existing interconnections and what more we can get out of them,” Aggarwal said. 

To keep the U.S. on track to meet its emissions reduction target, the Energy Innovation analysis showed one clear path: continuing the current energy policy trajectory.

“When President Biden took office, we were on track for about 25% emission reductions in 2030, compared to 2005 levels,” Aggarwal said. “We are now on track to cut emissions by 40% in 2030. [Biden] set a goal for cutting emissions by 50-52% by 2030, and that really is the target that we still have in our sights at Energy Innovation and in much of the climate community.”

For the full conversation with Sonia Aggarwal, listen to her interview on season 4 of With Great Power.

This is partner content, brought to you by GridX. It borrows from an interview that appeared on With Great Power, a Latitude Studios partner podcast.

With Great Power is a show about the people building the future grid, today, produced by Latitude Studios for GridX. Follow on Apple, Spotify, or wherever you get your podcasts.

Transcript

Brad Langley: Well, we made it. It's election day after all the ads and debates and polls and robocalls, Americans head to the ballot boxes today, and although it's unlikely we'll wake up tomorrow knowing the election results, we do know that US energy policy over the next four years will look dramatically different depending on the outcome. Nobody knows this better than Sonia Aggarwal.

Sonia Aggarwal: On one side, we have a continuation and strengthening of the policy leadership of the last four years, and this policy suite has generated half a trillion dollars in new private investment.

Kamala Harris: While I have been vice president, we have invested in clean energy to the point that we are opening up factories around the world.

Sonia Aggarwal: On the other side, we have concepts of gutting climate and environmental protections, restricting access to clean energy and a ton of uncertainty for businesses that have already been starting these large scale investments in America over the past few years.

Donald Trump: As president, I will end the Harris-Biden War on American Energy on day one. Remember, we have more liquid gold under our feet than any other nation in the world.

Brad Langley: Sonia Aggarwal is the CEO of Energy Innovation.

Sonia Aggarwal: We're a nonpartisan energy and climate research organization that works with policy makers on policy design to advance our climate goals.

Brad Langley: Sonia spent the early years of her career moving between NGOs and the private sector supporting renewable energy deployment, but it took watching early climate policies fail in Washington DC to drive her to co-found Energy Innovation in 2012.

Sonia Aggarwal: We thought to ourselves "We're a little bit adrift and we don't have time to keep trying things that are not advancing the ball. How can we start to really use research and analysis to understand at a granular level where climate emissions are coming from in all the different energy sectors, and then identify policy solutions that would really target those specific sources of emissions?"

Brad Langley: Today, more than a decade later, and with a team of nearly 45 people, Energy Innovation is a leading source of climate policy analysis. Big players in the policy sphere, even those as high up as the White House, have sought out Sonia for her insights. But growing up back in the nineties in Ohio, Sonia never would've imagined this path for herself. She was actually on track to pursue math or science until a guest lecturer in her college astronomy class showed up one day.

Sonia Aggarwal: As part of his lecture, maybe about halfway through this hour-long class, he just started to mention that because we were adding CO2 to the atmosphere since the Industrial Revolution, we were changing the climate here on earth. He described this intensification of extreme weather patterns that scientists were expecting to see as a result of all of this new CO2. I remember just stopping in the middle of class and saying to myself, "Wait, what? This seems like an incredibly big deal."

Brad Langley: It was a big enough deal that it changed her career trajectory entirely. In 2021, Sonia answered a call from the White House and spent the next two years advising the Biden administration on climate policy. It meant taking a hiatus from Energy Innovation, but Sonia says it was all worth it.

Sonia Aggarwal: The American people voted for a president who had a bold climate vision and they expected him to deliver on that bold climate vision, and I got to be in the room as we thought through how could we most effectively deliver on that promise and make the most progress possible to address the climate crisis? That was an incredible experience.

Brad Langley: This is With Great Power, a show about the people building the future grid. Today, I'm Brad Langley. Some people say utilities are slow to change, that they don't innovate fast enough, and while it might not always seem like the most cutting edge industry, there are lots of really smart people working really hard to make the grid cleaner, more reliable and customer-centric. To kick off the fourth season of our show, we're looking ahead to the next four years of energy policy. Sonia Aggarwal and her team have spent months gaming out different scenarios based on the outcome of the election, and today she's here to guide us through them. It's no secret that the state of the economy and foreign policy have overshadowed climate change in this year's election, sometimes in surprising ways.

One recent poll actually showed that nearly 40% of registered voters knew nothing at all about the IRA, that's the Inflation Reduction Act, the largest climate legislation ever passed in US history. A lot of voters say they care a lot about the climate, but it often falls to the bottom of their priority list. Still, the outcomes for climate and energy policy would look vastly different under Trump or Harris, so it's worth digging into the details. But before we do that, I asked Sonia to give a short primer on key policies that have already shaped the energy industry and America's decarbonization pathway.

