U.S. Charges Towards Green Energy
The U.S. seems well on its path to green energy. President Joe Biden recently signing into law the biggest clean energy investment in U.S. history. The package includes $370 billion in subsidies for solar and wind energy development, electric vehicles, etc. Taking a cue, US Steel and Shell U.S. Gas & Power LLC signed an agreement. This deal will set up a clean energy hub centralized in Pennsylvania, West Virginia and Ohio. This new hub will explore decarbonization opportunities that feature carbon capture utilization and storage. Hydrogen production and utilization are also on the agenda for the new hub, according to a press statement. The hub and its associated infrastructure, should generate new jobs, stimulate economic growth, and help achieve significant reductions in carbon emissions, if successful.
Green Energy Race Between the U.S. and China
The news seems to have been welcomed by U.S. producers. According to Grete Tveit, SVP Equinor Low Carbon Solutions, the new, low carbon hub in this region could have a “profound impact” on both the climate and the economy. The company has been investing in the Pennsylvania region for the last 14 years and has significant equity gas production in the Appalachia region.
This development is just one more step in the U.S.’ stipulated plan of aiming for net-zero carbon emissions by 2050. Equinor and Shell plan on jointly applying for U.S. Department of Energy funding designated for the creation of regional clean energy hubs. But compared to China, the U.S. lags in clean energy development, and continues to play catch-up. Though admittedly, China remains a significant fossil fuel user (2x what the U.S. uses). Last year, China invested about U.S. $380 billion in clean energy, while North America invested $235 billion.
U.S. Clean Energy Benefits on The Horizon
The Chinese government, according to this report, set targets for wind and solar capacity. It extended credit lines to the private companies in this sector and allowed subsidies to help clean energy sources compete with cheaper coal-generated power before the U.S. ever had a blueprint. However, when the two clean energy plans are compared today, the U.S. is catching up with China. The U.S. will soon start reaping the benefits of its clean energy plan, just like China. In 2021, for example, China accounted for nearly half of new global renewable energy capacity.
In comparison, the U.S.’ efforts on this front look modest. American solar and wind tax credits pushed growth in solar and wind energy sectors. Overall, financial and regulatory support for renewable electricity generation appears higher in China. However, China’s renewable electricity share leapt from 16% in 2005 to 28% in 2021. These numbers are much higher than existing levels in the U.S.
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