Posts tagged “clean energy”
The solar industry has been very hot. Record amounts of new solar capacity have been installed over the past two years. The accelerating pace of adoption of solar panels for distributed generation (installed at the point of use, rather than sold into the power grid) and the downward trend of module prices have created exuberance over the industry’s future.
Solar has reached and eclipsed price parity with traditional fuel sources in some markets, and ultimately the potential market for solar PV is huge. A solar module costs approximately 1% of what it did 35 years ago and prices for solar pv panels have plummeted since 2010, with an average price per watt for panels falling from $1.81 in 2010 to less than $0.70 and today.
It is clear that the future is very bright for the industry. What is less clear is when growth will accelerate and how near-term challenges for the industry could create some rough patches for the industry before widespread adoption drives truly explosive industry growth.
Making Innovation Part of Climate Hawks Policy Pitch
In a previous article I argued that climate policy advocates should make energy innovation part of their policy elevator pitch. A good opportunity to start is now available through the debate on reforming and re-authorizing the America COMPETES Act.
Within the climate advocacy community there are those that argue for aggressive clean energy innovation policy (such as myself) and those that argue for aggressive deployment of existing clean energy technologies (such as Center for American Progress’s Joe Romm and 350.org’s Bill McKibben). Each provides different policy emphasis and nuance. Today, deployment policies receive higher priority, reflected in it dominating the narrative among advocates as well as dominating the portfolio of U.S. public investments in clean energy. As a result, conflict occurs over what policy changes should be made.
As Grist’s Dave Roberts argues (correctly to a degree), both “camps” agree on a lot and everyone should aggressively work for clean energy to be a national priority to “lift all boats,”—both innovation and deployment of today’s technologies alike. How then should this consensus be reflected in our pitches to policymakers?
Welcome to High Efficiency, a new column from Energy Trends Insider. I’m your columnist, host, and resident energy-efficiency-obsessed individual, Allison Asplin. (You might remember me from my article in Eli Hinckley’s Banking Energy column, “Why Energy Efficiency and Buildings Don’t Mix.”)
First a little about who I am and what I do.
I spent eight years eating, sleeping, and breathing commercial real estate, first in brokerage at a leading global real estate services firm, then as a development manager and regional sustainability director for one of the country’s largest REITs.
Grappling with the energy performance challenges of an 80-building portfolio whetted my appetite for efficiency work, and I bolted for grad school to study energy policy. As a newly-minted Master’s degree holder, I accepted a fellowship with Bloomberg New Energy Finance to study the barriers to energy efficiency in real estate in depth. Through that research, I concluded that utilities are a crucial part of the charge toward energy efficiency, leading me to my current work evaluating energy efficiency and efficiency financing for utilities, governments, and private companies at environmental consulting firm The Cadmus Group.
President Obama released his long-awaited FY2014 budget request and while it’s unlikely the budget will be taken up by Congress in its entirety, it remains an important document. Namely, the proposal is significant because it steadfastly argues that America can continue to support next-generation industries like clean energy. In fact, the President’s proposal budgets for a number of high-profile, high-impact programs, including those aimed at growing the domestic clean energy manufacturing sector, reduce transportation fuel use, and calls on Congress to fund a new Energy Innovation Hub to transform the electricity grid.
Across the board, the FY2014 request boosts key energy innovation offices at DOE by about 15 percent compared to the FY2013 Continuing Resolution and seven percent higher than the President’s FY2013 request. The lion’s share of budget gains are aimed at the Office of Energy Efficiency and Renewable Energy (EERE), which would see a budget increase of 54 percent from FY2013 CR levels, and at the Advanced Research Projects Agency-Energy (ARPA-E), which would see a budget increase of 46 percent.
Expanding Research Capabilities in Advanced Energy Manufacturing
The largest budget increase target at EERE – 22 percent to be exact – is for the department’s Advanced Manufacturing Office, which invests in transformational research and development of integral clean energy manufacturing technologies and practices. This investment would support and complement EERE’s recently announced Clean Energy Manufacturing Initiative, which aims to aggressively increase the international competitiveness of emerging energy manufacturing. The program is designed to begin reversing a decade’s long decline in U.S. manufacturing – immediate goals include transferring new research, technologies, and industrial education and training to industry through a new research institute under the banner of the President’s National Network of Manufacturing Innovation as well as EERE’s Better Plants Challenge.
The IRS issued an important piece of guidance related to clean energy finance this week. It is the annual inflation adjustment for the Production Tax Credit (PTC) and it increased the credit from 2.2 to 2.3 cents per kWh for full qualifying energy property like wind and geothermal, while the partial credit for sources like open-loop biomass and incremental hydro remained at 1.1 cents per kWh (also adjusted were the inflation factors for Indian and refined coal).
More important is what is still missing – despite widespread expectation for a first quarter release, the long awaited rules on how to determine the start of construction for purposes of determining what projects will be PTC eligible at the end of 2013 still have not been issued.
When the PTC was extended as part of the fiscal cliff deal during the holidays there was an important change in the method for determining whether a project would qualify for the credit. Historically, the qualification of property was based on the date the property was placed in service (and it’s worth noting that this rule is actually somewhat vague and the application sometimes very nuanced). Now, qualification is based on when construction for the facility begins. As long as construction starts before year-end, property is eligible for the credit.
