Regulations Would Stop Renewables' Goals
A Chamber of Commerce view of the energy landscape
Renewable energy facilities would have to multiply eight-fold if there is any chance of the United States reaching President Obama's goal of producing 80 percent of its energy from clean sources by 2035. That's according to a researcher at a Chamber of Commerce energy institute, who views that threshold as virtually impossible to meet.
That was one of the nuggets discussed as the U.S. Chamber of Commerce Institute for 21st Century Energy unveiled its recommendations for policy over the short and long terms. The Chamber said it spent the last year traversing the country to get input for a plan unveiled this week that it touts as a "realistic" view of energy needs of that United States.
A lot of the discussion and report discussed the well-known Chamber of Commerce view of the energy markets - support for coal and nuclear power, offshore drilling, more oil and gas exploration, more federal lands open for resource extraction, less regulation etc. -- so I won't discuss that here.
But the renewable energy discussions offered some insights into what the Chamber thinks is the business view of that resource. In short, it falls short of what proponents in the clean energy space, or even the president, is counting on.
"Non-hydro renewable at about 1.6 percent of our electricity supply. So how fast and at what cost can they grow to be a bigger part of our energy mix?" said Karen Harbert, president and CEO of the Institute.
"To look at non-hydro renewable, it has to increase by nearly 800 percent, and that's a pretty significant undertaking," said Christopher Guith, vice president for policy of the Institute. "Even if you assume we were to go in this direction, the point that I think is most important is that there are so many regulatory barriers right now, on siting and for building these facilities, it would be impossible to get there."
Harbert noted that the "BANANA syndrome, build absolutely nothing anywhere near anybody is with us everywhere and impeding investment."
Other things of interest for the renewable energy industry:
- Federal siting authority for interstate transmission to connect remote resources with load centers
- Development of a "clean energy bank" to promote investment in innovative new technologies that may be too risky for the private capital markets.
Investment in energy research and development has lagged, while the Institute acknowledged the stimulus broke the three-decade-long string of decline.
"We need to recognize the front seat of the private sector" but while also acknowledging the lack of R&D spending since the Arab oil embargoes. "Clearly, we need to commit to an economy of innovation going forward," Harbert said. But where do the funds come from, if the private sector hasn't been investing? Just wondering.
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Comments
Obama & clean energy goal
The President does not seem to recognize that proposing an unotainable goal amounts to self-mockery. If he had the full support of the entire business community (which he does not have) he would need to propose a rapid major reform of the environmental regulatory structure to come half way close to the stated clean energy goal. The president's failure to propose the necessary government reform constitutes the self-mockery. No one should take him seriously until he proposes to do his part for his own goal.
Renewable Goals
The analysis by the California Public Utilities Commission is even less hopeful about reaching such goals than Jack Ellis suggests. A look at the Interim Report shows that its projections are focused on achieving 33% renewables by 2020 measured as installed capacity. Since as a practical matter most of the goal would be achieved by wind, achieving the goal in terms of installed capacity at best means only one-fifth, or 25% actual generation rate (and really less, since effective capacity is less than that) must be applied to the 33% if achieved. That is, achieving 33% renewables by 2020 measured as installed capacity results in achieving 8.25% of electricity actually generated by renewables (and less actually gets to ratepayers).
Renewable Goals
On the one hand, I would agree that the Chamber's business-as-usual attitude is unhelpful. As has been pointed out elsewhere, oil, gas and coal extraction take a heavy toll on the environment, and that's before they see the inside of a utility boiler. Carbon capture and storage is a politically attractive but unproven technology that will be very expensive in its own right, assuming it can be made to work.
On the other hand, the President's goal is a bit unrealistic and could be very costly. Two million megawatts of wind turbines would cost around $3 trillion dollars, or about $120 billion per year in new capital expenditures. Figure at least half again as much for storage to shape all that wind so it can be delivered around customer needs rather than when it is available. The $180 billion total, which is probably understated, represents a large portion of the power industry's annual retail revenues today without accounting for demand growth and expansion and replacement of existing transmission and distribution infrastructure. To the extent a capital program of this size leads to rapid increases in electricity prices, we can expect a public revolt.
All of these technologies, renewable and others, have their place. I'd like to see the Department of Energy fund some analysis that helps the rest of us understand the cost implications of each of these alternatives and the likely impact of different trajectories toward meeting different renewable energy goals. The California Public Utilities Commission has already undertaken such an analysis in connection with its 33% RPS mandate (http://www.cpuc.ca.gov/NR/rdonlyres/1865C207-FEB5-43CF-99EB-A212B78467F6/0/33PercentRPSImplementationAnalysisInterimReport.pdf)
Jack Ellis, Tahoe City, CA
Renewable Goals
On the one hand, I would agree that the Chamber's business-as-usual attitude is unhelpful. As has been pointed out elsewhere, oil, gas and coal extraction take a heavy toll on the environment, and that's before they see the inside of a utility boiler. Carbon capture and storage is a politically attractive but unproven technology that will be very expensive in its own right, assuming it can be made to work.
On the other hand, the President's goal is a bit unrealistic and could be very costly. Two million megawatts of wind turbines would cost around $3 trillion dollars, or about $120 billion per year in new capital expenditures. Figure at least half again as much for storage to shape all that wind so it can be delivered around customer needs rather than when it is available. The $180 billion total, which is probably understated, represents a large portion of the power industry's annual retail revenues today without accounting for demand growth and expansion and replacement of existing transmission and distribution infrastructure. To the extent a capital program of this size leads to rapid increases in electricity prices, we can expect a public revolt.
All of these technologies, renewable and others, have their place. I'd like to see the Department of Energy fund some analysis that helps the rest of us understand the cost implications of each of these alternatives and the likely impact of different trajectories toward meeting different renewable energy goals. The California Public Utilities Commission has already undertaken such an analysis in connection with its 33% RPS mandate (http://www.cpuc.ca.gov/NR/rdonlyres/1865C207-FEB5-43CF-99EB-A212B78467F6/0/33PercentRPSImplementationAnalysisInterimReport.pdf)
Why Does the Chamber Oppose Goal-Setting?
The U. S. Chamber of Commerce is seemingly cynically negative about even goal-setting these days. Anything that threatens to move extra-big-business away from its inertia in energy modernization and innovative approaches to conservation and new generation -- and requires the least expenditure of even a small amount of husbanded capital or double-digit increases in profits -- can't be done and it's not even worth setting a goal that may provide a degree of encouragement. Thank goodness there are progressive corporations out there that have moved away -- quit -- the Chamber-think approach and are willing to explore a host of fuels options. The basis of any U. S. energy policy must embrace and enhance the balanced use of a full-range of fuels options, policies that do not choose one technology over another to meet exigent needs, and policies that are geared to pragmatic reality and technically-accepted and proven values. Rather than continually studying why things can't be done, the U. S. Chamber might better invest its mega-millions in studies and ways that business can help achieve worthwhile national energy goals that also create good-paying domestic manufacturing jobs!.