While the Trump Administration is canceling $7.6 billion in previously approved U.S. Department of Energy loan commitments for decarbonization projects and freezing billions of other financial promises under Biden, the European Union is aggressively moving forward with investment in energy transition technologies.
Furthermore, the EU has committed more than 250 billion Euros, or about US$290 billion at current exchange rates, in green energy measures under the NextGenerationEU framework. Those projects funded include transportation electrification and decarbonization, building renovations and renewable energy.
Smart about money and security or short-sighted on long-term sustainability?
The Trump Administration justifies the cancellations and freezes as protecting American security and penalizing ill-advised commitments on projects in favor of baseload resources such as gas-fired power and advanced nuclear reactor technology of the future. Many of those loan commitments were made late in the Biden Administration, current DOE officials pointed out.
Others who are concerned about the fallback in energy transition commitments warn that the U.S. is being short-sighted and harming long-term sustainability. These cuts may also prove bad for business, some say.
“If clean-tech solutions continue to be de-funded, this will become a major issue for corporate budgets,” said Donatas Karčiauskas, CEO of artificial intelligence (AI)-based energy efficiency and management firm Exergio, in a press release announcing the company’s report.
“At the moment, the EU offers far more predictable frameworks, while the US seems to be entering a pause-and-review cycle,” Karčiauskas added. “For industries such as the building sector, it shows that policies are not prioritizing sustainable solutions. Buildings, however, run every day and consume energy regardless of funding timelines,”
Commercial buildings consume more than 30% of electricity in the U.S. and emit about that proportion of greenhouse gas emissions, according to federal agencies. Between residential, commercial and industrial, facility and housing emissions total close to 4 billion metric tons of carbon dioxide equivalent annually, according to Environmental Protection Agency statistics earlier this decade.
Those numbers are similar on the international level. The loss of federal incentivization to clean up building emissions in the U.S. will impact new equipment investment, the release by Exergio indicates.
“The realistic step now is software on top of existing controls,” Karčiauskas said. “On the good note, we’ve already seen such solutions deliver even better results than some deep renovations or major upgrades. For example, existing AI tools can read site data, identify waste, and apply small corrections. The result is steadier temperatures, fewer fault hours, smoother run profiles, and, most importantly – energy savings up to 30%.”
The case for electrification and upgrading the built environment
Of course, next-gen and cutting edge HVAC, lighting, windows and insulation technologies provide long-term results, as evidenced in work and products by companies such as Trane, Lennox, Ameresco, Lektron, Siemens and others.
Electrical system upgrades also offer solutions for decarbonizing the building sector, according to a new story in EnergyTech by Ellie Gabel of technology website Revolutionized. Much of the existing grid and electrical infrastructure in buildings is close to 40 years old and in need of upgrading, Gabel writes.
“Electrical upgrades benefit everyone because they prioritize energy efficiency, cut building emissions and save money,” she noted. “Lower utility costs are another way to make commercial properties more enticing to prospective renters. Energy-efficient equipment is a wonderful selling point, especially if competitors have yet to begin the process themselves.
“Finally, properties could be more likely to retain tenants for longer because the building is safer and more reliable,” Gabel added. “Old hardware and electrical congestion may lead to hazards like electrocution or fires.”
And while the federal government is putting a hold or end to some efficiency, carbon capture and decarbonization projects, some states such as New York, California and Washington are moving forward with initiatives aimed at curtailing greenhouse gas emissions on commercial real estate, industrial factory and residential levels.
