March 14, 2012

Life in the trenches of renewable energy policy

This week's conversation, with former MA Secretary of Energy and Environmental Affairs Ian Bowles, was insightful and indicative of someone who has a strong pulse on the state of renewable energy in this country and beyond.

Ian talks to us about the realities, the good news and bad news, the evolution of the North East (particularly the Boston area) as a hotbed for alternative energy development and what this has meant for jobs, the inherent challenges of implementing renewable energy, general trends, his view of the future of renewable energy, and much more.

Ian is in the unique position of having been in the trenches at both the federal (Clinton Administration) and state levels as well as private sector with his recent transition to his startup, Rhumb Line Energy, as well as serving on advisory boards for a couple of companies including Harvest Power. And it is clear that the future of renewable energy is at the state level and fortunately this is where it is regulated. That's a good thing given the snail's pace of the Federal government. In his words:

"The U.S. as a national government is profoundly out of step with the rest of the world in terms of clean energy. Forget about how you feel about climate change. Even leaving that aside, the basic economic reason to make this transition is very strong."

At the state level, Ian describes how Governors and legislatures can and are working together to put in place some really strong green measures requiring them to buy a certain amount of power from renewable sources, pushing energy efficiency. Results happen quicker and the results are much more quantifiable.

Ian's experience at the state level was fortuitous. From the outset, Governor Patrick, and several legislative leaders, were strongly committed to economic development in clean energy. (Massachusetts is also the first state to put its energy and environmental departments under one roof.) The result has lead to major reforms in utility regulations, incentives for alternative power, greenhouse gas reductions and a variety of other substantial reforms. And the creation of several thousand jobs.

We talked specifically about the different forms of renewable energy, how the sector unifies, as well as some of the challenges including tax credits and the economic reality of traditional forms of energy coming down in price. For instance, the Production Tax Credit for wind project expires at the end of 2012. Reauthorization is being pushed through HR 3307, The American Renewable Energy Production Tax Credit Extension Act. For solar, the challenge is to convert federal tax credit into cash grants.

As far as trends and the future goes, Ian only sees it getting better as people are educated and adapt. For instance, energy derived from food and yard waste is on the rise and shows no sign of slowing down. Massachusetts, for instance, does not permit yard waste (leaves, grass, twigs) into landfills so these nutrients are being used for power. Ian adds that in Germany, a country known for their commitments to solar and wind, organic material accounts for more than wind and solar combined. Hopefully a sign of what is to come here. And let's not forget that utilities are now required to buy renewable energy at some level.

And there is also energy conservation as Ian discusses -- the cheapest form of alternative energy. Utilities that have historically been in the business of selling power are starting to be in the business of energy efficiency. It is a major transition for them to go from buying and dispersing power to people to helping customers take control of their bills and spend less, and, Ian reports, many of them are doing a good job. Ian also adds that many jobs have been added directly related to increased energy efficiency measures.

So, the good news is that every single state now has some form of energy efficiency program, which is a far cry from where we were just a mere 15 years ago. We are, indeed, over the hump. The US, in reality, has a very heterogeneous energy mix and this competition breeds efficiency (and less regulation). There is a lot of ground for optimism particularly at the state level as well as the municipal level. Renewable energy and the companies that pop up (and jobs) as a result are a viable part of the economic activity of many states and Ian only sees this being replicated across the country in many forms.


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