How to be a New Energy economy powerhouse

Take a state, any state. What would transform that state into a New Energy economy powerhouse?

Great sun? Nevada has awesome sun but doesn’t place among the top fifteen in the rankings in Clean Edge’s A Future of Innovation and Growth. Great wind? The Dakotas and most of the Midwest didn’t make the list and Texas came in fifteenth. California is at the top of the list but Massachusetts, Oregon, Colorado and New Jersey round out the top five on a Leadership Scorecard that compared the 50 states in 56 categories from regulatory and financial incentives to knowledge capital and the available workforce.

The obvious answer is that resources are good but developing them is even better. Developing them requires the right regulations, incentives and infrastructure. The right regulations, incentives and infrastructure depend on the state’s resources. The Clean Edge paper says there are, however, growth-driving principles that will apply everywhere.

The first principle: Make New Energy (NE) a high priority. The entrenched political power of the Old Energies closely protect the subsidies and incentives long provided to the traditional sources of power generation. Without a slate of compensating subsidies and incentives for New Energy, setting a new agenda is pointless. If NE gets the legislative and economic emphasis that gives it a level playing field, it can thrive. ::continue::

With and without the blessings of New Energy assets, the states that Clean Edge calls the leaders have three things in common beyond simply giving New Energy high priority: (1) Strong commitments to Energy Efficiency (EE), (2) a range of policies that require and drive the growth of NE and EE, and (3) university, research and development institutions committed to innovation.

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After establishing a framework for what will effectively grow a state’s New Energy economy, Clean Edge took a detailed look at Massachusetts. It is a state with modest sun, wind mainly only off its coast and undistinguished geothermal and hydrokinetic resources. Clean Edge identified Massachusetts’ strengths and weaknesses and formulated a list of nine key actions. They were sculpted to Massachusetts’ unique characteristics but will, in a more generalized way, turn any state into that New Energy economy powerhouse:

(1) Establish a center that focuses on research, development and deployment of EE and get a Department of Energy (DOE) laboratory for the state.

(2) Create aggressive NE and EE financial incentives.

(3) Establish a Green Bank-like institution to make financing of NE and EE projects more readily accessible.

(4) Create routes for NE and EE R&D to be deployed and get commercialized.

(5) Make it possible for EE improvements to be reimbursed through utility bill credits.

(6) Make EE building standards and regulations more demanding.

(7) Get the permitting of NE and EE projects done more quickly and easily.

(8) Push for a national policy to cut greenhouse gas emissions (GhGs).

(9) Design all policies to enhance the state’s resource strengths.

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This post is based on A Future of Innovation and Growth: Advancing Massachusetts’ Clean-Energy Leadership (April 22, 2010, Clean Edge)

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