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CESA Members Brief Congress on Importance of Federal Support for State Clean Energy Innovations

Thu, 06 Jun 2013 00:00:00 -0400

Although Congressional progress on comprehensive energy policy is stagnant, states are moving ahead with visionary clean energy projects and programs of their own.

On June 4, five members of the Clean Energy States Alliance (CESA) briefed members of Congress, congressional staffers, and other stakeholders on a selection of their recent policies, projects, and projects. The briefing was held in conjunction with the Environmental and Energy Studies Institute (EESI). To review a recording of the event, see http://www.eesi.org/060413CESA.

Sara Fisher-Goad of the Alaska Energy Authority briefed the standing-room-only crowd on her state's Susitna-Watana hydropower project. The project site is located on the Susitna River and is 22-32 river miles upstream from Devil’s Canyon, which acts as a natural fish passage deterrent. When completed, energy generated from the dam will serve about 80 percent of the state's population. Fisher-Goad estimated that 1,000 jobs will be created during the project's construction phase.

"We’re not talking going 100 percent hydro. Diversification of our resources is very important," Fisher-Goad said. "In Alaska, energy costs and resources vary greatly by region. Many areas are diesel-dependent, and some people in Alaska pay $1 per kilowatt hour for electricity. ... The 50-year average rate projection for Susitna-Watana is 6 cents per kilowatt hour."

Commissioner Andrew McAllister of the California Energy Commission shared the success of his state's customer-side solar efforts through the California Solar Initiative.

"California has huge goals for energy efficiency and renewable energy. Gov. Jerry Brown has set a goal of 12,000 megawatts of localized renewable energy supply by 2020," McAllister said. "We’re scaling up solar on new and existing buildings tremendously. Public private partnerships are here to stay."

The California Solar Initiative is a $3.5 billion effort by the California Public Utilities Commission to get more solar on rooftops in the state. And it's working: In 2011, California became the first state to surpass the 1,000 megawatt mark for customer-side installed solar capacity. To date, the state has seen more than 151,000 installations, representing 1,565 megawatts of installed capacity.

The California Solar Initiative's ultimate goal is to reach 3,000 megawatts of customer-installed solar, and to establish a state-wide solar industry. With more than 25,000 jobs created already, the program is off to a promising start.

McAllister stressed the importance of federal policies: "The federal government really is a key partner in this. The federal investment tax credit is extremely valuable to businesses and investors. We need continuity on that over time."

Andy Brydges gave the audience an overview of the Massachusetts Clean Energy Center's overwhelmingly successful Solarize Mass program, which has driven commitments to install more than 5,000 megawatts of community solar electricity capacity. Thirty-one communities in Massachusetts have participated in the program to date; communities choose contractors, provide a "solar coach" who can answer 90 percent of questions, and empower volunteers to encourage their neighbors to join. The larger the installation, the better the price.

Brydges, who is transitioning to a new job with Connecticut's Clean Energy Finance and Investment Authority (CEFIA), also presented about Solarize Connecticut, a parallel but similar effort to increase investment in residential solar in that state. According to CEFIA, the effort has been a similar success story: "This has driven the solar payback period down to just over six years. Now the challenge is to make solar more affordable for low-income customers. CEFIA, as a green bank, has created a solar loan program — and a variety of other financing packages — to help.

Anne Eisele, Chief of Staff of the Maryland Energy Administration, shared details of her state's groundbreaking offshore wind legislation, which was signed into law in April 2013. The bill mandates construction of a 200-500 megawatt ratepayer-supported wind farm off the coast of Ocean City, MD. Using a $30 million Offshore Wind Development Fund, formed during a settlement of the merger between Exelon and Constellation Energy, the state will conduct research and gather data that will give more confidence to developers.

Eisele said Maryland aims to reduce energy demand by 15 percent by 2015 and to generate 20 percent of its electricity from renewable sources by 2020. Building an offshore wind farm will help the state reach that ambitious goal. Furthermore, Maryland offshore wind will develop the state's ports and its manufacturing sector, adding jobs for highly skilled laborers and engineers.

The final presenter was Lewis Milford, President of Clean Energy Group (CEG) and the founder of CESA, who stressed the need for the federal government to provide better credit enhancement support to states. Through CEG's partnership with the Council of Development Finance Agencies (CDFA), Milford has worked to create the Clean Energy and Bond Finance Initiative (CE+BFI) and advance a model for improved credit enhancement, called the State Clean Energy Finance Initiative.

Milford also discussed the need for "resilient power" and a modernized electricity grid to support homes, businesses, and large institutions in the wake of natural disasters like Hurricane Sandy.

"Hurricane Sandy has changed the political dynamic about doing something," Milford said. "It doesn’t matter whether you believe in climate change or not. Governors in the Northeast are putting serious money into revolving loan funds and taking this seriously."

Milford said the federal and state governments should mandate investments in critical facilities, such as hospitals and research institutions.

"Why doesn’t NIH do more to make sure entities like NYU Medical School don’t go black? Millions of dollars of medical research, done with your public money, were lost when Sandy hit," Milford said. "Maybe you all lost the cure for cancer, because in the basement of NYU Medical School there were millions of genetically engineered mice that were designed for specific cancer tests, and they were all destroyed. Is that worth a little money? Maybe so."

The presenters took several questions from the audience at the briefing's conclusion, sharing more expertise and insight from their on-the-ground experience.

"Energy is a critical issue for our economy, for our nation, and obviously is on the front burner of so much that is discussed," said Carol Werner of EESI. "It is only through understanding the kinds of investments that are happening across the country that we can think of the potential we have when we work together."

Watch video of the briefing and download slides by the presenters on the EESI website: http://www.eesi.org/060413CESA#speakers

Resilient Power -- A New Business Case for Clean Energy

Fri, 31 May 2013 00:00:00 -0400

For years, people have put solar panels on their roofs -- and states have helped fund them -- to clean up the environment. Now, after Hurricane Sandy and the real threat of more severe storms, there's another reason for solar: keeping the lights on.

A new "power resiliency" market is developing in the areas hit hardest by Hurricane Sandy. Some governors and policy officials are motivated by climate change, while others are driven by a clear-eyed sense that there will be more dangerous storms in the future, whatever the cause. In both cases, they see the need to act.

Several northeastern states, for the first time, are launching new programs and funding to put more clean and resilient power in homes, offices and buildings, to keep power on when the next storm hits. Companies are also targeting this market with clean energy systems that can continue to provide behind-the-meter power when the grid fails. These systems include solar photovoltaics matched with batteries (solar alone does not work during grid outages), combined heat-and-power systems, and fuel cells.

This is an entirely new business model for clean energy. It follows the principles of leading technology strategists such as Clayton Christensen of Harvard Business School. In his seminal book, The Innovator's Dilemma, he wrote that for clean energy to be "disruptive," it must offer customers new functions and values that the market does not now deliver. This drive to make local power more resilient than utility power has a good chance of making clean, resilient energy truly disruptive and competitive.

So far, most companies and public programs have promoted these smaller-scale, distributed generation (or DG) systems as environmental technologies that will reduce greenhouse gas and local emissions. Even though they would get cleaner air, many customers do not want to pay more to clean up the environment; it's the public's job, they say, not theirs. But now the clean energy world is changing to give those customers something else of immediate and direct value -- protection from power outages.

As we all painfully know, one of the most damaging after-effects of extreme weather events like Sandy is the loss of electric power. More than 8 million people lost power during Hurricane Sandy, many for weeks, causing enormous economic harm and personal hardship, and threatening the resiliency of local communities. Basic well-being was threatened by the loss of life's basic most needs -- a warm and safely powered home and business.

These storms revealed what energy insiders have known for years: the current power system, based on centralized generation and relying on above-ground wires threatened by falling trees, is not reliable enough during extreme winds and storms. In the past, when a storm meant lost power, state policymakers usually called for more of the same -- transmission upgrades or other incremental measures to preserve the utility status quo and keep the central power system intact. But that system fails to give customers reliable power when they need it the most.

Following Sandy, Northeast governors and policymakers now are moving in a new direction. They, along with some progressive utilities and new energy startups, know that the electricity system can be made more resilient in new ways. They have begun to create new business models for clean resilient power. Here is some of what states and companies are doing.

The State of New York has plans to invest more than $60 million for more resilient power systems in critical infrastructure, along with creative ways to provide bonus incentives for new systems sited at these important facilities of refuge.

Because of Sandy, the leading New Jersey utility plans to invest more than $450 million in new solar systems around the state, according to the utility president, "because something more needs to be done in terms of grid resiliency." Clean Energy Group and Clean Energy States Alliance have released a new report on how RPS laws can be designed for more resilient power.

The New Jersey utility regulator plans to require utilities to invest in "storm response" energy measures, including smaller-scale, combined heat-and-power systems.

New Jersey also is looking at how to use bond proceeds to finance more resilient power systems at wastewater treatment plants, which often fail to run during outages.

The governor of the State of Connecticut wants to invest $45 million in micro-grids, to firm up local power systems during outages and create "islands of energy security."

Companies like New Jersey-based Solar Grid Storage are promoting ways to incorporate battery technology and new financing models to get resilient solar systems into commercial buildings around the region.

Federal and state officials want to see how to get more resilient power to gas stations, which typically lose power and cause major disruption to motorists during storms.

The City of New York issued an "after action" report this month on Sandy impacts that called for more resilient power for street lights, to develop healthcare communications systems that don't fail during storms, and to create better power plans for multi-family housing; as a sign of the importance or power supply issues, a third of the report deals with power outages.

