U.S. Congress Backs Subsidies for Geothermal and Biodiesel, Nuclear and CCS

A two-year budget bill adopted Friday by the U.S. Congress includes a number of “tax extenders” for renewable energy and nuclear technologies, as well as a “controversial tax break” to fund carbon capture technologies developed by the fossil industry, InsideClimate News reports.

The tax extenders, designed to carry on temporary tax measures that have lapsed, “will provide significant incentives for people and companies to invest in low-carbon forms of energy, ranging from residential installations of solar water heaters and geothermal heat pumps to nuclear power plants,” InsideClimate explains. The broader budget package “will keep the government open for several weeks, while also guaranteeing large increases in military and domestic spending programs for two years, and raising the ceiling on the national debt.”

ICN points to one tax break for residential geothermal heating and cooling that “should make a significant difference to individuals trying to lower their carbon footprints”, covering 30% of system costs for installations between 2017 and 2019, 26% in 2020, and 22% in 2021. The bill includes provisions for “renewable diesel”, fuel cell vehicles, electric motorbikes, and nuclear plants, but “disappointed some clean energy advocates by omitting benefits for battery storage, a growing and crucial element of the expansion of wind and solar power,” ICN notes.

The Distributed Wind Energy Association said the conclusion of the tax extenders fight would allow it to “finally refocus” on lowering costs, improving technology, and expanding adoption rather than lobbying for a tax credit extension, Greentech Media reports.

“We are preparing to launch a breakthrough small wind turbine that cuts energy production costs in half,” said Past President Mike Bergey, CEO of Bergey Windpower. “A fix to the federal tax credit issue is very timely for us.”

One industry source told Greentech the bill left out storage because Congress was only interested in extending existing tax credits, not introducing new ones. “That precluded energy storage from this discussion, despite dozens of members of Congress continuing to call energy storage the key to the future of energy and Secretary Perry calling it the ‘holy grail,’” the source said.

The extension of an existing nuclear tax subsidy “would benefit the only plant in the works,” Southern Company’s troubled Vogtle project in Georgia. The subsidy for CCS, meanwhile, holds out “complicated and uncertain benefits to costly technologies that might or might not pay off—and that are hotly debated in environmental circles,” ICN states. Earthjustice, Friends of the Earth, and Greenpeace USA argue that CCS tax credits to date “have not delivered measurable progress toward more climate-friendly uses of carbon such as permanent sequestration or utilization, and appear to only have been used to increase oil production.” Elizabeth Noll, legislative director for transportation and energy at the Natural Resources Defense Council, countered last week that “carbon capture can be a useful tool to reduce emissions of dirty power plants and industrial sources, but we need to strengthen accountability, not weaken it, to ensure taxpayer investments are benefiting them.”

“This is a climate bill, really,” added Stuart Ross of the Clean Air Task Force. “It’s really helping CCS, which the [Intergovernmental Panel on Climate Change] says we have to have because the fossil fuel industry is going to be around for some time.”

Meanwhile, the Trump administration is reportedly on the verge of gutting renewable energy and energy efficiency programs, with plans for a 72% cut to clean energy research in its 2019 budget proposal.