Baseload, Bioenergy, Geothermal, Hydropower, Solar, Wind Power

Is Environmental Regulation a Substitute for a US National Energy Policy?

What if you want to stimulate the development and commercial deployment of a portfolio of clean renewable energy options like solar, wind, sustainable biomass, combined heat and power, ocean and kinetic, and you can’t get an energy bill through Congress? The path of environmental regulation in the U.S. is always available, isn’t it?

Environmental regulation has certainly played an important role in the development of clean renewable energy and energy efficiency technologies, manufacturing/operating systems and designs. It is important, however, to consider whether or not environmental regulation is in fact an acceptable substitute for a targeted national energy policy.

Necessity is a Mother

There can be no doubt that environmental regulation is an important corollary to energy policy. Without question, such rule making has served as an essential expedient, as direct policy approaches have been frequently cut off by partisan politics and Congressional gridlock. Consider that the last comprehensive [authorization] legislation was passed in 2007. Only three times in the last 19 years—1992, 2005 and 2007—has Congress passed and a President signed a bill approximating anything that could be called national energy policy. No energy appropriations legislation—where money and mouth need to meet—has been enacted since 2009. Energy policies and programs have essentially remained unchanged under a succession of Continuing Resolutions.

The observation by Coral Davenport of The New York Times sums up the energy situation in Washington:

Throughout the Obama administration, partisan differences over energy policy and climate change meant that meaningful energy legislation had essentially no chance of passage. When bills were offered…they were meant to score political points rather than enact substantive policy.

It is possible that either or both authorizing and appropriating legislation will be enacted this year; although chances remain slight. The best possibility of Congressional action is the passage of the Energy Policy Modernization Act of 2016 (S. 2012); however, absent an appropriations bill, the spending portions of the authorization would be curtailed.

What is Left?

In the absence of comprehensive energy legislation, alternative methods for supporting clean renewable energy technologies are understandably pursued. Most recently, the Clean Power Plan (CPP) has served as a prominent surrogate of support for renewable energy deployment. Although the status of the CPP is currently in question as a result of the U.S. Supreme Court’s (SCOTUS) decision to stay EPA implementation, pending the decision of the D.C. Circuit Court of Appeals, it represents the clearest alternative approach to a national energy policy.

Whether or not the CPP is found legal by SCOTUS is not really the issue. What is at issue is whether or not such an approach is realistically a good substitute for a national energy policy.

The answer to this question depends to a significant degree on how one chooses to define what “good energy” policy is. More specifically, renewable energy advocates and key decision makers must consider the importance of technological diversity to meeting U.S. environmental and economic goals.

In the past, the principal purpose of national programs and policies in support of renewable energy and energy efficiency technologies was the development and commercial deployment of a panoply of technologies thought able to accomplish the transition of the energy economy from fossil fuels to renewables.

Rather than the goal of technological diversity, the objective of the CPP is measurable reduction of carbon emissions. The U.S. Environmental Protection Agency is careful to point out that the plan is technologically agnostic. While it is true that there is nothing preventing a state from crafting a compliance plan that relies upon a diverse portfolio of renewable energy technologies at various stages of market readiness, the practical consequence of compliance is quite different.

The plan’s focus on reducing the carbon footprint of the electric generating sector promises to have a stultifying impact on the development and commercialization of newly emerged or emerging clean renewable energy technologies. Most, if not all, states are likely to choose expanded reliance on solar and large wind or conversion/construction of generating plants powered by natural gas. In addition to these generating technologies is the potential for improved efficiencies.

The reasons for choosing these four options are clear. They are presently cost-competitive and proven technologies, i.e., large wind and solar, that are more than capable of meeting the CPP’s reduction goals. For the states, there is little to no motivation to assume the risk of investing in future technologies.

State policy is long on support for proven and economically competitive clean energy technologies but short on the ability to stimulate investment in more speculative emerging renewable sources. Long-term, high-risk research has traditionally been within the primary purview of the federal government. The CPP does nothing substantive to change the historic division of responsibilities.

What is Lost?

The absence of a focused and financed federal energy policy greatly limits investment in a diversity of renewable energy technologies. Worldwide, a record $328 billion was invested in solar, wind and other renewable energy sources in 2015. Only wind and solar power saw an increase in investment in 2015. Wind power investment rose 4 percent to $109.6 billion and solar gained 12 percent.

What is lost, or at least greatly diminished, is needed investment in renewable energy technologies that may not otherwise be ready for prime time but hold promise for the future. It is a significant loss and should not be ignored. Technological diversity is as important to the health of economic systems as it is to eco-systems.

If we are ever to have a chance of making a complete transition away from fossil fuels—all fossil fuels—without the loss of economic growth, a larger portfolio of renewable energy options will be required. The future starts today, and I believe it incumbent upon policy makers not to substitute environmental regulation for energy policy but to supplement one with the other.