Solar energy entrepreneur Jigar Shah took to the site Greentech Media to criticize U.S. energy policy leaders for failing to champion deploying today’s clean energy technologies. Shah’s focus on ways to better deploy competitive clean energy underscores the critical need to re-frame the clean energy debate in terms of innovation and have a healthy discussion on building better policy solutions for deployment that drive innovation and support the growing clean energy industry.
Assessing the Character of U.S. Energy Policy
According to ITIF’s Energy Innovation Tracker, the United States invested $68.3 billion in clean energy innovation (in addition to $35.6 billion in loan guarantees) since 2009, 67 percent of which went towards clean energy deployment policies. This included deploying existing technologies through Stimulus policies like the loan guarantee program, energy efficiency grants, advanced manufacturing, and almost single handedly saving the solar and wind industry through the 1603 cash grant program at the height of the recession. Even in FY2012, which is absent Stimulus funding, 63 percent of the $14 billion in clean energy innovation investment went to deployment projects and programs.
This is a guest post from my friends Katherine Hamilton, Jeff Cramer, and Patrick Von Bargen at 38 North Solutions (one of my best resources on energy policy developments in Washington). I get updates from them on emerging energy and related policy news, and I am excited to be able to share their follow up to the State of the Union here as I thought this was a great summary of the President’s energy focus.
Following up on the President’s largely unexpected statements on climate policy in his inaugural speech, the 2013 State of the Union highlighted accomplishments to date on clean energy deployment and GHG reductions, and outlined five focus areas for his second term climate and clean energy agenda. We have included our prognosis for each of these areas.
1) Challenging Congress to pass legislation addressing climate change through “market-based solutions,” referencing Republican John McCain’s past support for his own cap and trade bill, last introduced in 2007, and threatening executive action to regulate carbon through the Clean Air Act.
Prognosis: Dems in both Houses are expected to introduce climate legislation, perhaps as a Clean Energy Standard (CES) that the President has promoted in the past and that was introduced in Senate Energy and Natural Resources in the last Congress; perhaps through introduction of a carbon tax that has the dual purpose of raising revenues; perhaps through a smaller package of provisions like Master Limited Partnerships for renewables or innovation incentives for clean technology. EPA will also continue regulating greenhouse gas emissions through its Clean Air Act mandate.
The purpose of Energy Innovation 2013 – a half-day conference co-hosted by my organization, the Information Technology and Innovation Foundation, and the Breakthrough Institute – was to discuss the possibility of developing and deploying all of the cheap, high-performing zero-carbon technologies necessary to meet 40 terawatts of projected global demand by mid-century. Most importantly, the conference spurred debate on how the need for clean energy innovation should influence the climate and energy policy debate.
Over the course of three stellar panel discussions as well as follow-on debate via twitter (check out #EI13), a number of themes emerged that merit further debate amongst advocates, thinkers, and policymakers:
It’s Global Warming, Not American Warming
ITIF President Rob Atkinson set the stage for why energy innovation needs to be a policy priority by presenting a straight-forward logic chain: climate change is real and man-made, it’s about developing clean energy technologies that are cheaper than fossil fuel alternatives to drive down carbon emissions, and it’s globally pervasive. Clean energy technologies need to be affordable to all nations, and particularly emerging economies with growing populations that will consume more energy in the coming decades than the United States.
This is Part 4 of a series of posts analyzing and detailing federal investments in clean energy innovation. Part 1 defined “clean energy innovation.” Part 2 broke down the federal clean energy innovation budget. Part 3 took a look at federal investments in clean energy demonstration projects.
For the last couple of years, the lion’s share of debate on U.S. clean energy policy has focused on encouraging deployment – or large-scale construction and installation – of low-carbon technologies. By significantly deploying clean energy technologies, supporters say, the United States can encourage integration of emerging technologies in an energy market dominated by entrenched fossil fuel interests, spur cost-cutting economies of scale, and get started on lowering greenhouse gas emissions in the process. However, others argue that there is a necessity to designing well-constructed deployment incentives aimed at directly spurring innovation to address climate change.
A Quick Typology of Deployment Policies
Federal clean energy deployment incentives can be made available through grants and other annually appropriated programs. For instance, the State and Tribal Energy Programs at the Department of Energy (DOE) deploy building efficiency and renewable energy technologies within communities. The New Energy Frontier initiative at the Department of the Interior (DOI) deploys renewable and energy efficiency technologies on federal lands.
This is Part 3 of a series of posts analyzing and detailing federal investments in clean energy innovation. Part 1 defined “clean energy innovation” and Part 2 broke down the federal clean energy innovation budget.
Why Government Investment in Demonstration Projects Can Be Controversial
Transforming the U.S. (and global) energy system from fossil fuels to low-carbon technologies requires a healthy, publicly supported innovation ecosystem that invests in and supports research, development, demonstration, and deployment. But as discussed in Part 2 of this series, America’s energy innovation ecosystem is “hollowed out”, particularly because of reduced investment in technology demonstration projects.
At its very basic level, technology demonstration projects exhibit full-scale models of first-of-kind technologies and systems, as opposed to pilot projects (e.g. an ARPA-E project), which aim to simply prove a technical idea. Demonstration projects aim to prove a technology at commercial scale.
Clean energy demonstration projects are an area of extreme policy debate and controversy for two reasons.
First, clean energy demonstration projects are often capital-intensive projects that require significant investment and public-private collaboration, typically invoking considerable attention because of large budgets.
Second, clean energy demonstration projects are often viewed as too close to market and not an appropriate role of government investment. As such, it’s a turbulent area of clean energy innovation policy.