Transcript Document 7204690

Energy Policy:
The world's most important environmental issue
Green Mountain Global Forum
Waitsfield, VT
Michael Dworkin, Professor of Law & Director,
Institute for Energy and the Environment
Vermont Law School
June 19, 2007
-
The Energy “Trilemma”
• Cost of Energy -- $ $ $
• Security and Reliability
•
Foreign & Domestic
• Environmental Stress
•
Land Use, Air & Water Pollution, and Climate Change
Why Care About World Energy Trends ?
Because the World Prices – and World Emissions
Affect You
• World energy demand sets world natural gas price.
• World natural gas price sets wholesale new England electricity price.
• New England wholesale electricity price sets one-sixth of Vermont power
costs now
• Climate Change is global, and Green House Gases have global effects
Bering Sea 2004
(NYTimes 07/02/03)
Climate Change…..an environmental tragedy
Carbon dioxide that results from burning coal, oil and gas (using energy)
remains in the atmosphere for over a hundred years trapping heat.
The earth’s temperature correlates with the amount of carbon dioxide in
the atmosphere. As it accumulates, the earth’s temperature rises.
Surface and sea temperatures have risen around the world
and they will rise further over the next century
Then…1884
Now…..2006
The end of nature -- Six months of mud-season
Bill McKibben
A sharp drop in the human-carrying capacity of the earth
Kurt Yeager
We are confronted with insurmountable opportunities
Amory Lovins
What we need is not a silver bullet, but
“A Green New Deal” -- a broad spectrum of
measures.
Sources of US air pollution….
More Than 1/3
About 1/3
Less Than 1/3
3,000
Power Plants
200 million Cars &
Trucks
2 Billion
Other Sources
15% from dirtiest 20
50% from dirtiest 100
90% from dirtiest 300
Carbon Emissions: The Willie Sutton Principle
CO2
% of Electric
20 Plants
15%
50 Plants
31%
100 Plants
51%
3,000 Plants
100%
% of US
6%
13%
20%
40%
% of World
2%
3%
5%
10%
SO2
% of Electric
20 Plants
23%
50 Plants
42%
100 Plants
61%
3,000 Plants
100%
% of US
15%
28%
41%
67%
% of World
Are The Current Challenges Episodic or Fundamental ?
Average household electricity use of world population (6.1 billion people) in the late 1990s--0.6 billion people
10,000 kWh (US level ca. 12,000)
2.0 billion people
5,000 kWh (typical Latin/Eastern Eur)
2.0 billion people
1,000 kWh (typical Asia, Africa)
1.5 billion people
0 kWh (Asia, Africa)
If 5.5 billion people use 5,000 kWh/ year in 2025:
equals about 200% of 1990s’ electricity demand
If 9 billion people use 5,000 kWh/year in 2030:
equals almost 300% of 1990s’ electricity demand
If 9 billion people use 10,000 kWh/year in 2030:
equals over 500% of 1990s’ electrical demand.
Pareto assumption – new need met without reducing current usage levels
of 600 mm people
What does the rising demand for energy mean?
Power costs will be high for a long time
We will be competing with the developing world
for gas and oil
Shifting to efficiency and renewables will save money over the next
decade.
Cheap coal will hit financial and environmental limits very soon.
So, how is America dealing with the likelihood of more
expensive less available energy?
Do we have a national energy policy?
We do .. And it is this 
Stunning coal resurgence: 154 new plants planned
-- 93 GW, $137 billion
Where is the problem?
 Think vehicles
 Think fossil-fired electric power
 Think a dozen other ideas across the board
 Most Importantly:
THINK !
Potential Sectors For State Climate Policy
• Electric System Efficiency –
•
Utility Generation, Transmission, Distribution
• Natural Gas Use
• End Use Efficiency
•
Buildings, Farms
•
Appliances
•
Industrial Processes
• Non-Utility Electric Generation –
•
especially renewables
• Transportation
Low Carbon Futures – Key Next Steps
It is feasible: We have done it , we can do it
Energy Efficiency, Most important
Electric Efficiency: Lighting, motors, insulation, pumps
Transportation efficiency: New Cars, feebates, guzzler fees
High Mileage Tires
Bus routes ?