Maryland is funding the first integrated system using solar energy and batteries to power buildings and electric vehicles as well as the power grid; and a solar-powered microgrid to supply power to a mixed-use development in the event of a grid outage.

Massachusetts has funded projects for experimental batteries for grid protection and is about to commence a study of district energy systems for outage protection.

New federal rules issued by the Federal Energy Regulatory Commission allow small-scale resilient energy systems with battery storage to get revenue when they operate to firm up the transmission grid, a model that could boost use of these systems.

The trade association for the energy storage and battery companies and the country's leading solar trade association have come together to collaborate on new forms of energy storage and solar technologies.

The push for more resilient, cleaner power is now beginning in earnest, for the first time in our history. Public officials are not content to ignore the power losses and the failure of energy systems to withstand increasingly severe storm damage. They are not standing still or standing pat on old solutions that preserved the status quo. This is the beginning of a revolution in energy economics, giving customers new value from clean energy.

Let's let Clay Christensen, the Harvard guru of technology innovation, explain why this power resiliency strategy is so important to create new uses for clean energy:

If... a company stretches or forces a disruptive technology to fit the needs of current, mainstream customers... it is almost sure to fail. Historically, the more successful approach has been to find a new market that values the current characteristics of the disruptive technology.

The new market for these technologies is the millions of people who are sick and tired of losing power during a storm, losing business during an outage, or maybe even risk losing their life without power.

You don't have to be an environmentalist to buy or invest in clean energy. You should do that if you simply want to keep your lights on during the next storm.

Link to Huffington Post blog: http://www.huffingtonpost.com/lewis-milford/resilient-power-a-new-bus_b_3367727.html

Charting a Course for Clean Energy

Tue, 02 Apr 2013 00:00:00 -0400

When we’re talking about climate stabilization over the long term, we’re talking about a balancing act: how to scale up zero and low-carbon emission energy sources and how to scale down the use of high-carbon emission sources used today. To think that by 2050 we’ll have a global energy system producing basically zero greenhouse gas emissions seems almost unimaginable. But that’s what we’ll need in order to start bending the carbon curve over the long run so that the earth remains habitable for our descendants. It’s an extraordinary transition we’ll need to go through.

The fossil fuels that currently dominate the energy system are considerably less expensive than their renewable counterparts. And thanks to hydraulic fracturing, or fracking, natural gas is getting even cheaper. The controversial practice has made the commodity so inexpensive and plentiful that it’s displacing coal and nuclear power as America’s primary energy source.

In other words, the main challenge we face is making the cost of renewable energy less prohibitive. We will need additional technological breakthroughs, as well as economies of scale, to continue driving down the cost of alternative types of energy.

Take off-shore wind (OSW) power as an example. We have the opportunity to create a new OSW industry from Maine to the Carolinas, and to create real energy far in excess of anything we can do on land. This new industry would create thousands of jobs, as well as a more reliable power source. It’s a huge opportunity that we as a nation are not even close to figuring out.

We have financed infrastructure though bonds for our public schools, roads, bridges, hospitals, and other facilities. Why not finance energy with a dedicated energy stream for the long-term public good?

The biggest technical problem we haven’t even begun to figure out is this: how do we store intermittent power from renewable energy sources? Solar power production peaks during the day; wind generally peaks at night. But unless there are safe, reliable, economical ways to store that power for when demand is highest, it all goes to waste. With funding from the 2009 Recovery Act set to expire, federal subsidies for energy research are scheduled to fall by 70 percent. Without additional research funds, it is unclear where those new power storage technologies will come from.

In addition to deploying renewable energy on a massive scale, we must figure out how to flip the energy system around so we have more localized, distributed power protecting critical infrastructure.

After Hurricane Sandy hit New York City last fall, one of the many horrifying sights was seeing doctors and nurses at the NYU Langone Medical Center working in the dark after the hospital lost generator power. Hundreds of patients had to be evacuated, but since elevators were down, critically vulnerable patients had to be carried down as many as 15 flights of stairs.

Meanwhile, just blocks away, it was business as usual at Goldman Sachs. If you’re a data center protecting financial transactions in the billions of dollars, there’s no limit to what you’ll spend to prevent the loss of power. We need new policies to encourage critical public and private facilities to deploy renewable technologies like solar with batteries and fuel cells to create power onsite when the lines are down.

All of this requires new financing on a large scale. We have financed infrastructure through bonds for our public schools, roads, bridges, hospitals, and other facilities. Why not finance energy with a dedicated energy stream for the long-term public good?

With no prospects for federal funding on the horizon, the opportunity exists for states to work with the bond markets to raise the billions of dollars needed to construct the near-zero carbon emission energy infrastructure we need in the coming generation.

(This blog is one of a series of writings on Climate Change and Renewable Energy from WBUR in Boston, MA. To see the source and other viewpoints, see http://cognoscenti.wbur.org/2013/04/02/climate-renewable-energy-watson-milford-gordon.)

New Analysis Makes the Economic Case for Offshore Wind

Thu, 28 Feb 2013 00:00:00 -0500

To coincide with Senators Tom Carper (D-DE) and Susan Collins (R-ME) introducing the Incentivizing Offshore Wind Power Act in Congress today, Clean Energy States Alliance’s Offshore Wind Accelerator Project (OWAP) – along with the Center for American Progress (CAP), the Sierra Club, and the U.S. Offshore Wind Collaborative – released a jointly commissioned report that demonstrates how offshore wind can become cost competitive with electricity generated from natural gas by 2024, even without federal subsidies.

The analysis, titled A Learning Investment-based Analysis of the Economic Potential for Offshore Wind and conducted by the Brattle Group, also finds that building an American offshore wind industry would have minimal effect on ratepayers, a large majority of whom are willing to pay a slight rate increase for homegrown clean energy that creates jobs, protects public health, and leads to greater energy independence.

The first of its kind in analyzing the broader economic impact of developing an entire offshore wind industry, the Brattle Group report finds that the national average monthly rate increase for consumers would be between $0.25 to $2.08. Polls in New York, Maryland, and other states have shown that solid majorities of voters are willing to pay a couple dollars more every month to support local offshore wind projects.

To provide a conservative estimate of the economic effects, the Brattle Group analysis does not include any subsidies such as the production tax credit or investment tax credit, both of which apply to offshore wind energy.

Offshore wind can provide the East Coast with a virtually limitless source of clean energy right in its own backyard, with zero fuel costs and without the need to build expensive land-based transmission lines through the region’s urban and rural landscapes. And the good news, as this analysis shows, is that offshore wind power — with scale-up — can become price competitive with carbon-based electricity resources very soon and without hardship to ratepayers’ wallets.

We're excited about this report, and how it will help us advance our mission of getting steel in the water as soon as possible. Visit the Center for American Progress website to read the report and the accompanying briefing paper, Making the Economic Case for Offshore Wind, authored by CAP Director of Ocean Policy Michael Conathan.

REGISTER TODAY (it's free!) for a CESA-OWAP webinar to be held on March 11th about this report: https://www1.gotomeeting.com/register/881946832

State Clean Energy Finance Initiative – A New Federalist Approach to Boost Clean Energy Investment

Mon, 11 Feb 2013 00:00:00 -0500

We at Clean Energy Group are proposing a new clean energy finance recommendation today, to provide states with additional capital so that they can leverage more private investment in clean energy projects and companies.

The unique aspect of this proposal – called the State Clean Energy Finance Initiative (SCEFI) – is that it puts the funding responsibility and accountability at the state level, where all states could use these funds in the best way they know how, instead of having the federal government make funding decisions on investments in clean energy projects and companies. Clean Energy Group has developed this proposal with our partner the Council of Development Finance Agencies (see www.cebfi.org).

While this approach is somewhat new in clean energy, it is based on an existing federal program already in place for small business, run by the Treasury Department. It is called the State Small Business Credit Initiative or SSBCI, which now distributes $1.5 billion to the states. SSBCI, like our proposal, has a requirement to match those funds with other public and private capital but leaves much discretion to the states to create finance vehicles. Our SCEFI model would follow this capital match, and allow states to continue to be clean energy leaders, and to create new financial instruments to suit their state and local needs.

This simple and powerful leverage requirement would be an efficient means of attracting significant private investment to clean energy, and keep investment decisions at the state and local levels, rather than in Washington. It would be a way for states to support new investment instruments like bonds, which are needed to raise capital for the clean energy industry. State could create pooled bond funds and small issue bonds for manufacturers in the clean energy supply chain. By mitigating risk for investors, credit enhancement would raise more capital more efficiently at lower cost to multiple energy projects.

This leverage requirement also recognizes that while continued public support for clean energy in the form of state and other incentives is needed for some time, it must be designed to better leverage private capital. When lenders are reluctant to lend on favorable terms, credit enhancement can be used to reduce credit risk by providing collateral accounts, guarantees or other inducements that reassure the lender that it will be compensated if the borrower defaulted.

Put another way, public subsidy for clean energy will be important for some time to come, but it needs to be “right-sized” so it is better integrated with public credit support programs that induce more private capital investment. This integrated approach will allow clean energy companies and projects to achieve greater scale and tap into capital markets. This is especially needed now, because bank lending is still difficult to access as financial markets continue their recovery from the great recession. There is a strong need to provide more credit enhancement or debt to projects and companies in the clean energy space.

Also, as the clean energy sector matures, it is important to look for other federal agencies to take leadership roles. That is why we propose this program be run by the Treasury Department, which runs the SSBCI program. We believe it is time to take the experience from this SSBCI model and apply it to clean energy—to extend the SSBCI model to help address the capital access challenges confronting clean energy.

