What would you say if you had five minutes alone with Obama on energy? EnergyEfficiencyMarkets.com asked Jules Kortenhorst, CEO of the Rocky Mountain Institute, in the first article of this occasional series.
What energy idea would you discuss with Obama if you had five minutes alone with him? What argument would you use to win him over to the idea?
The United States needs to double down on energy efficiency. We made great efficiency strides in the wake of the oil embargoes of the 1970s, when U.S. energy consumption per dollar of GDP dropped five times faster than it had over the previous quarter century. But while the energy intensity of our economy has continued to decline, albeit much more slowly, we can do better. Energy efficiency remains the lowest-cost source of energy, and the cleanest kilowatt is the negawatt you never have to burn. The inefficiencies still embedded in our buildings, cars, electronics, and more offers a wealth of economic opportunity to unlock. That’s also why—whether you care about the economy, or climate, or another motivation—energy efficiency is a no-brainer that should garner broad bipartisan support.
If Congress agreed to pass one energy bill, and you got to write it, what would it do?
While the new EPA regulations curbing power sector carbon emissions are an important step in addressing climate change, institutionalizing more aggressive climate mitigation through a bipartisan act of Congress—something more robust and less easily undone than the President’s executive order—is a clear next step. Such a bill could include a carbon tax or carbon cap under a technology-neutral feebate program … an approach enabled by policy, but moved forward through markets. Such a bill wouldn’t burden the economy, but rather profit it. Climate change mitigation turns out to be not just exceedingly cheap, but economically profitable. RMI’s own rigorous analysis, Reinventing Fire, found the U.S. could transition to a 2050 economy energized by tripled efficiency and 75 percent renewables for a $5 trillion net-present-value savings—not net cost—while supporting a 158 percent bigger U.S. economy and slashing carbon emissions to 82–86 percent below 2000 levels.
If you had the undivided attention of every PUC commissioner in the US for three minutes what would you talk about?
The urgent need for new business models that address the rapidly evolving nature of today’s power grid is the most pressing issue facing the utility industry. From debates about the future of net metering in many states to contentious interconnection delays for rooftop solar in Hawaii, as customer adoption of distributed energy resources continues to grow at an ever faster pace, utilities—and the state-level regulators that govern them—need to revisit their traditional business models. The “old” way of recouping major infrastructure investment through kWh sales is proving increasingly antiquated. This is not a hypothetical future but a near and present reality. For example, RMI’s recent report, “The Economics of Grid Defection,” analyzed when and where solar-plus-battery systems could reach parity with retail electric prices. A forthcoming Electricity Innovation Lab (eLab) paper explores what future business models could like via alternative pricing, but it’s clear we must develop and adopt regulations and rate structures that enable the evolution of a 21st century grid that is clean, affordable, and reliable.
You’re in an elevator with the FERC commissioners, and they ask what’s on your mind when it comes to energy policy. What would you say? You only have a minute before the elevator opens, and they all get out.
The U.S. is blessed with abundant, concentrated sources of domestic renewable energy, from Southwest sun to Midwest wind. But those sources are often located far from the population centers they serve. FERC will have an increasingly important role to play in helping to deliver power across interstate transmission systems as renewables grow in scale. RMI’s Reinventing Fire analysis shows how we can power the U.S. with 80 percent renewables by 2050, half of them distributed on places like customers’ rooftops. But that leaves another half of utility-scale renewable generation that we’ll need to transmit from the places where we source it to the places where we consume it. FERC will have an integral role to play there.
This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.