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Moving Renewables Beyond Cap and Trade

Let's face it: A major push to pass a Renewable Energy Standard or a Cap and Trade program is very unlikely this year, or even into next. But that doesn't mean clean energy has to suffer.

A new report out from the Clean Energy Group (CEG) highlights a number of steps that can be taken to maximize existing federal policies toward renewables. Report author and CEG President, Lewis Milford, calls it “Clean Energy Pragmatism.”

Rather than wait on a sweeping piece of legislation, Lewis outlines five key short-term strategies that could have a substantial impact on the industry. The recommendations call for a creative re-positioning of funds already available from the government.

Lewis' ideas primarily focus on funding early-stage technologies. Providing more money for up-and-coming technologies is certainly a good thing – but it doesn't necessarily address the problems of mature, capital-intensive technologies like hydropower, geothermal and wind. (The main policy issue these industries face is a lack of long-term tax credits or a federal renewable energy target).

Even so, the proposals offer good food for thought. Here are some of the ideas from the report, as written by the Clean Energy Group:

  • Open and Distributed Innovation: The Department of Energy (DOE) and other federal agencies should use new innovation strategies from the corporate sector to move clean energy from lab to market. Open and distributed innovation strategies would create energy breakthroughs outside the traditional research and development structures. DOE and other agencies should reprogram at least $100 million from existing funds to institute several experimental, corporate-style innovation programs to accelerate technology commercialization breakthroughs.
  • Clean Energy Federalism: The federal government should recognize that states are the key to a future clean energy transition. To that end, the federal government should invest $650 million of existing funds to support a stronger technological and financing partnership with the states to deploy clean energy throughout the nation—a new “clean energy federalism.”
  • Bridge the Valley of Death: In order to create commercial products from technologies that have proven success in the lab and at pilot scale, the federal government should undertake two initiatives to overcome the major obstacles to private financing of new, pre-commercial technologies: reprogram $50 million to support a negotiated collaboration with the insurance industry to explore and develop “efficacy insurance” products to reduce the technology risks of new clean energy technologies; and invest $50 million more to help state regulators develop programs for utilities to direct $1 billion of their ratepayer annual investments in power procurement for emerging clean energy technologies.
  • Federal- State Procurement: The DOE should lead a coalition of federal and state agencies to commit to procure at least $1 billion in power from emerging technologies such as offshore wind and marine power, technologies that now receive significant research funds.
  • International Cooperation for Product Development and Deployment: On a global scale, the U.S. State Department and the DOE should reprogram $100 million in existing funding commitments to support greater cooperation in technology innovation, more coordination of public clean energy investors, and a better linking of these activities with the private sector. This would support technology and finance initiatives among developed and developing countries.

It seems the Obama Administration is already thinking about how to re-deploy some government funds. Last week, the administration proposed taking money from the slow-moving loan guarantee program and putting it toward investment tax credits, which have been far more effective in getting projects moving.

The Clean Energy Group sent a letter to the President with the above recommendations this week. Since the administration is already in the mood to reconsider certain policies, perhaps these ideas will have some traction.


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Renewable Energy World's network editors help deliver the most comprehensive news coverage of the renewable energy industries. Based in the U.S. and the UK, the team is comprised of editors from Pennwell Corporation's myriad of publications that ...


Volume 18, Issue 3


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