Project 2025 (Part 2) - Episode 96

In this follow-up episode to last week's overview of Project 2025's climate related suggestions, Paul digs deeper into some other recommendations of the conservative roadmap, including its emphasis of national security as well as its animosity toward renewable energy projects. But Paul also highlights areas where compromise may be had, outlining a few discrete areas where Project 2025 brings up interesting points.

For further reference:

"Mandate for Leadership: The Conservative Promise" - Project 2025

"What Project 2025 would do to climate policy in the US" - Yale Climate Connections

"Texas' frozen power grid is a preview of climate change disasters to come" - CBS News

Follow Paul on LinkedIn.

Transcript

This is Eight Minutes – a podcast helping you understand the energy and climate challenge in just a few minutes – I’m your host, Paul Schuster.

Last week I began to dissect what, exactly, the Project 2025 roadmap could mean for climate action. As mentioned during the episode, a full implementation of the document’s suggestions could lead to 400 billion tons of additional emissions by 2030 – so, it’s important to understand what and how Project 2025 is approaching environmental and climate action.

 In this second of the two-part series, I’ll go a bit deeper into some of the recommendations of the conservative blueprint – as well as outline a couple of areas where, maybe surprisingly, there could be room for compromise.

Eight Minutes – it’s how long it takes the sun’s rays to hit earth – or about how long a swing state voter can go without seeing another political ad on the TV … let’s get it on!

There are a couple of big themes that emerge after reading the Project 2025 document. As outlined last week, for instance, a big emphasis of the conservative playbook is to reduce federal spending, eliminate agencies and, generally speaking, shift oversight of environmental regulations to either the states or to industry, itself. 

I highlighted a few of these suggestions last week, including eliminating the Loan Program Office, The Office of Clean Energy Demonstration, The National Weather Service and others.

For other organizations, the document reimagines their role. For instance, I mentioned briefly about how Project 2025 would refocus the Office of Science, and the 17 National Laboratories that fall under that organization’s purview, to have the Office focus on defense applications and avoid climate research altogether.

Which actually highlights the second theme that really stands out in my reading of the document – that of international security. It’s a common, prevalent drumbeat throughout the roadmap that the authors believe that the US is susceptible to physical AND cyber attacks, and that the role of government should shift more toward security and less toward environmental or energy science. 

For instance, Project 2025 suggests renaming the Department of Energy to the Department of Energy SECURITY and Advanced Sciences. The authors specifically highlight how concerned that they are with international rivals such as China becoming more sophisticated in science based military pursuits – and believe that the DOE should play a leading role in counteracting that presumed threat.

Why the Department of Energy? Well, it’s because of our nuclear warhead stockpile. The DOE and the Department of Defense jointly oversee those warheads as well as the science, remediation efforts and investment into advanced nuclear.

Which means that the DOE has always had a foot in security issues – Project 2025 just makes it FAR more prominent. I mean – the vision spelled out by the authors includes five bullets (And I’ll quote verbatim, here): Providing leadership and coordination on energy security and related national security issues - promoting U.S. energy economic interests abroad - Leading the nation and the world in cutting-edge fundamental advanced science - Remediating former Manhattan Project and Cold War nuclear material sites - Developing new nuclear weapons and naval nuclear reactors 

Sensing a theme? Yeah – the Department of Energy’s mandate would shift from one focused on developing low-cost, clean technology to power and energize our homes and industry - to one far more concerned about international security.

And that theme plays out elsewhere, as well. For instance, by redirecting the Federal Energy Regulatory Commission (FERC) to assign increased importance to coal, nuclear and gas generation facilities. The reasoning as to why? To diversify the generation profile and protect the grid against physical attacks.

Since ENERGY is obviously still uber important to the growth of the economy, it’s apparent that the reimagining of these agencies toward security wouldn’t be at the COST of energy independence or dominance. Rather – it’s implied that the research, investment, regulations, oversight of the energy sector would simply be better managed BY the industry itself. In essence, the document cedes any of the responsibility of social impact (such as air or water pollution or stuff like that) to companies in favor of investing in stronger national security.

Security is also used as something of a cudgel against renewable energy projects – an area that has always rankled the conservative movement for some reason. In Project 2025, though, the document lays out a far more sophisticated roadmap on how to shift away from these generating resources.

