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Archive for the ‘Clean Energy Program’ Category

Learning from Germany’s Clean Energy Missteps

September 20th, 2013

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American clean energy advocates like to tout the latest European energy accomplishments as proof that the United States is falling behind. Clean energy provides 25 percent of Germany’s energy demand! Germany has the greatest share of wind and solar among the G20 countries!

These are important accomplishments, to be sure. But this rapid growth has come at a cost: the highest energy prices in Europe. Are there ways we can achieve the milestones that Germany has reached while avoiding the economic downside of high costs? A new report by the respected German newspaper Der Spiegel provides some hard truths, and a look at three important lessons for us in the United States:

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Bipartisan and Pragmatic? What’s not to love?

September 11th, 2013

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Let’s be clear: the time for energy efficiency is now. We’re beyond the days of comprehensive energy legislation; cap and trade is dead and buried, carbon tax a policy for a far-off political future. In this age of incremental improvements, many issues, from fracking to nuclear, are divisive. That’s exactly why Third Way strongly supports advancing energy policies in smaller, yet still important components.  Efficiency is one topic that everyone can agree on – it saves Americans money and makes our economy stronger and more competitive. The Energy Savings and Industrial Competitiveness Act acknowledges the political realities of today and has earned support from both sides of the aisle.

If the time for energy efficiency is now, what could go wrong?

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Congress Sends Hydro Reforms to President’s Desk. What’s the Next PowerBook Policy to Pass?

August 7th, 2013

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In a Congress that is setting records for its ineffectiveness, the last week of July 2013 offered a glimmer of hope. For the first time in four years, the Senate and House passed substantive energy legislation and sent it to the President’s desk. Make no mistake, these two successful bills (which reform the licensing of hydroelectric dams) are not going to radically alter the country’s energy system. But that’s the point: despite the enormous divide between the Senate and House and Democrats and Republicans, Congress was able to agree to small, but important, changes in energy policy that will help increase clean electricity in the US. As we found in the development of the PowerBook, a tool we developed for policymakers to build clean energy policies, this is a model that can be replicated.

The two bills Congress passed are simple enough. One expands the ability of the federal government to develop hydropower on its existing water resources. The other streamlines the permitting process for new hydropower projects. These ideas are representative of the targeted, bipartisan ideas we included in the PowerBook. They are built on a basic premise: that there are lots of small “nuts-and-bolts” issues that legislators from both parties can get behind and move through Congress, even if the House and Senate can’t agree on larger pieces of legislation.

Even on hydropower, there are more incremental steps Congress can take. Most pressing is to make it easier for utilities to modernize existing power dams. More than five-dozen major dams are still stuck using inefficient, 1960s-era technology to generate electricity. Minimal funding by the US Bureau of Reclamations could change that, and lead to the addition of 225 MW of clean energy to our grid. That’s enough energy to power approximately 168,750 houses, which is the entire housing stock in the city of Pittsburgh. The legislation that just passed, combined with the other hydropower proposals in the PowerBook, could create as many as 48,000 jobs and power at least 6.2 million homes, primarily across the South and Midwest. That’s a huge benefit to the country, all from just three little policy proposals.

The good news is that there are plenty of similarly small policy ideas that could make a big impact in the PowerBook. If all of our current policies in the PowerBook were implemented, the U.S. would save 473.6 million barrels of oil, add over 1.8 million gigawatt-hours of new clean energy to the grid, and eliminate 2.45 million tons of conventional pollutants (CO, NOx, SO2, PM10, Hg) from its skies. If the action by the House and Senate on hydropower is any indication, there’s even a chance that energy policy offers Congress an opportunity to buck it’s “do-nothing” label.

This piece was co-written with Sam Cramer, Clean Energy intern at Third Way.

Stick to Targeted and Discrete Policies

May 15th, 2013

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Energy policy is difficult to move, in part because there’s really no such thing as a “must-pass” energy bill. It doesn’t carry the same urgency or institutionalized process as certain annual taxing and spending bills, and it certainly doesn’t generate the same passion in the electorate as health care, immigration, or other social policy priorities. Let’s face it…energy policy is the stowaway, not the train. You can slip a discrete energy policy into a larger vehicle, as we saw with the PTC’s inclusion in the fiscal cliff deal. But building a large, comprehensive energy bill in this political era is basically the equivalent of a dozen stowaways standing by the tracks deciding to tie themselves together. Good luck with that, guys.

