Sunday, Aug. 24, 2008 | 2 a.m.
Beyond the Sun
Senate Majority Leader Harry Reid was supposed to leave last week’s National Clean Energy Summit with a plan, one that he and other politicians could take to the Democratic and Republican national conventions.
Experts from across the country converged on Las Vegas armed with a variety of plans, so Reid instead left with dozens of ideas, ranging from world-altering to underwhelming.
The Sun asked the utility industry, environmental experts and the politically savvy to weigh in and tell us which ones are probable, which ones are possible and which ones are likely to end up on the cutting room floor, no matter how brilliant they might be.
• One of former President Clinton’s 10 steps the federal government should take to save the planet, reduce our reliance on foreign oil and revitalize our economy offered a choice. Levy a tax on carbon emissions, he said, or institute a “cap and trade system” in which there would be an overall limit for pollution and the federal government would auction off rights to pollute up to that cap.
Only one of those options appears viable. Enviros and the utility industry alike say the word “tax” is a political deal-breaker, “mostly just because of the word ‘tax,’ ” according to John Coequyt, senior Washington representative of the Sierra Club.
Cap and trade is more likely to get Congressional approval.
“Almost every observer expects that within three years, there will be a cap and trade system in the United States,” said John O’Donnell, executive vice president of solar developer Ausra, which recently located a manufacturing plant in Las Vegas.
But keeping the cost of carbon stable will be important to the utility industry because volatile prices change how competitive fossil fuel-burning power plants will be. Utility executives — including Michael Yackira, president of Nevada Power parent company Sierra Pacific Resources — would also like the proceeds from auctioning off the right to pollute reinvested in research and development of technology to capture and store carbon emissions.
• Increased federal funding for research and development on carbon capture was another of Clinton’s suggestions. It’s the darling of the utility industry, which insists coal will continue to be part of America’s electric power fuel mix, but is controversial with environmentalists and renewables developers.
They say that even if the technology, which is potentially decades off, is perfected, it will be so expensive to implement that solar power and wind power will still be cheaper alternatives.
“That said, for political expedience it has to be done,” O’Donnell said. “There is no way politically in the U.S. that any politician can stand up to the coal industry.” Funding the research is “politically rather than technically motivated,” he said.
Coequyt added that funding for carbon capture is a necessary element of any climate legislation for many members of Congress. “There is likely to be a tremendous subsidy for this industry, whether it is appropriate or not,” he said, adding that members of Congress from states sitting on coal reserves are unlikely to betray that industry.
But the utility executives say the United States, not to mention developing nations, has so much coal and relies on it for so much energy that it would be impossible to abandon the controversial fuel.
“Coal comprises 50 percent of our (energy) generation at this point,” said Jim Owen, a spokesman for utility industry group Edison Electric Institute. “You can’t just walk away from that overnight.”
• Arizona Gov. Janet Napolitano suggested that traditional fossil fuel industries receive too many federal dollars and that creation of a level playing field for the renewables industry will be key to helping make the technologies cost-competitive. She suggested ending subsidies for fossil fuels or providing comparable subsidies for the renewables industry.
But those subsidies are another political hot potato.
“The obvious solution is to extend tax credits,” for renewable energy development, Coequyt said. “The harder political solution is rolling back the other subsidies.”
• It is exactly that suggestion that has stalled energy legislation multiple times this year.
No matter how they’re paid for, Rhone Resch, executive director of Solar Energy Industry Association, said at the summit that tax credits will be key to the industry’s development. Industry insiders say extending them is the single greatest thing Congress could do in the near term, not only to prop up the industry for the long run, but to keep it from hemorrhaging jobs in the short term.
“This is one thing that has gotten caught up in partisan politics this year,” Coequyt said, despite broad support from both Republicans and Democrats. The conflict, at least on the surface, was over how to pay for them. And tens of thousands of workers stand to lose their jobs if Congress does not reach an accord.
“Of the things that might get done in September, this is, first, the mostly likely and, second, the most important for the economy. Because if these tax credits expire, it will have a very clear and very negative impact on the economy.”
Owen, of Edison Electric, said it is also important for Congress to pass a long-term tax policy, which will provide stability for the industry and make it easier for developers to get financing for projects that often take five or more years to plan and execute. Two- or three-year extensions of tax credits, which have served as stopgaps in the past, are not the solution, he said.
• Also key to getting renewable energy to homes in regions that aren’t as sun-drenched as Nevada or as wind-whipped as Texas is modernizing the nation’s electric transmission grid, the huge power lines that carry electricity from the mostly rural places where it’s produced to population centers.
