The American Council On Renewable Energy (ACORE) held a webinar on February 26, 2014 to discuss the “State of the Union” regarding renewable energy policy.
The conference was co-moderated by Todd Foley, SVP Policy & Government Relations, ACORE, and Sarah A.W. Fitts, Partner, Debevoise & Plimpton LLP.
Bob Inglis, Executive Director, Energy & Enterprise Initiative; Former Congressman, R-SC
Byron Dorgan, Senior Policy Advisor, Arent Fox; Former Senator, D-ND
George T. Frampton, Jr, New Energy Strategy and Law, TowPath Partners; Former Chairman, White House Council on Environmental Quality, and Assistant Secretary of the Interior
Ryan Fitzpatrick, Senior Policy Advisor for Clean Energy, Third Way
The U.S. renewable energy industry is one of the fastest growing sectors of the U.S. economy presenting important economic and environmental security opportunities. In the State of the Union Speech, President Obama renewed his commitment to carbon reduction in order to halt climate change and increased efficiency in energy production and consumption. Technology innovation and cost reduction, federal tax policies, state demand policies, and fuel prices have contributed to an exciting growth of U.S. renewable energy deployment. However, with the changing regulatory framework, long-term commitment and predictability is lacking, causing business to hold back on investments.
Furthermore, current renewable energy legislation has unintended consequences. The Production Tax Credit is a federal incentive that provides financial support for the development of renewable energy facilities, but has the reverse effect —namely, Exxon is running wind turbines at suboptimal rates. The utility industry is also threatened by the prospect of change. Furthermore, GE has struggled to balance renewable energy demand with maintaining a steady supply to old customers.
To keep business interested in renewables, Bob Inglis stressed a change from the “lets walk and eat bugs” terminology to one of creating wealth by serving customers. The deregulated energy sector in Texas is an example where companies are reinventing themselves “to make money, but make it differently”. Concomitantly, a new way of thinking regarding energy reforms to benefit the oil and gas industry would be welcome.
Finding the right regulatory and policy framework to foster growth can be overwhelming for Congress. Ryan Fitzpatrick emphasized the need for a two way approach. In the short-term, there is a tax structure already in place and it does cover the renewable energy industries that are operational. The questions that need addressing are:
- How to better follow current mandates in renewable energy standards?
- How to work with regulatory nuances?
- How to make the best policy packages?
In the long-term, more comprehensive policies (including carbon tax and clean energy standards) are the crucial steps in continuing the energy revolution.