Driving the future of clean energy: How transport infrastructure can power a green, inclusive economy

Murray Rowden

Regional Managing Director, Americas and Global Head of Infrastructure

North America

The Infrastructure Investment and Jobs Act heralds a new era in the way we live, work and impact on the environment. The delivery of the Act has been a careful political juggling act, focusing on job creation and economic revival while galvanising the green agenda.

The task at hand is a major one and we must take heed of infrastructure’s major impact on climate, given that it accounts for around 79 percent of all greenhouse gas emissions. If realized successfully, investment in green transport infrastructure has almost unbounded potential to lead the way to a modern, inclusive and zero carbon economy.

Amidst calls to ‘electrify America’, it is encouraging to see the Act identify green transport as a priority with significant financial backing that covers charging infrastructure, fleet vehicles and public transit. $66bn has been set aside for passenger and freight rail (a well-known favourite of President Biden), with a further $7.5bn for clean school buses and ferries and $7.5bn for electric vehicle (EV) charging.

The key now is to ensure programmes have the commercial viability to capitalise on this window of opportunity and the value filters to deliver maximum social benefit.

Coordination for change

While welcoming the federal government’s financial and policy backing, it’s important to recognise that this must be married with a robust vision for the sector and an end-to-end view on implementation. Transport infrastructure presents a unique challenge which needs to be tackled in a strategic, systematic and integrated way – with practitioners from developers to those managing assets long-term all needing to play a coordinated role.

Through our own engagement with multinational organisations with a large freight footprint, the commitment to driving carbon efficiencies through the value chain is clear – with significant investment in EV fleets and alternative delivery models.

While bold strides to decarbonise from the private sector should be welcomed in their own right, there is an untapped opportunity for greater collaboration between the public and private sector to bring forward the supporting infrastructure solutions at scale.

Clearly the federal government’s finances will need to be backed up with heftier financial commitments from the private sector – but for this investment to happen private investors need to know and understand the pipeline of work at the earliest opportunity.

A big part of the solution will be energy storage, which is set to play an important part in green transport programmes. This can support the groundswell in renewable energy generation taking place, from offshore wind to hydrogen and bio-energy – not least in the wake of the government’s world record-breaking $4.37bn sale of six offshore wind leases in New York and New Jersey.

All segments of the sector need to cooperate and talk to each other, understanding how green energy capacity will come on stream alongside EV networks.

Transformative programmes equally require talented people from a diverse talent pool that represents the communities of America. President Biden has demonstrated a commitment to ensuring that the new jobs creating a clean, modern energy industry are well-paid and unionised.

The Act extends prevailing wage protections to all energy infrastructure provisions, including the construction of EV charging stations on highways and in communities.

Now the challenge rests with organisations to proactively broaden their talent pool, developing the skills of tomorrow and delivering lasting socioeconomic benefits to local communities in the process.

No community left behind

This is where inclusivity and social value comes in. With these opportunities comes a clear challenge to traditional communities and manufacturing, especially in the automotive sector in key design and build hubs such as Detroit.

The drive toward net zero must be recognised as a process of transition, and avoid discarding the skills and people that make up the transport industries of today. America’s coal miners and energy workers have powered the country for more than a century.

The Act invests in places impacted by shifting energy markets, including directing billions of dollars for advanced energy manufacturing facilities and clean energy demonstration projects to communities where coal mines or power plants have been shut down (closures which include two of the United States’ largest coal-fired plants in Georgia).

The legislation also invests $21bn in environmental remediation, creating good-paying union jobs in hard-hit energy communities cleaning up superfund and brownfield sites, reclaiming abandoned mines, and capping orphaned gas wells.

The administration is embracing an ambitious tech-first solution with the launch of its Climate and Economic Justice Screening Tool in February this year, to map and identify the communities most in need of clean energy and infrastructure investment.

However, there is now a growing recognition that it could broaden the factors that feed into the tool. No indicators of race are directly incorporated into the algorithm, which commentators suggest may limit its potential to fully identify and support the underserved communities who stand to benefit the most from investment.

It’s vital that continued attention is paid to serving people across the broadest range of disadvantage factors.

Driving value through the supply chain

For this Act to succeed and deliver a step change in the decarbonisation agenda in the United States, the private and public sectors need to take a collaborative approach to innovation and conduct a thorough assessment of sustainability credentials throughout every stage of the investment journey.

The delivery supply chain must bring prosperity to underrepresented business communities – and this is where the work of the Minority Business Development Agency (MBDA) will once again come to the fore in ensuring skills requirements are matched with delivery capability and social benefit.

The MBDA has demonstrated potential via its memorandum of understanding with the Department of Energy on energy savings performance contracts (ESPC). The Department has mandated that all large company winners of the ESPC competition must set up mentor / protégé partnerships, with two partnerships for each winner.

That translates into 30 major programmes and will go a long way to onboarding advanced tech minority businesses that have renewable energy and climate friendly solutions.

The Federal Procurement Centre has a mandate to bring in strategic alliance partners with the capability to deliver. Again, tech can play a leading role here and one partner company we are aware of has a proprietary search algorithm database which can find all minority business enterprises in a region or state that work in a particular sector.

By carrying out this analysis, companies can be swiftly identified and supported, bringing them to MBDA’s attention to secure financing via the infrastructure bill.

The gauntlet has been thrown down for the infrastructure sector to develop the future of green transport and bring lasting social benefit to communities. Now the sector needs the vision to put in place the programme, people and procurement strategies that will realise its ambitions.

For further information contact:

Murray Rowden
Regional Managing Director, Americas and Global Head of Infrastructure

t: +44 (0)207 544 4000