Granholm: DOE’s big clean energy spending to come with strings attached

Energy Secretary Jennifer Granholm said the tens of billions of dollars in funding the agency is looking to pour into the clean energy sector will likely come with strings attached that require companies to create the high-paying jobs promised by President Joe Biden.

Granholm has been the leading voice in the new administration in promoting Biden's calls for an energy transition built on "good union jobs" for workers in the renewable energy and electric vehicle manufacturing sectors. The pitch has capitalized on her record as the Michigan governor who helped pull the state's automakers from the brink of bankruptcy a decade ago.

"This agency as well as the entire government gives out an awful lot in grant funding," Granholm told POLITICO in an interview. "We can make sure we require those who get the benefit of the help to be able to offer positions that allow people to have a middle-class life."

The Energy Department's budget funds the nation's network of 17 national research labs and helps companies develop and commercialize new technology. Its loan program currently has $40 billion in unspent funds that the agency can use to push its clean energy agenda, and it has launched a new Office of Energy Jobs to coordinate government efforts to help fossil fuel industry workers who lose their jobs find new work in the green energy industry.

Granholm said the loans, which under former President Barack Obama had been to fund clean energy start-ups, would now be turned to focus on speeding the deployment of clean energy sources to meet Biden's goal of eliminating carbon emissions from the power sector by 2035.

"We do know the loan program office has been criticized because it has been difficult to access, particularly on the part of smaller businesses, and it also definitionally is narrower than what would be helpful if you really wanted to focus on deployment. And it's expensive for people who apply," she said. "These kinds of things should be addressed in order to make it really effective."

That effort will be led by clean energy entrepreneur Jigar Shah, who Granholm announced earlier Wednesday would serve as director of the department's Loan Programs Office.

Though largely overlooked during the Trump administration, the loan program was a central part of the Obama administration's stimulus effort in 2009, but it became a political target after solar technology company Solyndra collapsed and defaulted on more than $500 million in federal loans.

The GOP has spent over a decade targeting the program, and Sen. John Barrasso (R-Wyo.), the top Republican on the Energy committee, referenced Solyndra at Granholm's confimration vote last week — despite the loan program's success in generating a net profit for the federal Treasury.

Granholm said the federal government had generated net revenues of $500 million under the program, but acknowledged it could be more effective. When you invest in start-up technology there are bound to be "some winners, some losers," she said, but hopefully "you have more that bring back money to the government."

She also cited the role critical minerals will play in securing a domestic supply chain for the clean energy sector — a message the administration hopes will resonate with Republicans who have called for support for the mining industry.

"For places like Wyoming, where underneath them [there are] some very critical minerals for battery production, for electric vehicles, for example, we should be responsibly mining and creating our own supply of that instead of relying on our economic adversaries who have it in their economic interest to prevent other countries from having access, to hoard the supply,” Granholm said. "It's another sort of clean energy vector that we can help to support, and I hope we will be helping to support."

Republicans in Congress have been critical of Biden's early executive actions to block the Keystone XL pipeline and pause lease sales for new oil and gas drilling on federal lands, arguing the administration is eliminating high paying jobs that won't be replaced by the renewable energy sector.

The newly created jobs office, led by Jennifer Jean Kropke, who worked on clean energy for the 770,000-member International Brotherhood of Electrical Workers, will be tasked with taking what Granholm called a "whole-of-government approach" to ensure government funding is directed to areas creating high-paying jobs.

Kropke represents DOE on the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization, which, by executive order, has until March 21 to identify government resources to "revitalize" communities where coal mines or coal power plants have closed, or other fossil resource jobs have pulled up stakes.

Granholm said DOE's role both as research backer and start-up funder will complement legislation introduced on Monday by Sens. Joe Manchin (D-W. Va.) and Debbie Stabenow (D-Mich.), that expands the advanced manufacturing tax credit.

The bill would provide $8 billion in tax credits to build recycling plants or clean energy manufacturing in places with high unemployment, and it specifies $4 billion be spent in places where coal mines or coal power plants have closed. And the companies taking the credit will have to pay the prevailing wage, a key request by organized labor.

"DOE has the opportunity to help in many ways. One is on research and development, and taking the idea and the technology to scale, but then the second is helping to deploy it. [The loan program office] is a massive tool to provide loan guarantees to businesses who would be willing to locate strategically in some of these places, in addition to the tax credit," she said. "Now you have a package of incentives that make it irresistible for job providers."