“You can always count on Americans to do the right thing – after they’ve tried everything else.” Winston Churchill made this statement in the context of a World War and a Cold War. Today, the context is a new “arms race” – to be the global leader in energy security technologies encompassing clean energy sources, energy transmission and storage, and energy efficiency. The question is – can we win this technology race without a clear, focused, and forward-thinking federal energy policy?
“You can always count on Americans to do the right thing – after they’ve tried everything else.” Winston Churchill made this statement in the context of a World War and a Cold War. Today, the context is a new “arms race” – to be the global leader in energy security technologies encompassing clean energy sources, energy transmission and storage, and energy efficiency. The question is – can we win this technology race without a clear, focused, and forward-thinking federal energy policy?
At the GridWise Global Forum this past week, a parade of speakers highlighted the need for a coherent national energy policy. Silicon Valley venture capitalists are also vocal about the need for market certainty promulgated by federal and state energy policies to aid the flow of investments into Smart Grid technologies and new energy sources. Jeffrey Immelt, CEO of General Electric, said during a presentation at GridWise, “The rest of the world is moving 10 times faster than we are. This is a great country. But, you know, we have to have an energy policy. This is just stupid what we have today.”
What we have today in the USA is an extremely fragmented energy ecosystem. There are over 3200 utilities ranging from investor-owned utilities (IOUs) to municipals and rural cooperatives. There are 50 state regulatory agencies focused on retail electricity, gas, and telecom, involved in rate setting and consumer issues. The Federal Energy Regulatory Commission (FERC) has oversight of interstate transmission and wholesale electricity rates. The North American Electric Reliability Corporation (NERC) has a mission to ensure the reliability of the bulk power system. There are Independent System Operators (ISOs) and Regional Transmission Operators (RTOs) that coordinate regional power markets and transmission. In contrast, nations like China and Australia have simpler regulatory structures, and can formulate and enact energy policy on a national scale.
While there may not be any quick fixes to achieve a more rational regulatory structure in the USA, the federal government is taking positive steps as outlined by Secretary Steven Chu of the Department of Energy (DOE). For instance, overall electric grid security is extremely important to national security, and a natural focus for federal action. $30 M in funding allocations recently were announced for R&D and coordination between the public and private sectors in cyber security technologies. The Advanced Research Projects Agency – Energy (ARPA-E) funds early-stage, innovative technologies that could be potential-gamechangers. Recent investments are in energy storage, efficient energy transmission, and advances in cooling technologies for buildings. As Dr. Chu pointed out in his speech at the GridWise Global Forum, some of the greatest challenges are not technical – they are behavioral. Getting Americans to change their energy consumption habits will not be easy, and requires outreach and education from a variety of entities and through a number of media channels.
The progress towards a Smart Grid, especially when contrasted to other nations, highlights the problems with our current regulatory practices, our aging infrastructure, and our lack of a federal energy policy. Thinking that we can continue as is with the current systems, technologies, and subsidized fossil fuels is not a policy that wins this energy technology race. Will we do the right thing, as Churchill observed, to succeed in this new global competition?
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