New Fuels
Electricity from Renewable energy: Wind, solar
Transportation fuels: Bio Fuels, Cellulosic Ethanol
Attention & Awareness, Commitment!
US energy use already cut to Lovins’ “soft path”
250
primary energy
consumption
(quadrillion BTU/year)
200
"hard path"
projected by
industry and
government
actual total energy
consumption
actual total
consumpti
on
reported
150
Government
(DOE- EIA)
"soft path"
proposed
by Lovins
100
gas
coal
coal
oil and
gas
50
nuclear
renewables
oil and gas
soft technologies
(which do not include
big hydro or nuclear)
nuclear
b
0
1975
renewables
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
19
40
19
42
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48
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50
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20
00
kWh per customer per year
Residential Electricity Use
kWh per customer per year, 1940-2001
12,000
10,000
8,000
6,000
4,000
2,000
USA
New England
Vermont
0
But, Isn’t Vermont Already Clean?
 Physically, operationally, Vermont is part of New England’s unified
electric system so sometimes the ISO-NE ramps up “dirty” power plants
to meet our electricity demand.
 85% of time fossil fuel runs the marginal electric unit in New England
(fueling the power plant that is turned on if our demand goes up, and
turned off if our demand goes down)
 Every kWh Vermont serves with efficiency or with renewables reduces
New England’s – and world’s -- global warming pollution/ carbon.
… and we may not be low-carbon for long
Things for Vermont to do :
•
•
•
•
•
•
Reduce emissions from Transportation
Reduce emissions from Stationary Sources
Seize Business Opportunities
Take advantage of Fiscal Opportunities
Enact Policies
Provide Technical Assistance
Reduce Emissions from Mobile Sources
Ways to reduce emissions from transportation:
•
•
•
•
Travel fewer miles
Use greener fuels
Create and use efficient vehicles
Create good public transportation systems
Things for Vermont to do :
•
•
•
•
•
•
Reduce emissions from Transportation
Reduce emissions from Stationary Sources
Seize Business Opportunities
Leverage Fiscal Opportunities
Enact Policies
Technical Assistance
Electric Non-Utility
Community Energy Production & Ownership or Control
• Group Net Metering
• Clean Community Generation
• Distributed Generation/CHP
• Streamlined Permitting for Renewables
Electric Utility and Use
Improve System
• Sustain Renewable Energy Support
•
Ratepayers
•
Taxpayers
•
Utility Performance Based Regulation with GHG in
performance
End-Use Efficiency
• Make Efficiency Vermont Enduring
• Franchise with same term and same freedom to advocate that
investor-owned utilities now have
• Expand scope of efficiency utility
Reduce Emissions from Stationary Sources
Electric
•
Utility
•
Non-Utility
Non-Electric
•
Regulated
•
Unregulated
State-Funded Buildings & Programs
•
State-Owned Buildings
•
Non-State-Owned Buildings
Regulated Non-Electric
VT Gas Systems
• Continue and expand VGS efficiency programs
• Building Energy Use
•
HVAC
•
Residential insulation and furnaces
Unregulated Non-Electric
End-Use Efficiency
• Expand Efficiency Vermont
• Building Codes
•
Updating
•
Enforcement
• Appliance & Equipment Efficiency Standards
Renewable Content in Heating Fuels
State-Funded Buildings & Programs
State-Owned Buildings
• Goal
• Stiffer standard than generally applies
• Clean energy and efficiency as a design fundamental
State Supported Non-State Buildings
• High Performance Schools - required for state $$
• Scoring bonus on state-administered grants for green buildings
and clean energy
Things for Vermont to do :
•
•
•
•
•
•
Reduce emissions from Transportation
Reduce emissions from Stationary Sources
Seize Business Opportunities
Leverage Fiscal Opportunities
Enact Policies
Provide Technical Assistance
Seize Business Opportunities
• Jump start for forest products industry
•
Note sustainability issues (regrowth and mono-culture)
• Use reserved ag land for woody (cellulosic) fiber
•
•
Biofuels
Biomass Energy
• Intellectual capital brings $ to Vermont
•
•
Professional – Regulatory Assistance Project
Academic – VLS & UVM… and GMC and … …
• Promote Implement Skills and Tools for Export
•
•
•
•
•
GRO
NRG
Stone Environmental Services
Solar Works
VEIC
Leverage Fiscal Opportunities
• Exclude value of clean energy systems in grand-list value.