And although the program would be housed in Treasury, the underwriting and credit enhancement roles would be placed at the state and local levels where these roles belong. Treasury would develop guidelines defining various structuring factors to a manageable toolbox of program structures, and Treasury would approve each state’s clean energy credit support programs. Each state would have the right to select only the programs it wants to operate.

Establishing a financing-based model to bolster this sector would encourage the development of clean energy at a time when direct appropriations to the industry are facing increased pressure. An SSBCI-like model should be applied to clean energy supply chain companies needing financing for working capital, equipment, real estate acquisition or improvements to their business premises, as well as to project financings of on-site and district clean energy generation limited to eligible technologies size limitations.

Importantly, SCEFI would not create any federal guaranty or obligation regarding the state-financed projects. The limits of the federal role would be to provide credit enhancement dollars to state financing programs and create guidelines for program success.

Although any funding limit would need to be set by Congress at a fixed level, by appropriating $5 billion in funding for clean energy credit support, the proposed program could leverage an additional $50 billion of private and other capital for companies and projects in every state in the nation, requiring little if any additional federal administrative burden. SCEFI is at the concept stage, representing a smarter form of federal support for clean energy.

The details of such proposal, including funding levels, administrative details and guidelines, must be developed. CEG and CDFA are proposing this recommendation now in the hopes of garnering public and governmental support for such a new effort.

Like Federal Renewable Energy Policy, State Policy Is Important and Uncertain

Mon, 07 Jan 2013 00:00:00 -0500

Clean energy advocates have praised the decision in the fiscal cliff legislation to extend important federal energy tax provisions, such as the production tax credit for wind. They have pointed to the hundreds of megawatts of additional renewable energy generation that will be developed because of Congress’s decisions. But the federal policies would not have nearly as large an effect without the existence of complementary state-level policies.

Especially important are the state renewable portfolio standards (RPSs), which require electricity suppliers to secure a certain percentage of the electricity they sell from designated clean energy sources. Despite RPSs’ undeniable success in helping to stimulate clean energy generation, those policies are now entering a period of uncertainty.

RPSs have been established in 29 states plus the District of Columbia. They apply to 54 percent of all US electricity sales. According to analysis by Lawrence Berkeley National Lab (LBNL), if the state RPS targets and timetables achieve full compliance, 93 gigawatts of new renewable energy will be developed by 2035, representing nearly one-third of all projected US load growth between 2000 and 2035.

There are reasons to be both optimistic and pessimistic about the ability of state RPSs to lead to this large amount of new renewable generation. On the positive side:

1. The pace of required development should be manageable. As LBNL points out, achieving the 93 gigawatts of new capacity required by the RPSs translates into less annual renewables development than occurred nationwide between 2008 and 2011. That amount of development was neither daunting nor disruptive.

2. The costs have so far been modest. RPSs have generally achieved their short-term targets relatively easily at a small cost to electricity ratepayers. In all but one state, the electricity rate impact has been less than 2 percent and some states have even experienced net economic benefits and reduced rates from having an RPS.

3. State support for renewable energy has broad support. Most members of the public, as well as a large share of the politicians from both parties, have shown that they like the concept of renewable energy and are willing to support it.

4. A few states are reaching their RPS limits. In a few cases, including California with its ambitious 33 percent renewables goal, the state RPS is in close reach of its final goal. There may be the political will and the technical ability to increase the state goal in future years, thereby compensating for the fact that a few other states may have difficulty reaching their goals.

5. RPSs are encouraging technological innovation. RPS laws, often without a lot fanfare, are helping to drive technology innovation in emerging technologies, such as offshore wind and fuel cells, that could provide more electricity generation in the future.

On the other hand, there are at least four reasons why state RPSs could run into difficulty in the coming years:

1. Federal policy could become less supportive. Just as state policies complement federal policies and allow them to succeed, the converse is also true. State and federal policy are each more effective when they work in combination and reinforce each other. Without some continued federal encouragement of clean energy development, such as a continued production tax credit for wind after 2013 and investment tax credits for solar after 2016, it would become more difficult and more costly for state RPSs to achieve their goals.

2. Low natural gas prices could undercut renewables. Because of current very low natural gas prices, new generating facilities powered by natural gas have a competitive advantage over other forms of new power generation, including renewables. Although natural gas is projected by the markets to rise in price, albeit slowly, in the coming years, it is possible that prices will remain at their current low levels.

3. Future years’ higher RPS targets could be more challenging to achieve. RPSs are generally designed to ramp up slowly over time under the assumption that renewable energy development should be gradual but continual. Having a higher annual target makes total spending on an RPS increase, because ratepayers at any given time have to pay for all the cumulative renewable generation that has come online from the RPS, not just for the current year’s increment. In many states, electricity rates would not go up significantly, because there are RPS rate caps or cost caps in place.

4. Political attacks could increase. In the past two years, legislators in about 10 states filed legislation to eliminate or reduce their state’s RPS. None of these efforts was successful, demonstrating the continued strong political support for renewables, but it is possible that the RPS roll-back efforts will intensify. The American Legislative Exchange Council (ALEC), an association for conservative state lawmakers, has adopted model RPS repeal legislation and is encouraging its members to introduce it in state legislatures. Because the proponents of ALEC’s anti-RPS initiative include deep-pocketed fossil fuel interests and individuals with philosophical opposition to government support for clean energy no matter how small the cost, they are not likely to be dissuaded from proceeding simply by learning about the small rate impacts of most states’ RPS policies.

For all these reasons, people interested in clean energy should closely monitor the RPS policy arena in the coming years. Although it is impossible to predict where things will end up, there are two factors that tilt the balance towards the more optimistic view: (1) with all the recent investment in renewable energy and development of markets for renewables, prices should continue to decline, and (2) there is little reason to believe that the public will turn its back on renewable energy, especially because concern about climate change is only likely to increase over time.

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If you want to learn more about renewable portfolio standards and important developments related to state RPSs, sign up to receive the free monthly newsletter of the State-Federal RPS Collaborative. In addition to RPS news, it will let you know about free webinars on RPS-related topics. The Collaborative is managed by Clean Energy Group and the Clean Energy States Alliance. To learn more, go to: http://www.cleanenergystates.org/projects/state-federal-rps-collaborative.

Warren Leon is Deputy Director of the Clean Energy States Alliance and is the project director for the State-Federal RPS Collaborative.

Sandy’s Power Outages: We Can, And Should, Do Better

Fri, 16 Nov 2012 00:00:00 -0500

I’m looking in disbelief at images of Sandy’s destruction in New York and New Jersey. I grew up near the Jersey Shore, so this is personal. It’s bad up there: lines for rationed gasoline, homes and businesses destroyed, and millions of people still without electricity.

It’s that last point that really sticks with me. The United States can – and should – do better, and we have missed many opportunities to do so.

Twelve years ago, I wrote a New York Times op-ed about how power outages led to lost medical research at Columbia Medical School. Their diesel generators failed and years of research materials were destroyed. I called for tougher backup protections using more modern technologies. The same conventional backup system failures occurred after Hurricane Katrina in New Orleans, and again after power failures at a hospital in Houston.

Last week, it was déjà vu all over again. With power out in lower Manhattan, generators failed at NYU Medical School. Nurses were forced to ventilate newborns as they climbed down 15 floors to evacuate critically vulnerable patients to other hospitals.

Outside of Manhattan, power outages are rampant thorough the tri-state region, shuttering police headquarters, fire stations, schools, homes, polling places, and gas stations – critical public facilities where power failures harm us all. While flooding caused many outages, downed trees over ancient aboveground power lines probably did the most damage. Our current system, with distribution power lines serving our homes and business, is a century old and continues to collapse with each new disaster.

Hurricane Sandy is a grim reminder that repeated failures over the past 15 years have not resulted in better protection from predictable power outages. From crisis to crisis, the loss of power has meant the loss of lives, resources, medical research, and patient protection; idle gas stations; catastrophic local and state economic impacts; and untold misery to millions of people. With more deliberate planning and upgrades to our energy infrastructure, these losses could be mitigated – or even avoided.

These are public emergencies that call for public policy responses. People on their own cannot be expected to fix this problem. After Katrina, I made a series of policy recommendations that were ignored. They are as relevant today as they were then, and I challenge policy makers to take them up today:

Federal

• Require federal mission critical facilities to use clean energy technologies.

• Require direct use of on-site clean energy technologies in reconstruction of critical public buildings.

• Develop federal-state partnerships to fund installations and facilitate joint procurement.

State & Local

• Investigate local opportunities to use on-site clean energy technologies at emergency shelters, first responder stations, and on other critical infrastructure sites.

• Legislatures could require installation of on-site clean energy technologies at state mission critical facilities.

• Create state incentives to support use of clean energy technologies at public facilities.

• Establish incentives for the private sector to install new on-site clean energy protection at hospitals and university laboratories.

These recommendations were disregarded after Katrina, but maybe now – given the statements of Governor Cuomo and Mayor Bloomberg – public sentiment is changing. Moreover, those laws should require some form of technology innovation, so we move beyond our almost sole reliance on diesel generators that often fail, time and again. We need policies to encourage public and private facilities to do more to put new technologies like solar with batteries and fuel cells at customer locations, to create power onsite when the lines are down. Because the power lines will come down again, and the status quo is not working.

Creating resilient clean energy infrastructure for the 21^st century is one of the most pressing financing challenges our time. Clean energy finance now needs to focus on capital markets and bond issuance. This will involve developing strong working relationships between energy fund managers and development finance professionals at the state and local government levels throughout the country. My organization recently launched the Clean Energy + Bond Finance Initiative (CE+BFI), a groundbreaking project that will get these critical partnerships going.

