US Seeks Input on How to Use Cold-War Law to Boost Clean Tech

(Bloomberg) -- The US Energy Department is considering ways to boost the domestic production of clean energy technology such as solar panels, transformers and hydrogen fuel cells using the powers of a Cold War-era law once invoked by former President Donald Trump to prop up money-losing coal plants. 

The agency said in a notice Monday it’s seeking public input on how to use the Defense Production Act to speed up production of technology for grid reliability and clean-energy deployment. President Joe Biden’s administration granted the agency new authority over the summer to use the 1950 law. 

“The national defense imperative to strengthen the U.S. clean energy manufacturing base has become more urgent,” the Energy Department said in a statement. “Russia’s war on Ukraine and impacts of the COVID-19 pandemic disrupted global supply chains and underscored the dangers of our over-reliance on foreign sources for grid components and fossil fuels from adversarial nations.”

The agency already plans to use $250 million from the Democrats’ Inflation Reduction Act to fund Defense Production Act investment for the making and deployment of heat pumps. Future funding could be used for grid transformers which, because of supply chain challenges, have two-year wait times that threaten grid reliability, especially when coupled with an increase in hurricanes and wildfires, according to the department.

Energy Secretary Jennifer Granholm said her department wants to continue hearing “from industry, labor, environmental, energy justice, and state, local and Tribal stakeholders about how we can best use this powerful new authority to support the clean energy workforce and technologies needed to combat climate change.”

The Defense Production Act was harnessed by President Harry Truman to make steel for the Korean War and by Trump to spur mask production during the coronavirus pandemic. 

The Energy Department said it plans to use the law to strengthen US supply chains, including purchases, purchase commitments and financial assistance. That includes direct financial support to expand US manufacturing or committing to purchasing a quantity of transformers to provide manufacturers with demand certainty. 

In addition, the department is considering using the Defense Production Act to boost American production of solar photovoltaics, insulation and electrolyzers, fuel cells and platinum group metal catalysts seen as boosting the production and utilization of clean hydrogen.

“Building the domestic energy industrial base necessary to maintain and strengthen grid reliability and resilience is critical to the U.S. economy and our national defense,” the department said in the statement.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.