Granholm: US administration 'all in' for decarbonisation

Thursday, 9 March 2023

One year on from Russia's invasion of Ukraine, the world is moving quickly to shift away from Russian energy sources, Granholm said.

"A year ago, it was an open question what this conflict would do to energy markets. Whether the resulting supply disruptions would push countries away from clean energy ambition.

"And today, the answer is indisputable … global investments in clean energy matched those in fossil fuel production for the very first time in 2022. New clean energy installations reached a new record, as the EU added more wind and solar capacity than any year prior."

However, the energy market volatility of the past 12 months has not yet been overcome and risks to energy security - and the resulting vulnerabilities for both national economic security - remain, she said, as the costs of climate change build up and energy demand continues to rise.

"It will take partnership between governments and private sectors to meet those challenges. A willingness to work together, even amid differing views."

Growing the "energy pie" by increasing energy diversity offers a "powerful solution" to the challenges of volatility, security, and demand, she said.

Oil and gas "will remain part of our energy mix for years to come", even under the boldest clean energy deployment projections, she said, so technologies for abating fossil emissions as well as the technologies for clean sources must be advanced. As this transition progresses, the energy mix will change.

Managed transition

Granholm called for a "managed transition" to be able to meet consumer energy demand today, "while expanding into more and more diverse sources for tomorrow". She highlighted US federal legislative actions to support such a transition, including the Bipartisan Infrastructure Law and the Inflation Reduction Act.

The USA is investing "unprecedented" amounts into decarbonisation efforts that will "unlock technological leaps forward, leading to lower costs and faster deployment" not just in the USA but worldwide, Granholm said.

"Just as we saw with solar and wind and EVs in the last decade, innovation anywhere leads to progress everywhere. We want to recapture that innovation effect, and punch through obstacles to adoption of the next generation of clean energy and decarbonisation technologies."

Granholm announced the launch by the US Department of Energy of its Pathways to Commercial Liftoff initiative to help four such technologies: clean hydrogen, advanced nuclear, carbon management, and long duration storage.

Technological, commercial, and regulatory barriers are holding back large-scale deployment but there is a path to liftoff for these "essential technologies", leading to a generational economic opportunity, she said. The first of a series of Liftoff Reports - which aim to create a common fact base and a tool for ongoing dialogue with the private sector on the pathways to commercial liftoff - is to be published next week at liftoff.energy.gov, she said.

Granholm also announced a USD6 billion funding opportunity to accelerate transformational projects for the decarbonisation of the industrial sector.

Stepping up

The US administration has "gone all in" in its support for the energy transition but is "only part of the equation", Granholm said. "To make this all work, we need the private sector stepping up - we often say these investments are private sector led, government enabled."

"There has never been a better time to invest in the future - to invest in that great, necessary solution of energy diversity and security than right now," she said.

CERA Week is organised by S&P Global and takes place in Houston, Texas.