In 1888, a massive snowstorm blanketed New York City, stopping all commerce and gridlocking aboveground trains and trollies as power lines fell. The city stepped in and ordered that the power lines be buried. Within a few years, underground subway construction began as a response to preventing the damage from that kind of storm paralyzing the city once again. The governments acted and paid for the improvements, and New York City is a great city because of it.

We have a similar challenge today, facing a greater threat. This time, it seems that politicians of all stripes understand the need to do more. Will they act to put in place policies and funding that will create a new clean energy and resilient infrastructure?

Let’s hope so. And let’s hope the public keeps reminding them not to forget.

The CESA SLICE Awards: Recognizing State Leadership in Clean Energy Development

Mon, 29 Oct 2012 00:00:00 -0400

Working closely with a variety of state, federal, and private stakeholders puts Clean Energy States Alliance (CESA) in a unique position to learn about numerous creative renewable energy and energy efficiency programs. State officials and agencies are increasingly partnering with the private sector, municipalities, and educational institutions to develop new approaches to recurring issues. The seven programs chosen to receive this year's State Leadership in Clean Energy (SLICE) Awards have developed innovative grid integration solutions, promoted the smart implementation of solar and wind energy technologies, helped grow small cleantech businesses, and created new markets for biomass heating. These programs demonstrate exemplary leadership and innovation in clean energy development.

The California Energy Commission (CEC) and its Public Interest Energy Research (PIER) program received two awards, addressing pervasive grid integration issues by developing a robust microgrid and deploying a Real Time Dynamics Monitoring System. The microgrid, based at the University of California, San Diego (UCSD), integrates a wide range of renewable and distributed energy systems including a fuel cell, several photovoltaic systems, electric vehicles and electric vehicle batteries, a combined heat and power plant, and a thermal storage system. The relative power outputs of the various energy sources can be re-optimized hourly, preserving system stability despite natural fluctuations in renewable energy sources.

The CEC's Real Time Dynamics Monitoring System, a product of its Synchrophasor Research and Development Program, enables system operators to receive better, more complete, and instantaneous information about grid operations. Better knowledge and more control mean fewer outages, improved grid reliability, and an increased ability to incorporate intermittent renewables. The CEC's program has been replicated by the U.S. Department of Energy's national synchrophasor program.

The CT Solar Lease Program, administered by Connecticut's Clean Energy Finance and Development Authority, received a SLICE award for its trailblazing efforts in financing. The first residential solar lease program to involve a public-private partnership, CEFIA’s program pioneered the concept of solar leasing and brought private sector investors on board. The Connecticut solar lease model has been widely replicated, with the result that PV systems are now available across the country to homeowners who would not otherwise be able to afford them. Furthermore, data gathered by this program will inform other states and financial institutions, aiding the design of future renewable energy leasing programs. CEFIA is now in the process of designing a follow-up program that will offer leasing options for solar thermal as well as PV installations.

The Massachusetts Clean Energy Center's Commonwealth Solar Hot Water Pilot Program achieved more than just putting solar thermal collectors on roofs: it also monitored the performance of solar thermal technologies. Feasibility studies for commercial-scale projects helped to standardize site assessments and build installer expertise, while installed commercial and residential projects sent performance-monitoring data back to MassCEC. This information is important for the development of performance-based incentives, and will help to educate stakeholders about the real benefits of well-sited solar thermal systems. Insights from the pilot program have already informed the design of a full-scale program, launched by MassCEC in July 2012.

The New York State Energy Research and Development Authority (NYSERDA) won two awards, for its small wind turbine and clean energy business incubator programs. NYSERDA's On-Site Wind Market Development Program was the first to base incentives for behind-the-meter wind turbines on predicted performance rather than installed capacity. To aid in predicting turbine performance, NYSERDA partnered with several private companies to develop wind resource assessment tools. NYSERDA also requires that qualified systems be installed by certified installers; to support this requirement, NYSERDA has invested in developing policies and procedures to qualify turbines, supported the development of turbine testing labs, and partnered with community colleges to develop installer training programs. Through this multifaceted approach, NYSERDA has pushed the small turbine industry toward maturity, while helping to build a green workforce. NYSERDA's other winning program, the Clean Energy Business Incubator Program, provides funds to six incubators that offer technical and business services designed to support startups in securing additional investment and commercializing new technologies. The program is results-oriented, granting funds only when mentored businesses achieve milestones, and is innovative in supporting and retaining clean energy businesses in New York State.

The New Hampshire Public Utilities Commission (PUC) succeeded in overcoming the all-too-common chicken/egg barrier with its whole-house Residential Wood-Pellet Boiler Rebate Program. To do this, New Hampshire involved wood pellet suppliers in early planning for this program, securing their participation by requiring that all customers install three-ton bulk delivery bins. With suppliers thus assured of profitable deliveries, the PUC was able to assure customers that fuel needs would be met at any location in the state. The program validated wood pellets as a primary heating fuel for consumers, replaced fuel oil heating systems with a cleaner, renewable alternative, and grew supply chains, creating new business opportunities in the state.

Together, these seven SLICE Award-winning programs reflect an impressively diverse array of innovative approaches to clean energy development. Each contributes valuable insights to the development of new programs and incentives. With continuing innovation, collaboration, and information sharing, state efforts such as these can truly pave the way for a clean energy future.

To learn more about the State Leadership in Clean Energy Awards, see http://www.cleanenergystates.org/projects/state-leadership-in-clean-energy/ and download the summary report on the winning programs.

New Report Highlights Atlantic Coast as Ideal Home Base for U.S. Offshore Wind Industry

Fri, 19 Oct 2012 00:00:00 -0400

Clean Energy States Alliances' Offshore Wind Accelerator Project Partners with Center for American Progress and The Center for the Next Generation to Promote Offshore Wind as Atlantic Coast Regional Energy Solution.

As voters contemplate who will occupy the White House and Congress in the years ahead, Clean Energy States Alliance’s Offshore Wind Accelerator Project has partnered with The Center for the Next Generation, the Center for American Progress, and several other organizations to release “Regional Energy, National Solutions,” a nonpartisan report that argues that the United States can enact a long-term strategy to achieve climate stability, economic prosperity, and energy security by using the unique assets of each region of the country and choosing smart places for investment in multiple forms of energy and fuel.

The report was launched this morning at an event where Rhode Island Gov. Linocln Chafee gave a keynote address about the importance of collaborative efforts to advance clean energy across the country. Chafee then participated in a panel discussion with John Arensmeyer of the Small Business Majority and Anne Kelly of Business for Innovative Climate and Energy Policy (BICEP).

"The key was that collaborative effort," Chafee said of his state's work planning for offshore wind. "We are very methodical in our approach to wind energy off our coasts. We know those finite [fossil fuel] resources will be going up in price at some point. So we in New England are looking at alternatives."

The new report responds to a recent vision laid out by the American Petroleum Institute, which suggested clean energy be put on the back burner in favor of aggressive oil and gas drilling, both on shore and off, and coal mining. In contrast, offshore wind is an ideal technology that could contribute substantially to the sustained, long-term energy demands of the Atlantic Coast states. Developing just 54 gigawatts of offshore wind in Atlantic waters would generate $200 billion in economic activity and create 43,000 permanent, well-paid technical jobs, in addition to displacing the annual output of 52 coal-fired power plants, according to the report.

“We know the earth is warming, and resources are finite, and as a country, we simply cannot take a ‘drill baby drill’ approach that keeps us dependent on finite and carbon-intensive resources for our electricity and transportation needs,” said Kate Gordon, director of the advanced energy and sustainability program at The Center for the Next Generation and a Senior Fellow at the Center for American Progress. “Whereas the plan set forth by the American Petroleum Institute relies on centralized energy sources controlled by a handful of companies, our alternative strategy presents a range of energy and restoration projects that involve a huge variety of companies—large and small—in every region of the country. This is a country rich in natural resources and innovative talent—we should build on that to move the United States toward a truly advanced and sustainable energy future."

"Atlantic offshore wind energy is America's golden opportunity to make our energy supply cleaner and protect future generations of people and wildlife from the dangers of climate change,"said Catherine Bowes, Senior Manager at the National Wildlife Federation, and an Offshore WInd Accelerator Project participant. "The best approach to our energy challenges isn't building more pipelines or digging more holes, it is embracing clean energy solutions that don't spill or explode. Properly-sited offshore wind energy can and must play a major role in America's energy future."

Among the report’s other region-specific findings:

• In the Gulf Coast region, each $1 million in investment in ecosystem restoration can create as many as 36 jobs across a huge range of occupations and skill levels—more than equivalent investments in traditional infrastructure projects.

• The Southeast boasts more firms across the high-tech smart-grid value chain than any other region and continuing to lead this transition offers the opportunity to create diverse job opportunities. At the same time, if the region were to cut energy use across the region by 16 percent in 2030, consumer would see an annual savings of $71 billion and 520,000 jobs by 2030.

• In addition to revitalizing American manufacturing, the deep oil savings from vehicles now being built in the Midwest under strong new fuel economy standards mean net savings to consumers of more than $54 billion a year in 2030 and will add 570,000 jobs to the economy.

• The Mountain West boasts nearly unlimited renewable energy resources and these nonhydro projects, either under construction or in advanced development, represent 71,872 jobs. A study by Headwaters Economics found that from 1970–2010, nonmetropolitan counties in the West that had more than 30 percent protected federal lands increased jobs by 345 percent. Nonmetropolitan counties with no protected federal lands saw just 83 percent growth.