Sonia Aggarwal: A lot of people think of the Clean Power Plan, which is an effort that Obama undertook to protect public health from the pollution caused by power plants, and those standards were never fully implemented. Nevertheless, due to just the incredible economics of clean energy and lots of state action and private sector work, we met the targets of the Clean Power Plan more than a decade ahead of schedule. I think it did help to change the conversation in boardrooms across the United States and in public utilities commissions about what the future of coal was going to be. There were a lot more questions of "Are there actually cost-effective alternatives that we should be pursuing here?" That is transformative, and it really helped to kick off a lot of pollution reduction from the electricity sector.

As we moved forward in time over the last many years, we've had in place some fundamental tax credits that provide subsidies for clean energy deployment, and that has also helped us to ensure that they can overcome some of that incumbency bias that we see across the United States where utilities and other companies are used to running fossil fuel power plants that are not as used to deploying wind, and solar, and batteries, and managing a more variable grid that comes along with doing those things. Of course, the laws of the last couple of years that have been passed and the updated standards that EPA has put out, really turbocharged that baseline. We are now reducing climate pollution at more than twice the pace than we were in the 2010s, and that is due in large part to this great dynamic between technology development and deployment and policy drivers.

Brad Langley: Obviously, tremendous progress despite certain policies failing to be enacted. If we think broadly, how close have these efforts gotten the US to our commitment under the Paris Agreement?

Sonia Aggarwal: When President Biden took office, we were on track for maybe about 25% emission reductions in 2030 compared to 2005 levels. After the policies that have been enacted since he came into office, we are now on track to cut emissions by 40% in 2030. He set a goal for cutting emissions by 50 to 52% by 2030, and that really is the target that we still have in our sites at Energy Innovation and in much of the climate community. We believe that there are huge opportunities if we have the right leadership in place to still meet that goal. We have done some analysis at Energy Innovation showing the policy suite that would need to be enacted in order to deliver that goal. It's still within reach and we haven't gotten the entire job done over the last four years.

Brad Langley: Now, digging into the election, this summer Energy Innovation published a report that considered possible scenarios for electricity policy under either a second Trump administration or under a Harris administration. Based on that modeling, what are the stakes of the 2024 election?

Sonia Aggarwal: Well, the two paths that we have before us are starkly different in terms of everything from American leadership, our economy, and of course climate and clean energy. We did look at a few different scenarios in our analysis that we released recently. We looked at a current policy trajectory that takes account of where we are now based on all of the laws and standards that have been enacted over the last few years, and we compared that with a continued climate leadership scenario, which would meet our climate goals in 2030 and identifies a suite of policies across all the different sectors of the economy that could help us to do that. Then a third scenario, which modeled the climate and energy components of Project 2025.

When we looked at all of that stuff, we also were able to see what does that mean for our climate trajectory? What does that mean for household energy bills for the economy, for pollution related health impacts and deaths? We found some pretty stark conclusions. On the continued climate leadership side, a smart suite of policies could keep us on track to cut our emissions in half by 2030 compared to 2005 levels. We could, at the same time, create more than 2 million new jobs. We could also cut household energy bills by seven and a half billion dollars in 2030 alone. We could add 450 billion to our GDP annually by 2030 and prevent almost 4,000 early deaths in 2030 from cleaning up pollution. On the other side, we looked at Project 2025 and saw that by 2030 it would add about the same amount of emissions to the US economy as the entire country of Germany emits annually. That's pretty shocking given that it's only five years away that we could add that much more emissions compared to our current trajectory.

It would also eliminate 1.7 million jobs in 2030, and that's roughly the amount of people that are doctors and police officers across the United States. That's like eliminating all of those jobs. It would increase household energy bills by $32 billion in 2030. That's about $240 per household on average, and that's more than the average American pays for prescription drugs on an annual basis. It would cut our GDP by $320 per year in 2030, and that's equivalent to about three times the entire US auto industry. That is a major economic hit. It would also cause more than 2000 premature deaths in 2030 from air pollution. It is pretty stark. These two paths are incredibly different. Again, Project 2025 as we modeled it, is just the climate and energy components, things like eliminating the Inflation Reduction Act from getting rid of some of the pollution standards from the Environmental Protection Agency.

Brad Langley: Those are some incredibly staggering numbers. Maybe real quick on the off chance a listener hasn't heard of Project 2025, do you want to give just a very brief description of what that is?

Sonia Aggarwal: Yes. Project 2025 is a long—I believe, about 900-page—blueprint developed by many of the officials who worked in the Trump administration before. It was put together by the Heritage Foundation. Again, lots of connections with the folks who are former advisors to the former president and who worked across his administration.

Brad Langley: You touched on this, but maybe elaborate a little bit. How might the election outcome impact the future of the Inflation Reduction Act, the infrastructure bill or other energy policy measures? Does it just potentially eliminate it all together if it turns out that the Republicans win the election?

