In Carbon County, Wyo. — a county named for its coal deposits — a power company is building hundreds of wind turbines. In Mingo County, W.Va., where many small towns were once coal towns, the Adams Fork Energy plant will sit on a former coal mining site and produce low-carbon ammonia.
A little over a year after the passage of President Biden’s landmark climate bill, a new analysis shows the White House has delivered on a key front: A disproportionate amount of wind, solar, battery and manufacturing investment is going to areas that used to host fossil fuel plants. And while that investment might not reshape the 2024 election, it could start to shift how rural communities view clean energy in the years to come.
According to the independent research firm Rhodium Group and MIT’s Center for Energy and Environmental Policy Research, the share of clean energy investment occurring in areas that the White House classifies as “energy communities” is almost double their share of the national population. While communities that once hosted coal, oil or gas infrastructure make up only 18.6 percent of the population, they received 36.8 percent of the clean energy investment in the year after the Inflation Reduction Act’s passage.
“We’re talking about in total $100 billion in investment in these categories,” said Trevor Houser, a partner at Rhodium Group. “So $37 billion investment in a year for energy communities — that’s a lot of money.”
Funneling clean energy cash toward areas that have relied economically on coal, oil and gas has been a top Biden administration priority. The White House has repeatedly emphasized that clean energy can be a pathway to jobs and the rejuvenation of rural economies — rather than a path to job losses for coal, oil and gas workers.
“The same communities that were once thriving coal mining and power plant towns will now be at the center of our clean energy economy,” Biden said in a speech last month in Philadelphia, flanked by a gigantic sign reading “Bidenomics.” “They deserve it.”
The IRA includes incentives for developers to place wind and solar in regions that have historically relied on fossil fuels. Developers that build clean energy at sites contaminated by pollution; cities or towns that have historically depended on coal, oil and gas for tax revenue; or areas where coal-fired power plants or mines were recently closed receive an additional 10 percent tax credit. These communities are in such places as West Virginia, southern Indiana and rural Pennsylvania.
“What we’re seeing is the kind of necessary investment in industries in parts of the country that have been ignored and underinvested in for 40 years,” said Josh Freed, senior vice president for climate and energy at the center-left think tank Third Way.
Houser notes that most of the investments tracked in the current analysis were planned before the map of energy communities had been released by the Biden administration; it’s too early, he said, to assess whether the extra incentives are working. But the future looks bright. “It looks like the share going into energy communities is growing,” he said.
Brian Deese, who headed the National Economic Council under Biden and now serves as an innovation fellow at MIT, said that even if developers didn’t know the exact tax credit map, they knew from the law’s text that they could get tax breaks by locating in former coal and gas communities.
“But the economist in me will always want to see data over a longer time period,” he added.
Most significantly, 56.6 percent of investment in U.S. wind power in the past year has gone to energy communities, as well as 45.5 percent of the storage and battery investment. Manufacturing in those communities, however, is lower than the proportion of the population. Houser said that’s probably because most new manufacturing is going to the South in the form of battery and electric vehicle plants — and the South hasn’t historically had a lot of fossil fuel jobs.
The analysis also found that significant amounts of clean energy investment were going to disadvantaged communities, defined as communities with environmental or climate burdens, and low-income communities.
Many of the states benefiting are solidly Republican. In West Virginia, where 100 percent of the clean energy investments are going to former fossil fuel communities, President Donald Trump received 69 percent of the popular vote in 2020. Sen. Joe Manchin III (D-W.Va.), who provided the crucial final vote to get the legislation through the Senate, has critiqued the implementation of the law even as he has celebrated funding for a new hydrogen hub and other clean energy investments.
Some experts say that the Biden administration’s definition of “energy communities” is too broad.
“Large portions of Nevada, Michigan and Arkansas are considered ‘energy communities’ despite the fact that very little fossil fuel extraction happens there,” Daniel Raimi, a fellow at the environmental nonprofit Resources for the Future, said in an email. “Many of these so-called ‘energy communities’ are not the ones that depend most heavily on fossil fuels for their economic well-being.”
And it remains to be seen whether any of this funding will sway voters in next year’s presidential election.
Many Americans who want action on climate change don’t know that the IRA included provisions to boost clean energy; according to a July Washington Post-University of Maryland poll, 71 percent of Americans had heard “a little/nothing” about the law.
Freed is not sure whether the clean energy investments will make a difference for next year’s election. But in the long term, he argues, rural Republican areas will become more dependent on clean energy — potentially shifting party alliances and shifting the position of the Republican Party itself. “It’s going to change these fossil fuel communities,” he said.