• The solar industry in California has experienced significant growth over the past 15 years. Since 1995 the number of solar businesses grew by 171 percent, and total employment jumped by 166 percent. As a point of comparison, the total number of California businesses has grown by 70 percent and employment increased by 12 percent.

The promise of the clean economy is not a mirage or a far-off goal; it’s being felt right now across the country, employing about 3.1 million Americans. In the second quarter of 2012 alone, more than 37,000 new clean energy jobs were announced in projects across 30 states. Recognizing the critical need to enhance our energy security, the U.S. military has become a major proponent of clean technologies such as biofuels, efficiency, and solar, and the world’s largest investors agree that long-term climate change and clean energy policy is a tremendous investment opportunity.

To read the introduction and summary of the report, click here. To read the full report, click here.

About the Offshore Wind Accelerator Project: The Offshore Wind Accelerator Project (OWAP), managed by Clean Energy States Alliance, is a coalition of public, private and nonprofit stakeholders who are working together to break down barriers to offshore wind development in the United States. To learn more, visit www.offshorewindworks.org.

About Clean Energy States Alliance: Clean Energy States Alliance (CESA) is the only national nonprofit organization representing the collective voice of public clean energy funds. CESA provides information sharing, technical assistance services, and a collaborative network by coordinating multi-state efforts, leveraging funding for projects and research, and assisting clean energy programs with program development and evaluation. For more information, visit www.cleanenergystates.org.

Bond Financing for Offshore Wind: A Smart Strategy for State Governments

Tue, 25 Sep 2012 00:00:00 -0400

Offshore wind projects have the potential to provide enormous economic and energy benefits, but their initial high capital costs are frequently cited by opponents as a reason to not pursue them. Offshore wind projects may be able to address this concern by taking advantage of local bond financing, a funding option for clean energy development that has been under-utilized to date.

A recent report jointly authored by the Council of Development Finance Agencies and Clean Energy Group makes a case for using bond finance to advance renewable energy development. The report, Clean Energy and Bond Finance Initiative (CE+BFI): An Action Plan to Access Capital Markets, describes an innovative partnership between the two organizations, which will explore clean energy finance options as well as opportunities for public clean energy fund managers and development finance professionals to work together.

Historically, bonds have been used to finance public projects. When a local government wants to build a school, for example, it takes on debt in paying for the project. It can choose to partition that debt into pieces, called bonds, and sell them to the investing public. The government is no longer saddled with debt for a given project, while investors enjoy a steady interest rate and the full repayment of the bond upon its maturation. Municipal bonds are generally safe investments, and diversifying an investment portfolio with government bonds is considered to be a sound practice. And bonds can be used for private projects, too; in this scenario, the government still issues bonds, then loans the proceeds to the borrower, who makes payments to match the bonds' interest rates. In most cases, especially in these tough economic times, the best bet is to issue bonds for projects that generate revenue to pay off those bonds, so the government does not have to take on any more debt.

But while bonds have helped pay for the construction of roads, bridges, city halls, libraries, hospitals, and other infrastructure and community benefit projects, they have not been used that extensively for clean energy development. As evidenced by the CE+BFI report, the enthusiasm for combining the two is there and growing, especially in light of partisan federal funding stalemates and reduced bank lending in response to the 2008 recession.

On the local level, federal gridlock tends to be a lesser consideration than the tangible benefits of clean energy development that are felt by a multitude of local players. New clean energy projects can stimulate the local private sector, leverage state clean energy funds, and diversify energy resources, lowering long-term energy costs in a given region. In addition, rising property values are appreciated by housing finance authorities. Economic development resulting from technology deployment is an asset to workforce development agencies and universities, which also benefit from the potential for growing innovative, technology-oriented jobs.

All types of clean energy projects are potential candidates for bond financing, but the local impact of offshore wind projects means they are a particularly smart bet for state governments. For one, wind resources are most active at times of peak electricity demand and are located right where they are needed – just off the coasts of heavily populated cities, and particularly off the Atlantic coast of the U.S., where Stanford researchers say offshore wind farms have the potential to generate enough power for one-third of the country’s energy demand. Furthermore, the regulatory landscape has been primed for the development of offshore wind: bipartisan state coalitions and task forces have set goals for offshore wind energy generation, identified appropriate sites, performed environmental impact studies, and made strides in the permitting process.

And, perhaps most importantly from an economics perspective, larger credit-worthy purchasers of offshore wind power such as state and federal governments can use their utility payments to pay off the debt service for those bonds. If revenue bonds are used to finance clean energy projects, then the government itself need not take on more debt.

Moreover, offshore wind projects will generate large amounts of clean energy and therefore magnify the associated benefits. The considerable size of offshore wind turbines means it is most economical to manufacture their components close to their final deployment site, so job creation and energy benefits from the offshore wind industry accrue to a specific region. For a state or local government seeking projects that will benefit the local economy, that's a smart investment for bond financing.

For more information on offshore wind and clean energy bond financing opportunities, please see

Clean Energy States Alliance’s Offshore Wind Accelerator Project (OWAP)

Offshore Wind WORKS

Clean Energy + Bond Finance Initiative (CE+BFI)

Report: “Aggregated Procurement” Could Reduce Costs of Offshore Wind Energy

Tue, 11 Sep 2012 00:00:00 -0400

One of the most common arguments against developing this country’s offshore wind resource is that it is too expensive. However, a new analysis by the Offshore Wind Accelerator Project shows that “aggregated procurement”—or purchases of large amounts of offshore wind energy by a buyers network—could substantially lower its costs.

The report, Collaborative Procurement of Offshore Wind Energy - A Buyers Network: Assessment of Merits and Approaches, examines how purchases by groups of creditworthy off-takers, in combination with low-cost financing and extension of key federal tax credits, could lower the levelized cost of energy for offshore wind to $95 per megawatt hour, on average. This would make offshore wind power highly competitive with other forms of electricity in the U.S.

So how does it work? By creating economies of scale, a buyers network—a consortium of creditworthy purchasers that could include utilities, state and federal agencies, large private commercial and/or institutional entities—would enter into long-term contracts with a developer for a project’s generation. By wielding more purchasing power than individual buyers, a network can spread fixed costs for things like transmission lines, lower construction costs, reduce risk, and reduce capital costs. The result, according to the report’s economic analysis, is cost-competitive offshore wind power.

Specifically, the report finds that “aggregated procurement” has the potential to reduce the expected levelized cost of energy—essentially, the constant price per unit of energy that will lead to an energy project investment to break even—by roughly $35 per megawatt hour. And if a buyers group uses low-cost debt in the form of taxable or tax-exempt bonds, the cost could be further reduced by as much as an additional $20 per megawatt hour.

Finally, if Congress reauthorizes the Investment Tax Credit—a key piece of federal policy that will expire later this year—it could result in an additional $50 per megawatt hour reduction in offshore wind energy’s cost.

In short, the use of aggregated procurement could be a game changer for the U.S. offshore wind industry. Despite its enormous job creation potential, opponents often turn to simplistic arguments about its “high” costs. However, a buyers network could bring offshore wind energy costs down dramatically and provide developers, investors, and businesses the confidence to build this new clean energy sector.

Learn more at www.offshorewindworks.com and at www.cleanenergystates.org/projects/accelerating-offshore-wind.

New National Partnership Explores State Bond Finance to Scale Up Clean Energy Investment

Wed, 01 Aug 2012 00:00:00 -0400

Clean Energy Group (CEG) and the Council of Development Finance Agencies (CDFA) announced today the creation of the Clean Energy + Bond Finance Initiative (CE+BFI), a new partnership to advance clean energy through the power of bond financing institutions. CE+BFI will work with institutional investors, public finance agencies, and public clean energy fund managers across the country, finding ways to increase clean energy investment by an additional $5 billion to $20 billion in the next five years.

To assist the CE+BFI in its mission, CDFA and CEG also launched a national Task Force on Clean Energy Bond Finance to support the partnership. The Task Force includes over 50 representatives from the top public and private clean energy and development finance organizations throughout the country, including states, cities, law firms, private banks, and other clean energy and bond finance industry professionals. A full list of confirmed participants is available online.

“States have been the leaders in clean energy project support for the last decade,” said Lewis Milford, founder and CEO of Clean Energy Group. “Now, state clean energy leaders and bond authorities have agreed to work together to solve the next decade’s clean energy problem: how to use existing state clean energy and bond tools to massively scale up clean energy capital.”

CE+BFI comes at a critical time. With the federal government gridlocked and the country looking for new sources of clean energy financing to scale up the industry, many experts are turning to states and localities for the public investment strategies of the future. In the U.S., over 50,000 municipal authorities access the capital markets to finance economic development. It is the scale available through access to these markets that is now needed for sustained clean energy development.

“Development finance agencies with bond issuance authority know how to fund large infrastructure projects and are ready to tackle clean energy finance,” said Toby Rittner, CEO of CDFA. “Bonds can be the tools that make clean energy finance attractive to underwriters, pension funds, and institutional investors. They can create the needed, secure pipeline to the trillion-dollar capital markets, and this can be done with existing tools and institutions.”

"In order to compete in the global race for clean energy technologies, we need to pursue innovative strategies that lower the cost of financing commercial-scale clean energy projects," said U.S Department of Energy Senior Advisor Richard Kauffman. "States are often the laboratories for solving problems, so trying to crack the code of clean energy finance at the state level can make a difference everywhere."