For instance, and citing grid stability under cyber and physical attacks as a reason, the authors advocate for requiring regional transmission operators to require all renewable assets to provide intra-day backup power to meet dispatchable requirements. If a grid interruption occurs somewhere, these assets should be able to step in and assume the responsibility of keeping the power on. Not … a bad thought.

There are a couple of semantic issues I take with the idea – the first being that while cyber and physical attacks are certainly possible with regard to grid interruptions – it’s been weather related catastrophes that have had FAR more of an impact of grid conditions. If we’re concerned about grid reliability – shouldn’t THAT be a big part of the thought process?

And second – and this may just be me being ornery, but when that massive winter storm hit Texas in 2021 and shut down most of its grid – that storm took coal, gas and even a nuclear facility offline due to frozen instruments and damaged pipelines. It’s not just a renewables problem.

But let’s say that having reliable power at all times of the day is a worthy goal. Project 2025 attempts to mandate this as in the example above regarding the RTOs and storage – but it also advocates a more delicate suggestion – changing how the Levelized Cost of Energy is calculated.

LCOE is a common, widely used tool to compare generating types to each other. It basically tries to calculate the cost to generate a megawatt hour of electricity after taking into account all of the capital, operating and financing costs of the facility in the first place. Over the past decade or so, as the capital costs to install wind and solar have fallen so dramatically, the LCOE of these resources has fallen too – especially as the cost of fuel is ZERO for renewable assets. Lazard publishes a fantastic overview of the LCOE for different power generating assets every year – and renewable assets are consistently, now, the cheapest form of new electricity on the market.

However, LCOE was initially used to compare coal and nuclear plants – two assets that generated power continuously. Wind and Solar don’t do that – they’re at the mercy of when the wind blows or the sun shines. Because of that, there’s been a lot of questions on whether a traditional LCOE of wind and solar is accurately comparing those assets – or whether we should be including STORAGE into the equation in order to get a truer apples-to-apples comparison.

Project 2025, not surprisingly, advocates for such a change to the LCOE calculation – requiring the Energy Information Agencies calculations of LCOE to include firming resources when intermittent power is considered. The presumption is that this would increase the capital costs for renewable assets and make them look a lot less appealing as a grid resource.

I … don’t necessarily disagree. There ARE issues in comparing intermittent generation with baseloaded power and including firming resources such as battery storage into the equation may be a way to calibrate the playing field.

But, here’s the thing – even if you add the capital cost of storage to wind or solar … the COMBINED LCOE is still less than coal or nuclear. Renewables are STILL the low cost resource.

Which I think the Project 2025 authors realize, as they pepper the document with a lot of other roadblocks for renewables to overcome. For instance, by recalculating reserve margins to give more emphasis to dispatchable assets like gas plants. Or requiring individual new projects to bear the entirety of interconnection costs – and undoing the progress we’ve made toward socializing those costs ACROSS projects. Something that would disproportionately affect lower capital projects like solar than high capital projects like nuclear.

BUT, yes – there IS a conversation to be had about whether the LCOE calculation should change and whether we should be comparing generating assets to each other differently. That’s an area where compromise may be had with Project 2025. Similarly, the document calls for restarting processes around Yucca mountain licensing for spent nuclear fuel – a conversation that probably needs to continue though preferably during a time when Nevada isn’t considered an electoral swing state!

And there ARE some other areas where Project 2025 raises some good points and conversation may be a good idea. For instance, the document calls for shifting more of the burden of responding to natural disasters to the States – and away from FEMA. THAT … could make a lot of sense, especially as it could encourage coastal states such as Florida to invest more urgently into flooding resiliency instead of having the federal government act as a disaster backstop.

In an ideal world, there ARE places in the document where compromise could be had. A convergence of low cost renewable power with considerations toward grid reliability. A greater emphasis on nuclear – both within a national security conversation as well as regarding clean energy. Or discussions on how to position the US to benefit from the emerging clean energy economy – and to box out rivals such as China that have an economic edge so far in these emerging technologies.

But – well, there’s a reason I’m not a politician.

I’m Paul Schuster – and this has been your eight minutes.