Sonia Aggarwal: Yeah, so I would say that when it comes to Project 2025 and what we modeled, we did look at eliminating it. In reality, I do think that we may have some resilience for these laws despite an intention to repeal them. I think especially with the investments that are being made through the Inflation Reduction Act, it's really good for business and it's also really good for people. As we're seeing some of these investments turn into jobs and turn into economic growth, I really do think that the policies underlying them become more resilient and more popular. You might've seen there was actually a recent letter from 18 members of the House of Representatives who are all Republican members, I might add, that urged Speaker Johnson to preserve the Inflation Reduction Act tax credits. We are not talking about a uniform fight here. It turns out I think that when something is working, when it's driving positive change in people's lives, when it's driving these positive economic outcomes, there are constituencies that crop up to defend those laws and those policies.

Brad Langley: What about the future of transmission and alleviating the interconnection queue? What scenarios do you see playing out based on the election outcome with those areas?

Sonia Aggarwal: I really am quite bullish about existing interconnections and what more we can get out of them. I've been heartened to see this initial analysis from some researchers at Berkeley and they looked at all of the existing power plants across the United States, looked at the existing plugs that they have into the grid, and they said, "Look, actually, these power plants are not running every single hour of the day." They found a staggering result in my opinion. They found that if we just use those existing interconnections building clean energy around those and injecting that into the grid, we could approximately double the capacity of the entire United States grid just from doing that.

There's still, of course, the challenge of getting all of that built, but it makes me a lot more optimistic that we will continue to see great progress regardless of federal policymaking. I'm quite heartened by the opportunities that are right in front of us here just within the private sector and moving forward with what makes the most economic sense, which is getting the most out of our grid, getting clean energy deployed to cut people's energy bills now.

Brad Langley: Yeah, a hundred percent. It's almost too good to be true and a no-brainer. Are there any other examples you can talk about beyond interconnections as it relates to those findings?

Sonia Aggarwal: Sure, yeah. Another report that actually came out, I believe it was over the summer, we worked on it at Energy Innovation alongside other researchers, again from Berkeley who looked at the potential for reconductoring. Reconductoring sounds like a nerdy word. What it basically means is that we have really old transmission lines across the country in most cases, just by replacing the wires that are on those existing poles with modern wires instead of the old ones, again, we could approximately double the throughput of our existing transmission grid. This is another opportunity for us to really just maximize our existing infrastructure. This requires somewhat of an upgrade, but it's not talking about greenfield project development, it's talking about trying to make the best use of all of the rights of way that have already been hosting transmission to get even more out of our grid.

Brad Langley: Yeah, it's hard to ignore the potential here. What do you foresee as some of the blockers, whether election related or non-election related, that could prevent these types of things from happening?

Sonia Aggarwal: Yeah, there's plenty, including sometimes the regulatory structures at the state level can be barriers. The way that utilities are regulated and the way that our wholesale competitive power markets operate, sometimes there can just be rules or ways of doing financial accounting, even that stand in the way of taking advantage of some of these really low cost and practical opportunities. In some ways it's a slog, but I think the more people do it, it'll be easier because there'll be more of a playbook.

Brad Langley: Last question for you, it's a bit of a fun one. We call this show With Great Power, which is a nod to the energy industry. It's also a famous Spider-Man quote, "With great power comes great responsibility." What superpower do you bring to the energy transition?

Sonia Aggarwal: Oh my gosh. I think if anything, I really like to think about systems and the dynamics that occur within systems, and I think sometimes it can be helpful to not focus on one small piece of something, but really try to step back and see how all the small pieces work together and where can you push the system in order to make the biggest change. That's just something that I really enjoy doing and that I hope can help with everyone else's work.

Brad Langley: Awesome. Well, thank you Sonia so much for coming on the show. I really enjoyed our conversation.

Sonia Aggarwal: Thank you, Brad. Thanks so much for having me. I feel like I want to ask you lots of questions now.

Brad Langley: Sonia Aggarwal is the co-founder and CEO of Energy Innovation. With Great Power is produced by GridX in partnership with Latitude Studios. Delivering on our clean energy future is complex. GridX exists to simplify the journey. GridX is the enterprise rate platform that modern utilities rely on to usher in our clean energy future. We design and implement emerging rate structures and we increase consumer investment in clean energy all while managing the complex billing needs of a distributed grid. Our production team includes Erin Hardick and Mary Catherine O'Connor. Anne Bailey is our senior editor. Stephen Lacey is our executive editor. Sean Marquand composed the original theme song and mixed the show. The GridX production team includes Jenni Barber, Samantha McCabe, and me, Brad Langley. If this show is providing value for you, and we really hope it is, we'd love it if you could help us spread the word. You can rate or review us at Apple and Spotify, and you can share a link with a friend, colleague, or the energy nerd in your life. As always, thanks for listening. I'm Brad Langley.