Development finance through the issuance of bonds has already begun to bring new capital into the clean energy space. Examples include the “Morris Model” for solar installations and bond-funded programs for clean energy economic development in New Jersey. More work must be done to use bond finance at the scale needed to expand the industry.

There is currently a great deal of misconception about the use of bond financing by state and local governments. The truth is that municipal bonds remain safe investments, a fact evident in the market’s lack of reaction to high-profile negative news. Further, CE+BFI will emphasize the issuance of revenue bonds, not general obligation bonds backed by a state or municipality.

CE+BFI, with advisory assistance from the Task Force, will immediately begin the work of identifying opportunities and barriers facing stakeholders looking to issue bonds for clean energy development. The initiative then looks to launch pilot partnerships to finance clean energy projects in six to eight states and localities.

“The CE+BFI partnership is what’s needed to begin answering the question of how clean energy can get to scale, and how it can access capital markets in the same way we now finance other projects,” said Lori Beary of the Iowa Finance Authority, a Task Force member. “Bringing everyone together to figure out clean energy finance will bring economic benefits to states all across America. I’m glad this effort is underway and am excited to participate.”

A background paper on why CE+BFI initiative was formed, how clean energy can be financed through bonds, and the initiative’s action plan is available online.

Click here to review a blog on this initiative in the Huffington Post.

New Massachusetts Report Identifies Renewable Thermal Opportunities

Mon, 11 Jun 2012 00:00:00 -0400

For many types of renewable technologies and fuels, producing thermal energy is much more efficient than producing electricity. Yet the vast majority of state Renewable Portfolio Standards address renewable thermal technologies minimally, if at all.

Why? Perhaps because it’s not easy to incorporate thermal fuel displacement into the typical RPS, which is designed to promote renewable electricity generation, and is funded through electric ratepayer charges. How do you calculate the value, in kilowatt-hours, of a solar thermal system that displaces fuel oil? And how do you justify subsidizing such a system with electric ratepayer funds? Furthermore, how can states effectively address energy systems that operate primarily at the building level?

Enter the Meister Consultants Group, author of a new report on renewable thermal energy opportunities and impacts. The report, commissioned by the Massachusetts Department of Energy Resources and the Massachusetts Clean Energy Center, addresses four renewable heating and cooling technologies: solar thermal, biomass thermal (wood combustion), advanced biodiesel, and high efficiency heat pumps (both ground source and air source varieties). The report examines how these technologies might be employed to displace fossil fuels in Massachusetts, the barriers to adopting these technologies, and how the state could promote the development and deployment of these technologies. Most importantly, the report discusses how renewable thermal technologies have been successfully supported by a few states and several EU countries — both within the traditional RPS structure, and outside of it.

An effective policy approach would address significant existing barriers to the development and deployment of renewable heating and cooling technologies, including these barriers identified by the Meister Group report:

High upfront capital costs
Poor public awareness of renewable heating and cooling benefits
Opaque regulatory standards
Poor inter-industry coordination

Such policies are unlikely to be forthcoming from the federal government in the near future. Thus far, federal renewable thermal policy has been limited to investment tax credits for solar water heating and geothermal heat pumps, and a small energy efficiency tax credit for biomass pellet stoves (but not boilers or furnaces).

The only renewable thermal fuel that has received significant federal support is biodiesel, which is supported through the Renewable Fuels Standard and the biodiesel tax credit – but biodiesel is largely used as a transportation fuel, and there are significant barriers to be overcome before it would see widespread use as a heating fuel. The battle being fought at the federal level now centers around the proposed extension of the production tax credit, which supports utility-scale renewable electricity production.

Since we cannot expect much in the way of new renewable thermal energy policies at the federal level at this time, we must look to the states. As shown in the graphic above depicting State Renewable Electricity and Fuel Standards (Source: Pew Center on Global Climate Change, 2011), most U.S. states support renewable electricity and renewable transportation fuels; but few support renewable thermal energy in any comprehensive way. This represents a significant missed opportunity.

As often happens, a number of states are ahead of the federal government on this issue, but there is room for improvement. Some states, such as California and Connecticut, offer technology-specific rebate programs for renewable thermal equipment. At least 13 states (Maryland, Vermont, New Hampshire, Pennsylvania, New York, Indiana, Wisconsin, North Carolina, Texas, Colorado, Hawaii, Nevada, and Arizona) allow solar hot water to compete under their RPS, and Wisconsin and Arizona allow biomass heating as well. However, in all states but Arizona, renewable heating technologies are only credited for displaced electricity, not for displaced fossil fuels.

It is critical that states more comprehensively address renewable thermal technologies. Thermal energy represents approximately one-third of all energy consumed in this country, and is a major source of pollution and greenhouse gas emissions.

Yet, as the Meister Group report points out, markets for low carbon, renewable energy technologies that could serve hot water, space heating and space cooling needs have been slow to develop in this country, in part because there has not been an integrated suite of policies supporting such markets. According to the report, if such policies were put in place now, by 2020 some 5,900 new jobs could be created, and greenhouse gas emissions could be reduced by more than two million tons in Massachusetts and the greater New England region alone.

In a future blog post, I’ll examine the energy- and emissions-saving potential of some specific renewable thermal technologies.

Clean-Energy Finance to Beat Beltway Blues

Mon, 14 May 2012 00:00:00 -0400

As the country looks for new sources of clean energy finance while Congress remains paralyzed, we might have missed the most obvious funders that have been right under our noses for years. They are the public infrastructure finance agencies all over America that know how to raise capital at the scale needed in this sector. In turn, Congress and the Administration should look to new policies to support this emerging, state-based infrastructure financing trend.

Hundreds of billions of dollars are needed scale up renewable energy, energy efficiency and clean energy manufacturing support. To fill this gap, some are looking to the states, regions and localities, a return to federalism as an investment strategy. Federal gridlock reminds us again that states have been the clean energy innovators. State funds have raised and leveraged over $12 billion in clean energy investment in the last decade. And clean energy policy at the state level has been done on a relatively bipartisan basis, unlike in Washington.

In this search for new forms of clean energy finance, a large group of state and local finance partners has been overlooked – the public authorities and other entities that do tax-exempt and taxable bond financing – a $3 trillion industry that has financed our nation’s infrastructure and public improvements, from bridges to hospitals to university expansion. In the U.S. over 50,000 state and local agencies help finance economic and community development.

To date, these agencies have not been that active in clean energy, with the exception of a few projects; but they now want to aggressively move into clean energy financing. As to the capital they can raise, municipal bond issuers in March 2012 alone brought 1,196 deals to market worth $34.50 billion. That makes $78.3 billion in 2,927 deals in only the first three months of 2012.

Let’s compare this scale to the possible declining federal support. Tax equity revenue generated for wind through the uncertain production tax credit was about $3.5 billion in 2011, while federal support for solar through various subsidies was about $2.5 billion.

These amounts are what municipal bond authorities finance every few days, every week of the year, all across the country.

Now, these bonding instruments are not exact replacements for tax equity investment, but they could usher in new forms of finance strategies. These tools have the potential to enlist major capital players such as institutional investors and pension funds that look for longer term, more predictable returns from infrastructure bonds—creating a new investment profile for clean energy with investors that finance at scale.

So far, there are some interesting emerging examples of bond financing in this space. In New Jersey, bond financing is being used to scale up solar installations though traditional public authority activity, now almost $200 million in investment. There are other models in energy efficiency finance and in other sectors that can be scaled up and replicated across the country.

Oddly enough, until now no one has ever approached these public infrastructure finance agencies to work on clean energy in any systematic way across clean energy markets. Some good news is that the membership organization of these authorities, the Council of Development Finance Agencies or CDFA, has entered into a partnership with Clean Energy Group and state clean energy funds to begin to explore use of bonding tools to finance clean energy.

So we have a unique financing situation for clean energy. To grow a robust clean energy economy, we have a new group of financial players who know how to raise hundreds of billions of dollars for infrastructure investment. They are motivated to make significant new investments in clean energy using existing bond instruments. They have begun to make small moves into the clean energy space, with a handful of investments. They are interested in becoming major players.

While the deadlock in Washington and the uncertainty over federal support is unwelcome, it need not mean a death knell for the clean energy industry. Instead, we have an opportunity to return to our federalist roots and look for our states, regions and local bonding agencies to begin to finance clean energy in the same way we scaled up the infrastructure that made America what it is today.

At the same time, there are many ways for the Administration to help, from clarifying various tax exempt rules to favor clean energy bonds to considering other support mechanisms that put the states in the financing lead. Congress too has a role to play to create a more bottom up, federalist financing strategy for clean energy.

At the very least, this new state-based policy conversation around infrastructure finance should begin now, to begin to shape a new clean energy investment strategy that does not rely so much on the whims of Washington.

This blog post origionally appeared on the National Journal's Energy Experts Blog, May 14, 2012. See http://energy.nationaljournal.com/2012/05/boom-and-bust-renewable-energy.php#2208880.

CleanTech Clusters: Scaling Local Economic Development for Global Investment

Tue, 01 May 2012 00:00:00 -0400

By Peter Adriaens , Ben Taube, and Shawn Lesser

Editor's note: An extended version of this guest blog was recently published in Environmental Finance (March 2012) and on CleanTechies.com.

Four years after the federal government aimed public stimulus funds at greening the economy, a new pattern of economic development, green job creation, green procurement and high growth ventures is emerging. The low carbon economy - driven in the last 10 years by private or strategic corporate investments in venture grade companies, or by development projects aided by Renewable Portfolio Standards (RPS) and carbon markets - has gone mainstream.