“Nationwide, it’s an imperative,” said Yackira, of Sierra Pacific Resources, although he said Nevada’s grid is relatively new compared with those in many Eastern and Midwestern states. In the past decade, the company has spent $1 billion on new lines.
But the state’s two electric companies — Nevada Power and Sierra Pacific Power — still aren’t connected on the grid.
And aging infrastructure on the East Coast has caused brownouts and blackouts, such as a major one that affected New York City in 2003.
Yackira said the federal government wouldn’t necessarily have to finance new transmission, but could certainly weigh in on not-in-my-backyard disputes over where to put the massive power lines.
• The lack of transmission systems — and the incredible cost of building new lines — is one flaw in a plan proposed by oil baron T. Boone Pickens, according to Edison Electric’s Owen.
Pickens plans to build a 4,000-megawatt wind farm in Texas. Increasing the amount of the nation’s power that comes from wind to 20 percent — something developers and the department of energy say is possible — would allow utilities to shut down gas-fired power plants. The natural gas that was used in those power plants would then be freed up for use as transportation fuel for trucks and buses.
That would reduce America’s reliance on foreign oil by 38 percent and would keep $300 billion a year in the United States.
“One of the huge shortcomings in his proposal is it understates the complexity of building ... a latticework of transmission towers up to the Midwest,” Owen said.
Owen also said because wind is a variable resource, available only when the wind is blowing until researchers develop utility-scale battery storage, it might affect reliability.
“We’re open to all of these things. There is a lot of technology being developed,” Owen said. “But in the short term we have to keep the power flowing.”
• Although some summit suggestions would cost millions or even billions, some are much cheaper, such as replacing all inefficient incandescent light bulbs with compact fluorescent bulbs and creating new federal efficiency standards for appliances such as dishwashers, washing machines, air conditioners and hot water heaters.
Nevada law ends the sale of incandescent light bulbs in 2012, and the utility has a conservation program subsidizing the more expensive fluorescent bulbs. Yackira said every state should do the same, because it costs little and reaps huge energy savings.
“It’s such a simple thing for the customer to do,” he said.
Coequyt said energy efficiency measures are a major priority of the environmental community, and one that has languished under the current president, whose administration has refused to set stricter appliances standards.
“We know it works. We know it saves people money,” he said, adding that rising energy prices make an investment in more expensive, energy efficient appliances an even better one. And labor unions are actually touting the standards as a way to get Americans to buy American-made products.
• Energy efficiency measures — long the darling of environmental groups — on a grander scale could actually solve the entire climate crisis, according to one summit speaker, Edward Mazria, a founder of Architecture 2030, which promotes architecture-based solutions to global warming.
Mazria said the building sector accounts for 48 percent of total U.S. energy consumption and 76 percent of all electric use. About 40 billion BTUs of energy are consumed in homes and offices every year.
Mazria suggests all new buildings and major renovations should immediately reduce their consumption targets by 50 percent, which is possible with existing technology, and that by 2030, all buildings should be carbon neutral, meaning they contribute no carbon to the atmosphere.
After putting passive solar, natural ventilation, day lighting, solar panels, shading, window glazes and other efficiency increasers in place, any leftover energy needs would need to be supplied by renewables such as wind or solar power.
Mazria said this will not cost consumers a dime, but rather save the average American family $512 a year. And investing $21.6 billion in energy efficiency each year for five years would create a million jobs and save consumers $127 billion — more than the initial investment, Mazria said.
The result: dramatically reduced energy consumption and greenhouse gas emissions, lessened dependence on foreign oil and revitalization of the American economy.
Although environmentalists call Mazria brilliant, even some of them say it will be impossible to solve the whole problem with efficiency. Renewable energy will be another key.
“The challenge is, we have a lot of buildings that are not well designed,” Coequyt said.
Yackira was even more doubtful aging buildings could be retrofitted. “To get to what he’s suggesting is not feasible in my lifetime,” he said.
But he added that building codes that call for stricter efficiency are the best way to conserve energy.
• One way to improve utilities’ motivation to help consumers conserve is to remove the connection between how much money utilities make and the amount of power they sell, another summit suggestion. Instead, utilities would get a return on every dollar they invest, especially on energy conversation.
“If you give the utility companies a mandate to do it and then create the incentives for saving, they will pursue conservation with the same vigor they pursued power plants in the past,” Clinton said.
Nevada has effectively done that, by allowing utilities to earn a greater rate of return on dollars invested in conservation programs than they do on dollars invested in new power plants.
But many utilities nationally still have an incentive to sell more energy, not less.