Observations on The National Clean Energy Summit
I had the privilege of attending the National Clean Energy Summit in Las Vegas on August 18th and 19th. Sponsored by Senate Majority Leader Harry Reid, the University of Nevada Las Vegas, and the Center for American Progress, the summit brought to together an extraordinary number of state and national policy makers to discuss the mandate for a clean energy agenda.
The conference opened with President Bill Clinton and included such major luminaries as T. Boone Pickens, Robert Rubin, and Michael Bloomberg, not to mention the governors of Arizona, Colorado, and Utah. In addition, there were speakers from academia, utilities, finance, and technology related initiatives.
I want to share some of my observations:
First, there is a mandate for a clean energy future. It is bipartisan and it is imminent. Greenhouse gas emissions and our dependence on foreign oil are the driving factors. While state and local governments are well in front of the federal government, policy makers are anxious for Congress to take decisive action.
Second, there were a number of common themes expressed by the vast majority of speakers -- so much so -- that they virtually became the “holy grail” of the summit. Here is what they are:
- Tax Credits - Speaker after speaker called for the extension of current energy tax credits. Beyond that, longer term tax incentives (in the form of both guarantees and credits) were considered essential to jump start and sustain solar, wind, and geothermal industries.
- Energy Conservation and Efficiency - The great low hanging fruit of clean energy. President Clinton’s “no brainer.” The thought is that through energy conservation and efficiency initiatives new generation can be avoided. Paths included utility decoupling, along with utility incentives, longer term financing, and application of new technologies, particularly in lighting and smart meters.
- A Price on Carbon - Unanimity that carbon had to have a price, for social, health, and economic reasons. Most of the time, this meant a cap and trade system. Mayor Bloomberg called for a straight-forward carbon tax. The prevailing view was that it didn’t matter who became next President as both candidates were committed to sign cap and trade legislation.
- The Electric Grid - Perhaps the most prevailing theme was the call for a revamped national transmission structure. In short, both wind and solar are located where the grid is weakest -- wind in the Midwest and solar in the Southwest. A projected $60 billion will be necessary to create an effective national grid that moves these cleaner fuels to populated markets.
The big surprise at the summit, at least to me, was Dan Reicher’s, of Google, presentation that the future of clean renewable energy lay primarily in “enhanced” geothermal energy. In essence, enhanced geothermal means uses the earth’s abundance of hot spots as a heat exchanger. Holes (using newly developed and less expensive drilling technology) are drilled to these hot zones, water is poured into the hole, and steam rises to drive turbines. Google is convinced we can produce massive amounts of clean electricity world-wide using this process.
Other observations:
Coal - At least with respect to the summit attendees, unless the coal industry finds a way to sequester carbon safely, the future of coal is bleak. The irony, of course, is the projected growth in new coal-fired plants to meet rising demand.
Offshore Drilling - Most speakers, including Senator Reid, felt offshore drilling in sensitive areas would not have a meaningful impact on prices or supply. Nevertheless, Senator Reid indicated an offshore drilling “compromise” would pass the Senate this year. This was interpreted as lifting the federal ban, but giving states the right to veto development.
Biofuels - The food-for-fuel issue was much in evidence. Numerous speakers called for the shift from food based ethanol to waste based ethanol (cellulostic). Hope seems on the horizon with new technologies.
Federal Renewable Portfolio Standards - Another virtually unanimous call. While 23 states and the District of Columbia have some form of renewable energy portfolio mandates (often 20 percent), there was a definite call for federal standards. Look for this to be included and probably pass in next years cap and trade legislation.
Autos - While T. Boon Pickens called for natural gas powered vehicles (at least in the short-term) most speakers believe in a future powered by electric cars. President Clinton said that 100 mpg cars are now technically available using supplemental batteries in conventional hybrids. Other speakers stressed the reduction in green house gas emissions using electric vehicles even if the electricity was based upon coal-fired generation. FERC Commissioner, Wellinghiff, went even further saying that electric-fired cars would provide such a significant benefit to the utilities, that we would be paid to charge them.
Financing - According to Jon Creyts of McKinsey, the upfront capital required to significantly reduce our GHG emission (which will be a projected 9.7 gigatons (a billion tons) of CO2 in 2030) will be approximately 1.5 percent of GDP. While I need to figure out how much that is, suffice to say that upgrading the national grid alone is expected to cost $60 billion. Bank of America predicted its investments would total $20 billion over the next 10 years. Collectively, the financial sector is looking for tax incentives and the maturing of the carbon markets.
Nuclear - Only one speaker brought up nuclear energy. Activists in the audience objected to nuclear transportation and waste. Despite the fact that nuclear constitutes 20 percent of current usage and is clean burning, it was conspicuously avoided.
