Governor Josh Shapiro stated Thursday that he wants to expedite large energy projects in Pennsylvania and provide hundreds of millions of dollars in tax credits for projects that produce hydrogen and supply power to the grid.
In the midst of an energy crisis that might result in higher electricity costs throughout Pennsylvania, the country’s second-largest producer of natural gas, Shapiro’s statement comes just days before he presents his third budget proposal to lawmakers.
Pennsylvania has a long history of energy leadership, and Shapiro, a Democrat, said he wants to continue that tradition while keeping up with other states that are luring large projects like data centers and electric car manufacturing.
At a press conference held at Pittsburgh International Airport, Shapiro stated, “Pennsylvania, it’s time for us to be more competitive, it’s time for us to act, we need to take some big and decisive steps right now, build new sources of power so Pennsylvania doesn’t miss out.”
Pennsylvania is one of just 12 states, according to Shapiro, without a body to expedite siting decisions for energy projects. By establishing the Pennsylvania Reliable Energy Siting and Electric Transition Board, he hopes to address this issue and expedite the approval and assistance process for new energy projects.
Shapiro stated, “We need shovels in the ground now, not in the years to come.”
Shapiro’s proposed tax credits are intended for large-scale enterprises that produce hydrogen, energy, and sustainable aviation fuel.
Shapiro’s idea would allow a power plant to receive up to $100 million annually for three years. What kind of electricity plants will be eligible was not immediately stated by the Shapiro administration.
Additionally, under Shapiro’s idea, a producer of hydrogen might be eligible for up to $49 million year, and a generator of aviation fuel may be eligible for up to $15 million annually.
Legislators would probably need to approve the plans. Shapiro’s energy strategy has drawn criticism from Republican lawmakers who claim it is a significant barrier to Pennsylvania’s ability to draw in businesses looking to construct large new natural gas-fired power plants.
The proposal by natural gas company CNX Resources to construct a $1.5 billion facility at Pittsburgh’s airport to manufacture hydrogen-based fuels is one initiative that Shapiro stated he wants to assist.
However, CNX has stated that it would only proceed if the federal government permits methane from coal mines to be eligible for tax credits, which were a key component of former President Joe Biden’s climate change strategy.
The demand for energy-hungry data centers, which require power to run servers, storage systems, networking equipment, and cooling systems, has increased due to the quick development of cloud computing and artificial intelligence.
This has sparked plans to develop small modular nuclear reactors, pull nuclear power plants out of retirement, and construct new natural gas plants or utility-scale renewable projects.
However, attempts to move away from fossil fuels that warm the planet and the closing of outdated nuclear power facilities are already placing a strain on the electricity supply, and the rise in energy consumption comes at a time when these efforts are intensifying.
Governors like Shapiro and state ratepayer activists have pushed the mid-Atlantic electrical grid operator to lower the amount of money it gives power plant owners in recent months, claiming that doing so will unnecessarily increase electricity costs throughout the area.