Evidence shows that local, regional, and national economic development groups, business organizations, corporate partners, investors and R&D centers are coalescing in clusters aimed at accelerating the path to market for CleanTech innovations. From Europe to Pacific Rim countries and North America, clusters are launching at a rate of several per month, often in conjunction with major CleanTech investment events.

Whether as physical incubators of CleanTech growth companies, or business services and partnerships for later stage innovators, these clusters represent and attract a portfolio of companies characteristic of their mandate (job growth, green procurement, economic development, high value exits) and local business culture. CleanTech clusters are fast becoming the driving force behind the acceleration of developments and innovations in energy, water, waste, fuels, green materials and green buildings.

In 2010, the Global CleanTech Cluster Association (GCCA) was formed to enable global connectivity, develop a platform of exchange for best practices, and align emerging startups with corporate partners. By being a part of the GCCA, CleanTech clusters and their member companies increase their exposure in their region while harnessing the knowledge, experience, and other benefits a worldwide association of clusters can provide.

Until the recent advent of the GCCA, international collaboration was limited by a scarcity of resources and a lack of strategic alliances between clusters, and cluster member companies and organizations. The GCCA is addressing this challenge by making exposure, communication, and collaboration for local clusters and their companies, faster, more efficient, affordable and most importantly, global.

Why do these clusters matter?

Clusters help CleanTech investors. Like mutual funds, the cluster company portfolio represents a spectrum of current and potentially future investable deals, ranging from seed and venture, to debt, strategic, project and public finance. Surging demand for energy efficiency and conversion of old economies into new value-creating engines have drawn investments in some of these cluster companies upwards of $200 million (e.g. Lyon, San Diego, Colorado). The seven clusters that track investment in member companies estimate that close to $0.8 billion was invested in 2010-2011 as the result of cluster efforts, indicating a potential aggregate exceeding $3 billion. The Global CleanTech Cluster Association, in partnership with CleanTech Acceleration Partners, a business design strategy consultancy, conducted an investment-grade screening stress test on the top 30 later-stage companies from 28 leading clusters. The analysis, conducted using the KeyStone Compact™ developed at the Zell-Lurie Institute for Entrepreneurial Studies at the University of Michigan, indicated that 45% of companies are venture/PE grade, with 5-10% project finance returns. Aggregated over 39 clusters (as of April 2012), with 20-800+ companies per cluster, the investment opportunity is potentially very attractive.
Clusters help portfolio companies. No two clusters are the same, but all have elements of market access acceleration, networking, business services, and links to the R&D pipeline, corporate partnerships, or investors. Aside from visibility and access to the investment community, it is the strength of global supply chain collaboration that sets the clusters apart. In 2011, the Finnish CleanTech cluster connected later stage and corporate members with Cleantech San Diego smart grid companies and investors, and is planning to repeat this with nascent clusters in China in 2012. And Swiss cleantech was instrumental in setting up corporate-driven CleanTech Nord-Rhein WestPhalen in Leverkusen, Germany.
Clusters spur economic development. Approximately one-third of all cluster organizations are funded by economic development organizations, with the remaining two-thirds being business, investor, or research-driven organizations. The objective here is green jobs, procurement, and strategic investment. An analysis by the Brookings Institution indicated that “the clean economy, which employs some 2.7 million workers, encompasses a significant number of jobs in establishments spread across a diverse group of industries." Many of these jobs can be found in urban CleanTech clusters.

One of the key issues that GCCA seeks to tease out is what makes clusters successful – what are the practices that make clusters grow or founder? What are the lessons for the design of public policy instruments that drive success of clusters? The role of the cluster is to bring together the research enterprise, corporate partners, investment capital, engage with public authorities to help develop legal frameworks (green procurement, subsidies, market incentives), and organize trade missions to "make local global "

Since composition of clusters reflects the local business environment , and mandates of clusters may be different between states and regions, best practices are difficult to quantify. The emergence of networking, incubation, business development and investment-dominated clusters, all of which are receiving investment and create – to variable degrees – jobs, is indicative of a wide range of potentially successful, but perhaps not widely replicable, models. Think of the largely unsuccessful replication of the Silicon Valley innovation enterprise elsewhere; the whole is greater than the sum of the parts.

The public policy lessons to date include the need to promote richness in diversity, allowing local strengths to get leveraged, and enable "coopetition" instead of competition among clusters. To take CleanTech to the scale that continues to be attractive to investors and governments alike, global collaboration and sharing among clusters needs to be encouraged. By setting up policies that enable public-private partnerships, mobilize financing through loans and private (including risk) capital, incentivize green procurement targets through market-based strategies, and are conducive to promoting foreign investment and technology sharing, CleanTech clusters will continue to develop and grow, allowing their member companies to capture value in the market.

Contact the authors:

Peter Adriaens, Professor of Entrepreneurship and Strategy, Ross School of Business, The University of Michigan, Ann Arbor, Michigan, USA, adriaens@umich.edu

Ben Taube, GCCA Chairman and President, BLT Sustainable Energy Inc., Atlanta, Georgia, USA, ben.taube@globalcleantech.org

Shawn Lesser, Co-Founder and Partner, Watershed Capital Group & Co-Founder of GCCA, Atlanta, Georgia, USA shawn@watershedcapital.com

MassINC Report Shines Light on Massachusetts's Strong Climate Change Mitigation Efforts

Mon, 23 Apr 2012 00:00:00 -0400

New Report Written in Partnership with Clean Energy States Alliance Recommends Key Actions to Ensure Future Emissions Reduction Targets Are Met

Boston, Mass. — MassINC today released the first independent assessment of Massachusetts state action on climate change since the precedent-setting Global Warming Solutions Act of 2008. The report, titled “Rising to the Challenge: Assessing the Massachusetts Response to Climate Change,” was researched and written in partnership with the Clean Energy States Alliance.

The report lauds the state’s aggressive climate change action plan and the great strides made in energy efficiency and renewable energy, but concludes that the state may fall short of reaching its 2020 goal unless immediate action is taken.

Among the report's recommendations:

Massachusetts should accelerate the launch and implementation of new initiatives from the Massachusetts Clean Energy and Climate Plan, which was released in December 2010.
The state should appoint a cabinet-level climate administrator to manage all aspects of the cross-agency program.
State leaders should create and implement an effective, transparent progress-tracking and monitoring system.

Massachusetts has put in place a wide array of sophisticated programs and policies to curb greenhouse gas emissions. The report includes detailed descriptions and analyses of these many initiatives. Among the initiatives the report concludes are progressing well—and can indeed serve as national models—are the state’s policy to support all cost-effective energy efficiency, the renewable portfolio standard, the Massachusetts Clean Energy Center’s clean energy industry development efforts, the Green Communities Program, and the Leading by Example program.

The report finds other initiatives, many related to transportation, have been lagging, including clean car consumer incentives, pay-as-you-drive insurance, and Green DOT, a comprehensive environmental responsibility and sustainability initiative within MassDOT.

In 2008, Governor Patrick signed into law the Global Warming Solutions Act, which legally committed the state to reducing emissions to 80 percent below 1990 levels by 2050. In 2010, the state issued the Clean Energy and Climate Plan for 2020, a series of initiatives that, taken together, would bring the state to an interim goal of reducing emissions 25 percent by 2020.

Download the Report (PDF)

Download the Executive Summary (PDF)

About Clean Energy States Alliance: Clean Energy States Alliance (CESA) is the only national nonprofit organization representing the collective voice of public clean energy funds. CESA provides information sharing, technical assistance services, and a collaborative network by coordinating multi-state efforts, leveraging funding for projects and research, and assisting clean energy programs with program development and evaluation. For more information, visit www.cleanenergystates.org.

About MassINC: MassINC is a nonprofit, independent think tank and publisher of CommonWealth magazine that uses non-partisan research, civic journalism and public forums to stimulate debate and shape public policy. Its mission is to promote a public agenda for the middle class and to help all citizens achieve the American dream. Learn more at www.massinc.org.

Clean, Green and Local: Why States Are Taking the Lead in Cleantech

Thu, 12 Apr 2012 00:00:00 -0400

April SSTI Webinar: Clean, Green and Local: Why States Are Taking the Lead in Cleantech -

Though many states have implemented programs to boost the use of clean energy technologies, only a handful have fully leveraged the potential of energy policy to support their state's innovation system. The Information Technology and Innovation Foundation's (ITIF) Matthew Stepp, Mark Muro of the Metropolitan Policy Program at Brookings and Lewis Milford of the Clean Energy Group will explore ways that the technology-based economic development (TBED) community can better leverage cleantech policy and programs to spur greater innovation, economic development and industry expansion. We will also take a look at the role that states and regions play in the clean energy economy and how some have used clean energy funds to support research, tech commercialization and the creation of new companies.

Featuring:

Lewis Milford, Founder and President of Clean Energy Group
Mark Muro, Senior Fellow and Policy Director, Metropolitan Policy Program the Brookings Institution
Matthew Stepp, Clean Energy Policy Analyst, Information Technology and Innovation Foundation

Date: Thursday, April 19
Time: 3:00 PM - 4:00 PM EST
Cost: $49 member, $69 non-members
Registration Deadline: Thursday, April 19 12:00 PM EST
Login Instructions: Emailed to participants on Monday, April 16
Last date to request a refund or cancel registration: Thursday, April 12

Link to REGISTER: https://ssti.memberclicks.net/index.php?option=com_mc&view=mc&mcid=form_116916

ABOUT SSTI

SSTI is the most comprehensive resource available for those involved in technology-based economic development.

