Bold new vision requires massive scale-up of renewable energy

by Dan W. Reicher

To meet the critical challenges of the 21st Century-climate change, energy security, and economic development-we need a bold new vision for how America generates and uses electricity.

We must:

• Become smarter and more efficient in the way we use electricity
• Green our electricity supply through a massive scale-up of renewable energy
• Electrify our transportation fleet with plug-in vehicles to reduce our dangerous oil dependence

Our vision is a 21st Century U.S. electricity system featuring:

• Hundreds of thousands of megawatts of renewable power
• Millions of plug-in vehicles
• Tens of millions of energy efficient homes and businesses

The biggest impediment to achieving this vision is not technology or even finance.

It is policy, particularly at the national level.

The current regulatory model for electricity is broken. It does not encourage utilities to help people save energy. It retards renewable energy development. It discourages modernization of the grid. It fails to cut greenhouse gas emissions. We need to fundamentally rethink this model.

There are four critical elements: First, we need large scale public and private investment in electricity infrastructure and modernization of the power grid. Spurring this investment will require overcoming the current barriers to siting and construction of new electricity infrastructure, especially large-scale transmission. This may require greater federal authority, balanced by strong environmental standards, to overcome resistance to long-distance interstate transmission lines that are essential to the development of large scale renewables.

Second, we need strong standards and incentives for clean energy. These include a national Renewable Energy Standard, a national Energy Efficiency Resource Standard, and aggressive new appliance efficiency standards. We also need stable long-term tax credits and other financial incentives for energy efficiency, renewable energy and plug-in vehicles.

Third, we need the federal government to take a leadership role in an exciting recent development: the increasing interplay between energy hardware and information software and the corresponding rise of the Internet and the connectivity it brings. From smart meters and smart appliances to smart homes and a smart grid, we are poised to significantly advance our ability to make, monitor and use energy more productively.

And with smart policy-like "revenue decoupling" -we can align interests, putting utilities in the position to make money helping consumers use less energy.

Fourth, we need major increases in government R&D. We must dramatically scale up investment in research and development for clean energy technologies. Total federal energy R&D is less than half what it was at its peak in the late 1970s.

Federal investment in this area will more than pay for itself, just as it has in computer science, aerospace and biomedical research.

If enacted, these measures should stimulate trillions of dollars of investment -largely from the private sector-over the next three decades to make the transition to a more efficient low carbon electricity system.                   

They will also create millions of new jobs.

This is an enormous opportunity. One example: American consumers get a paper utility bill once a month that is complicated and encourages little except prompt payment. What if utility customers had on-line, real time information about their home energy use? What if their air conditioner, electronic equipment, appliances, and lights, were programmed to automatically cut their bills? What if these customers had the ability to push a button and switch their energy purchase from fossil fuels to renewable energy? And what if their car ran on electricity instead of gasoline, and automatically charged at night when electricity was cheaper-or during the day from the solar panels on the roof?

These are exciting opportunities but we are unfortunately a long way politically from making them happen.

But we have a big opportunity with a new President, a new Congress and unprecedented concerns about high energy prices, our oil dependence and climate change.

There has never been a better moment. Let's seize the opportunity.

For the Record is an excerpt of a Statement by Dan W. Reicher, Director, Climate Change and Energy Initiatives, Google.org to the U.S. Senate Energy Committee Energy Summit in September 2008. Reicher previously served as Assistant Secretary of Energy for Energy Efficiency and Renewable Energy and was co-founder and President of New Energy Capital, a private equity firm focused on investments in clean energy projects.

March/April 2009