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U.S. utilities want protection from Biden's tight timeline in clean energy mandate

(Reuters) - The U.S. power industry is willing to comply with a proposed requirement that it eliminate carbon emissions by 2035 as long as it has flexibility on how to achieve that goal and the ability to miss compliance deadlines that prove unrealistic, according to the nation’s top electric utility lobby group.

FILE PHOTO: A wind farm shares space with corn fields the day before the Iowa caucuses, where agriculture and clean energy are key issues, in Latimer, Iowa, U.S. February 2, 2020. REUTERS/Jonathan Ernst/File Photo

The comments underscore concerns in the U.S. power industry that President Joe Biden’s goal to quickly eliminate the power sector’s emissions will require breakthroughs in clean energy technology that may not materialize in time – like long-duration battery storage for wind and solar power, advanced nuclear plants, and carbon capture projects.

“We need those technologies, and they don’t exist,” said Emily Fisher, senior vice president of clean energy at the Edison Electric Institute.

The Biden administration has vowed to bring the power industry to net-zero carbon emissions - which is reached when the amount of greenhouse gas produced and the amount removed from the atmosphere are the same - by 2035 as part of a broader strategy to fight climate change. To make that happen, earlier this month the White House included a so-called Clean Energy Standard in its $2 trillion infrastructure plan.

Such a regulation, which would need to be passed by Congress, would set gradually rising targets for the power industry to cut emissions until they hit net-zero, employing a wide range of methods from adopting wind and solar power, using nuclear energy, or sucking up greenhouse gases from fossil fuel plants before they reach the atmosphere.

Several lawmakers have already proposed bills along those lines, including U.S. Senator Tina Smith and Representative Frank Pallone, both Democrats, and Republican Representative David McKinley.

But the details will be crucial, Fisher said. She said the group would support a plan, for example, that allows utilities to earn bankable credits for over-achieving in early years that could be used for compliance in later years when progress becomes more difficult.

She added that EEI also supported a provision in Pallone’s bill that would allow utilities to apply for one-year extensions to their compliance deadlines, for up to five years, to account for the possibility that vital technology is either unavailable to too costly.

With that kind of flexibility, a Clean Energy Standard could be embraced by the industry, she said: “A well-designed CES makes some sense for us.”

The White House did not respond to a question about whether Biden would sign a bill that allowed for extensions to target compliance dates.

EARLY WINS

Many utilities already have their own plans to remove carbon from their systems, but most boast timelines a decade or more beyond 2035. More than half of U.S. states also have gradually increasing renewable or clean energy mandates.

American Electric Power Company Inc, one of the largest U.S. power companies, has committed to achieving net zero emissions by 2050. In a statement, it called Biden’s 2035 timeline “an ambitious challenge that will require a significant acceleration of research and technological breakthroughs.”

Dan Reicher, a former Department of Energy official who is now a researcher at Stanford University, said progress in clean energy means Biden could have an easier time than former President Barack Obama in tackling emissions from the power sector.

Obama’s Clean Power Plan, which was imposed through the Environmental Protection Agency without the backing of Congress, was blocked after Republican states challenged it in court as federal overreach.

“It’s easier now to imagine as a utility that you could actually decarbonize at a reasonably cost-competitive fashion,” he said.

The electricity industry accounts for nearly a third of U.S. carbon dioxide emissions, and its transition to cleaner fuels is considered critical to making it easier for other large parts of the economy, such as transportation and buildings, to slash their emissions.

Sam Ricketts, a co-founder of Evergreen Action - a group that proposed a CES plan in February, said utilities should worry less about the 2035 timeline and focus on early wins.

“The most difficult part of the grid to decarbonize is that last 10%. Rather than fight about that, let’s talk about what we can do now to get to that 80% reduction,” he said.

Reporting by Nichola Groom in Los Angeles and Valerie Volcovici in Washington; Additional reporting by Timothy Gardner in Washington; Editing by Matthew Lewis

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