As the most comprehensive resource available for those involved in technology-based economic development, SSTI offers the services that are needed to help build tech-based economies.

Since its inception in 1996, SSTI has developed a nationwide network of practitioners and policymakers dedicated to improving the economy through science and technology. This network has resulted in unique access to information. SSTI uses this access to assist states and communities as they build tech-based economies, conduct research on best practices and trends in tech-based economic development, and encourage cooperation among and between state and federal programs.

Long Island Solar Farm – How Public/Private/Federal Partnerships Can Make Big Things Happen

Mon, 02 Apr 2012 00:00:00 -0400

In early 2012, the Long Island Solar Farm, located in Upton, NY on Long Island, was given the Renewable Energy World’s “Excellence in Renewable Energy - Reader’s Choice Award.” The project, a 164,312 panel solar PV farm, is a winning example of how state policy makers, public utilities, private investors, and the federal government can partner to create an innovative clean energy project and pave the way for a cleaner energy future.

This 32 MW project is the result of years of hard work and cooperation between BP Solar and MetLife (private co-investors, co-owners), the US DOE Brookhaven National Lab (federal partner and host site for the PV facility) and the Long Island Power Authority (public municipal utility, power purchaser, and public funder for clean energy markets.) Working together, this team effort has developed the largest photovoltaic array in the eastern U.S., and it is among the largest in the nation constructed on federal lands. The project went online in November 2011.

Long Island Power Authority (LIPA), a public utility with strong programs for clean energy development and a member of the Clean Energy States Alliance, has entered into a long-term power purchase agreement (PPA) with the Long Island Solar Farm (LISF) to buy the nearly 50 gigawatt hours of clean energy produced each year, along with the Renewable Energy Credits or RECs for the project. The cost to LIPA is estimated to be a total of $293 million (including interconnection costs) over the 20 year agreement or about $0.60 per month for the typical LIPA residential customer. This project will produce enough energy to power up to 4,500 Long Island homes and makes Long Island a national leader in clean, renewable energy.

According to LIPA’s chief operating officer, Michael D. Hervey, the solar farm will strengthen LIPA’s renewable energy portfolio as well as reduce its reliance on fossil fuels and assist New York State in meeting its 30% by 2015 RPS goal. The project is also expected to strengthen the local economy and create new, high-quality clean energy jobs.

Located on the Brookhaven National Lab property, the project site is an example of how use of DOE sites can attract both private and public investment, help create jobs, and encourage collaboration between federal and state agencies. As part of the project, LIPA, Brookhaven Lab, and BP Solar established a Natural Resources Benefits package that includes open space preservation, habitat preservation, research and restoration of lands around the solar power plant. This effort also established the Northeast Solar Energy Research Center and Lab where researchers will use data collected from the project to learn more about solar interconnection to the grid, and about the challenges of deploying a large-scale PV installation in the Northeast.

More information about the project benefits can be found in this DOE brochure, downloadable at http://www.bnl.gov/GARS/docs/LISF-brochure.pdf

As discussed in the blog post of January 12, 2012 by Lew Milford, Clean Energy Group, and Mark Muro, Brookings Institution, Funding Growth: State Clean Energy Funds Can Help Invent the Future, this type of funding collaboration between state, federal and private investors can help sustain the unprecedented growth that renewable energy technologies have experienced in the last decade. We hope to see more of these projects in the future.

New CESA Report - "Designing the Right RPS"

Thu, 22 Mar 2012 00:00:00 -0400

The renewable portfolio standard (RPS) has become the most important policy mechanism for advancing renewable energy in the United States. A new report from the Clean Energy States Alliance (CESA) summarizes key lessons learned to-date about RPS program design, including best practices to emulate and pitfalls to avoid.

The report, titled "Designing the Right RPS: A Guide to Selecting Goals and Program Options for a Renewable Portfolio Standard," benefits from CESA's decade of experience working with clean energy innovators in states that have not waited for federal policymakers to set the clean energy agenda. Currently, 29 states plus the District of Columbia and Puerto Rico have a mandatory RPS, and eight other states have a nonbinding goal. These programs have created an effective learning laboratory, providing insight into which program design features are important to consider when setting up or modifying an efficient, cost-effective RPS.

Among the report's insights:

Be clear and specific about goals. An RPS can help meet a variety of different environmental, economic, and political goals. For an RPS to be successful, states should be clear up front about what specifically they wish to accomplish.

Be aware of how an RPS relates to and interacts with the RPSs of nearby states. The electricity grid in most states is part of a regional system and often part of a single regional wholesale market. Markets will be more robust and procurement costs will be lower if nearby states have similar resource eligibility definitions, compliance mechanisms, compliance periods, and other RPS features.

Don't neglect companion policies to help renewable energy projects secure financing and/or long-term contracts. RPSs are often not enough to guarantee that a project developer can secure financing for a cost-effective renewable energy project. There are a variety of ways for policymakers to address financing and long-term contracts issues within the context of an RPS or with related policies.

Download the report here to read more.

Although CESA's new report was written primarily to help state policymakers who are seeking to design a new RPS or modify an existing one, it can also be used by anyone who wants to understand the strengths and weaknesses of different RPSs, or who wants to know how and why the RPSs in various states differ.

An RPS works by requiring electricity suppliers to get a certain percentage of their electricity from renewable energy or other clean energy sources. To stimulate the gradual but continued development of new renewable energy facilities, the percentage generally increases over time.

Because an RPS does not set a specific price that electricity suppliers must pay for renewable energy generation, there is competition among generators to sell to electricity suppliers and that competition theoretically ensures that renewable energy is secured at the least cost. A variety of alternative terms are used somewhat interchangeably to describe a “renewable portfolio standard.” These include renewable electricity standard, renewable energy standard, clean energy standard, and clean energy portfolio standard.

For more information about this report and other CESA publications, please contact Marissa Newhall at marissa@cleanegroup.org.

More information about Clean Energy States Alliance and the State-Federal RPS Collaborative project can be found at www.cleanenergystates.org.

Manhattan Institute Flunks Energy Policy 101

Wed, 07 Mar 2012 00:00:00 -0500

Last week, the Manhattan Institute issued a report that pretends to be a serious analysis of the impact of renewable energy on electricity prices. The report includes tables and numbers that purport to show that renewable energy produced dramatic increases in customers' electricity bills over the past decade. Yet it only takes a few minutes of close reading to realize that the data prove no such thing -- and that the author disregarded pertinent studies showing that the price impact of renewable energy has been minimal.

In "The High Cost of Renewable Electricity Mandates," Robert Bryce of the Manhattan Institute argues that states should suspend their renewable portfolio standards (RPSs), which require an increasing share of electricity to come from new renewable energy projects. As his primary argument for halting renewable energy development, Bryce proclaims that "our analysis of available data has revealed a pattern of starkly higher rates in most states with RPS mandates."

Yet Bryce ignores the most credible evidence about the price impacts of RPSs: the reports of states that manage RPS laws. Three of the states he looks at have actually analyzed whether RPS laws raised rates.

Take Minnesota, for example. In 2011, the state required all its electric utilities to carefully analyze and report on the rate impacts of the state's RPS. Eight of the 14 utilities concluded that the RPS had had little or no impact on rates. All but one of the other six utilities indicated that the rate impacts were modest.

In January of this year, a review of Maine's RPS, commissioned by the state's Public Utilities Commission and mandated by the legislature, found that the impact on retail customers' monthly electric bills had been only 0.6 percent in 2010, and will likely still only be 1.9 percent in 2017.

More strikingly, New York found that its RPS actually led to a reduction in retail electricity rates, because renewable energy projects ended up suppressing electricity prices at times when electricity use was at its peak.

In comparison to these solid studies, Bryce's analysis is simplistic and misleading. His lead findings are that the average price of electricity is higher in the 29 RPS states and that eight of the 10 states with the highest prices have an RPS. While this may sound convincing, Bryce omits that back in 1990, before any of those states had an RPS, the list of the most expensive states was virtually identical, with the only difference being that an RPS state (Illinois) has now dropped off the list and been replaced by one without an RPS (Vermont). The report tells a similarly incomplete story with a list of states with the cheapest electricity, again ignoring the extensive continuity since well before most RPSs were implemented.

The report also compares seven coal-dependent states with an RPS to seven coal-dependent states without an RPS. It finds that, since 2001, prices have gone up faster in the states with an RPS. However the two groups are not as good a matched set as Bryce asserts. Among the many differences, the seven states with an RPS started off with rates that were 11 percent higher. In addition, the two states with the highest increases -- Delaware and Maryland -- are in a very different region, with different cost factors than the states on the other list. The RPS in Ohio is so recent and affects such a small share of the state's electricity (1.5 percent in 2011) that it cannot possibly have been a major factor in overall electricity prices. And South Dakota, a non-RPS state with very low price increases, gets more than half of its electricity from hydro (a 10-times-larger share than any of the seven RPS states).

Most of the rest of the report is a kitchen-sink attack on renewable power, filled with disconnected anecdotes from press reports, random quotes, and one-sided, biased attacks. In the midst of all this, it makes one reasonable recommendation: that there should be more cost-benefit studies of RPSs.

Most states with RPSs would agree with that, and take program evaluation seriously. For a variety of technical reasons, it is difficult and costly to undertake a full, accurate cost-benefit study. But more states will be rolling them out in the coming years.

States should -- and will -- continue to study the impacts of their renewable energy policies, and make policy adjustments when warranted. In the meantime, the Manhattan Institute's report, which ignores the facts and is more propaganda than sound public policy analysis, does not justify suspending policies that are improving the environment and diversifying our nation's electricity supply.