Obama's stimulus plan: The energy debate

The goal is to double U.S. renewable energy in three years, but there's still much to be sorted out about clean-tech incentives from Washington.

Shortly after President-elect Barack Obama set a goal of doubling the country's renewable energy in three years, the jockeying over the energy portions of his administration's stimulus plan began.

At a speech at George Mason University on Thursday, Obama repeated his intention to promote the development of clean-technologies such as solar and wind energy, and to upgrade the electricity distribution system to enable smart-grid technologies. Obama said:

To finally spark the creation of a clean-energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75 percent of federal buildings and improve the energy efficiency of 2 million American homes, saving consumers and taxpayers billions (of dollars) on our energy bills.

In the process, we will put Americans to work in new jobs that pay well and can't be outsourced--jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain."

More details on how to fund energy-related programs trickled out after Obama's talk.

In response to a query from The Wall Street Journal, an Obama transition aide said doubling renewable-energy production in the United States is possible through a combination of loan guarantees and, ultimately, a national renewable portfolio standard (RPS).

There are a number of state-level RPS policies mandating that utilities get a certain percentage of their electricity from renewable technologies; the targets in California have set off a race to build up solar-power plants there. During the campaign, Obama had advocated a national RPS at 10 percent by 2012 and 25 percent renewable energy by 2025.

Renewable energy from wind, solar, and geothermal is about 24,000 megawatts, according to the aide, which represents about 1 percent of all power generation in the country.

"By providing significant loan guarantees and ultimately, later down the road, a national (renewable portfolio standard), we are confident we will get the wind industry back on track. In addition to the 20,000+ megawatts of wind, we are confident that with the same combination of support and renewable standards, the geothermal and solar industries can install 4,000MW of new power," the aide told the Journal.


After his talk, members of Obama's economic team met with members of Congress, who voiced their concerns with the plan.

"Energy is way underrepresented here in the package that has been discussed," said Sen. Kent Conrad, according to a report at Energy and Environment Daily (subscription required).

That sentiment was echoed by Sen. John Kerry: "I'm very confident that some adjustments are going to be made...We positively--absolutely in my judgment--need to spend more on energy, and I made that point and will continue to make that point."

The entire stimulus plan put forth is structured so that 40 percent of the money comes from direct tax cuts, 40 percent from direct investments in initiatives such as efficiency, and 20 percent directed at states, according to reports.

Overall, renewable-energy companies are optimistic on the potential for policy changes under Obama. In response to Thursday's speech, the American Council on Renewable Energy said it is issuing a call to action to its 600 members to issue plans on how to double renewable energy output in the next three years.

The auto sector is also angling to secure loan guarantees and incentives to establish electric-car manufacturing in the United States, according to a report earlier this week in the Detroit News.

Advocates of underground storage of carbon dioxide at coal-fired power plants are also hoping to restart investment in the Department of Energy-sponsored FutureGen project.

 

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