Recent movement of hydropower and efficiency bills, along with bipartisan support for master limited partnerships and ARPA-E, has shown us the potential for passing targeted energy legislation in this Congress. Perhaps these particular issues are unique in that they tend to gin up relatively little controversy. But an incremental and targeted approach can be effective with contentious policies as well. Returning to our earlier example, the PTC for wind has become a target of hyper-conservative groups in recent years. Yet a significant block of Republican lawmakers, including tea party favorites like Steve King and freshman class president Kristi Noem supported the extension. To be precise, they actually FOUGHT for it, pressuring their leadership and colleagues to move the provision. Focusing solely on the PTC for wind allowed geography to trump partisanship. This prioritizing of parochial issues over political ideology is a well-known phenomenon in energy policy, and it has often provided opportunities for compromise and progress in Congress. But the influence of the “geography effect” is diminished once the policy in question is merged with others that are of less interest or that present a conflict for lawmakers.

For the House and Senate, the strategy that seems to be showing the most promise is to keep it simple (and practical), stupid. Smart policy initiatives will minimize variables that give lawmakers a reason (or an excuse) to vote against clean energy interests that matter to folks back home. And they will take advantage of unique coalitions that each individual issue can bring to the table based on geography, local economies, etc. Legislators can also encourage the Administration to continue its use of executive orders to increase efficiency and clean energy procurement within federal agencies, and to pursue collaborations with industry to iron-out regulatory hurdles that could slow the adoption of clean technologies.

The bottom line is, there is plenty to be done. It just can’t be done all at once. So pick your spot on the apple and start taking a bite.

This piece was originally published in the National Journal Energy Experts Blog.

MLP Bill, With or Without Tax Reform

May 1st, 2013

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Comprehensive tax reform is long overdue, but it’s also going to be difficult and may not happen during this, or even the next, session of Congress. In the meantime, we can’t hold up other tax code fixes, especially in vital areas, such as energy. The MLP Parity Act, a fix to our unequal tax code, shouldn’t be delayed just because it doesn’t fix all of the problems with our current tax code.

As it stands now, the government is implicitly telling investors what to invest their money in. Master limited partnerships are attractive investments, passing profits through to investors without being taxed at a corporate level. This appealing financial structure draws in more capital and lowers the cost of capital for projects owned by an MLP. Unfortunately, under our current tax code, qualifying projects are generally oil and gas related – pipelines, extraction, refining or exploration – excluding many types of energy, from biomass to nuclear to wind. As a result, a project such as a wind farm is less attractive to investors and must offer a higher return than a comparable natural gas project.

This bias in the tax code unfairly picks energy winners and losers, incentivizing the types of energy projects that were common in 1981 when master limited partnerships were first created. Although our fuel supply has changed, the tax code has not, leaving clean energy out of the investment pool. While it may not fix all the inequity in our arcane and complex tax code, the MLP Parity Act is a much needed first step towards an even playing field for our energy future.

This piece was originally featured in National Journal.

Failing to Succeed: Fisker’s Demise Offers America a “Teachable Moment”

April 29th, 2013

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By: Woei Ling Leow* and Ryan Fitzpatrick

The tragic losses of Apollo 1 did not petrify the U.S. and derail the Moon Shot program. The collapse of Henry Ford’s first car company did not mean that the world would never want his product. And the demise of Fisker does not condemn the electric vehicle (EV) to certain failure.

If anything, Apollo 1 strengthened the resolve of those involved to do better. It also provided NASA with information and experience that would one day be critical to successfully landing Apollo 11 on the moon and ensuring the safe return of the Apollo 13 crew despite overwhelming odds. Apollo 1 was a great teacher, and perhaps its biggest lesson is that a nation cannot be held back by individual losses if it intends to achieve greatness.

Yes, Fisker is in the tank. But like Apollo 1, lessons will be learned from this failure. For one, future entrepreneurs and venture capitalists will take note of business strategies that are helping Fisker’s competitors succeed. For instance, Fisker focused on body styling and depended on other companies for technology. Tesla, on the other hand, developed its own technology that eventually brought in revenue streams through partnerships with Toyota and Daimler.

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