…there’s a faster and cheaper way to scale up clean energy: retrofitting thousands of old energy plants into an array of new green facilities. And the IRA provides an additional $250 billion to the Energy Department to help finance just that.
These facilities include everything from old power stations, transmission lines and oil wells to long-standing dams, waste sites and industrial and residential buildings. Consider this shining example: In 2010, the Energy Department lent a small firm $465 million that helped retrofit a mothballed old auto factory to build electric vehicles. The company? Tesla — now the planet’s most valuable carmaker.
To be sure, we still need to develop many new clean-energy projects, but we don’t have the luxury of ignoring what’s already built. And the “old is new” opportunities are boundless. Across the United States, scores of coal-fired power plants, complete with transmission lines, significant land and supportive adjacent communities, are shutting down. In Illinois, nine such plants are on track to become solar farms, with one facility alone hosting 190,000 solar panels on 500 acres, enough to generate electricity for tens of thousands of homes, plus a massive battery for periods when the sun isn’t shining. The largest coal-fired power plant in New England, on the Massachusetts seashore in Somerset, will soon be replaced by a factory making undersea electricity cable for offshore wind turbines and connecting a nearby offshore wind farm to the power grid.
To cut carbon emissions, natural-gas-fired turbines are being converted to burn hydrogen, increasingly extracted from water using low-carbon electricity. Old oil-drilling rigs can be repurposed to develop new geothermal wells for electricity generation, while some retired oil wells can be tapped for hot water to provide geothermal heating. According to its backers, one effort will make Oklahoma — with almost 500,000 old oil and gas wells — the “Geothermal Capitol of the Nation.”
Many thousands of miles of existing power lines can be upgraded to carry more electricity — and current rail lines and highways could provide existing rights of way for new electrical lines — thereby helping to avoid fierce battles over siting greenfield transmission. The old generators in some of the 2,300 U.S. hydropower plants can be replaced to generate more electricity, and existing dams can be retrofitted to store electricity through “pumped hydropower.” The turbines in older wind farms can be upgraded with longer blades and more powerful generators or replaced entirely with new machines. Old waste sites and surface mines can host renewable energy projects and restore damaged lands in the process. And, of course, we can renovate factories, offices and homes to use less energy — and increasingly meet their remaining electricity needs from on-site solar or wind.
Even existing nuclear power plants can be retrofitted and kept online. In California, the state legislature recently voted to support the upgrade and continued operation of the Diablo Canyon reactors, which generate almost 10 percent of the state’s electricity. And the Energy Department reported this month that old coal-fired power plants are good locations for new nuclear reactors.
The $250 billion in the IRA is key to unlocking these opportunities, especially for projects demonstrating retrofit potential with both an attractive financial upside and straightforward replicability. The government can make loans or provide loan guarantees in three areas: to retool, repower, repurpose or replace shuttered energy infrastructure; to enable operating energy facilities to cut greenhouse gas emissions and air pollution; and to clean up environmental damage associated with energy plants. The new law also provides $5 billion for loan closing and other costs borrowers would otherwise have to shoulder.
We must get this major investment vehicle on the road quickly and run it well. The climate crisis means we don’t have the usual several years for the Energy Department to issue regulations and to fight over them in court. Some of the investment — and the resulting jobs and tax revenue — should occur in economically distressed areas of the country, particularly where energy-related jobs such as coal mining are quickly vanishing. We need to excite clean-energy developers and investors about retrofitting old facilities and making rapid progress on shovel-ready projects. And, importantly, foes of nuclear energy, hydropower, carbon capture — and greening up fossil-fuel-powered plants more generally — must temper their opposition to these technologies to increase our odds of conquering climate change.