• Make green systems and/or insulation and high efficiency appliances
tax exempt.
• Offer Production Tax Credit (better than Investment Tax Credit)
• Provide Low-cost financing of high efficiency and/or renewable
projects.
• Use long-term financing of efficiency potentials through Efficiency
Vermont VT state employees’ pension fund investments
Implement Policies to Foster Green Energy
Land Use Planning & Regulation:
•
Require efficiency and GHG consideration in Act 250 permit
decisions
• Emission Fees / “Carbon Tax”
• Pollution Caps (first “cap”, then “trade”)
• Public Allocation of RGGI Credit Revenues
• Green House Gas Assessment Obligations for Significant
Governmental Actions
Efficiency Vermont
•The nation’s first energy efficiency utility
•Established by regulatory order and supporting legislation
•Implements energy efficiency as a least-cost resource to meet Vermont’s electric power needs
•Kennedy School of Government 2003 Award of $100,000 for one of 5 Most Innovative and
Effective Programs in America
Key Design Features
•Funded by a “System Benefits Charge” ( a 2- 4% surcharge on customer
bill)
•A single, statewide administrator acts as: “Efficiency Vermont”
•Selected through competitive performance bidding
•Independent, non-utility contractor, under a multi-year, performancebased contract with the Vermont Public Service Board, with significant $
holdback
2004 Savings Distribution
RESIDENTIAL RETROFIT
2%
RESIDENTIAL NEW CONST
2%
BUSINESS RETROFIT
11%
LOW-INCOME SINGLE FAMILY
5%
RETAIL PRODUCTS
24%
BUSINESS EQUIP REPLACE
35%
LOW-INCOME MULTIFAMILTY
3%
BUSINESS NEW CONST
18%
Wholesale Power Costs vs. Efficiency Vermont Costs
2002 - 2005
12.0
Efficiency
Savings:
Low .9
cent/kWh
(Jan 2002),
High >than
9 cents/kWh
(Oct 2005).
8.0
6.0
4.0
2005 efficiency
data is Q3 est.
2.0
0.0
Ja
n0
M 2
ar
-0
M 2
ay
-0
2
Ju
l-0
Se 2
p0
No 2
v0
Ja 2
n0
M 3
ar
-0
M 3
ay
-0
3
Ju
l-0
Se 3
p0
No 3
v0
Ja 3
n0
M 4
ar
-0
M 4
ay
-0
4
Ju
l-0
Se 4
p0
No 4
v0
Ja 4
n0
M 5
ar
-0
M 5
ay
-0
5
Ju
l-0
Se 5
p0
No 5
v0
Ja 5
n06
Cents per Killowatthour
10.0
Cost of Wholesale Electric Energy including ancillary and bulk transmission costs but not distribution
ISO NE Monthly Average Wholesale Market Price
Efficiency Vermont, Contract Price per levelized kWh, stacked below customer-cost
Market Potentials– and Results
 Nation-Leading Market Shares
• Highest 2002 Efficient Residential Air Conditioning Share
(61%)
• Highest 2003 Efficient Washer Share (62% in 3rd Quarter)
• 2002 Share for Energy Star Homes: 25%
 High Participation of Lighting and Appliance Dealers
 High Participation in Key Markets
• Affordable Housing
• Commercial and Industrial New Construction
Recognized for Innovation
$100.000 Award from Harvard’s Kennedy School of Government for Innovation
in American Government
Things for Vermont to do :
• Reduce emissions from
Transportation
• Reduce emissions from
Stationary Sources
• Seize Business Opportunities
• Leverage Fiscal Opportunities
• Enact Policies
• Provide Technical Assistance
Provide Technical Assistance
Provide Ombudsman for state and federal grants to :
Help Cow Power farmers deal with:
• Bureaucracies: USDA, DOE, VT Agriculture, VT DPS
• Guide them through regulatory mazes
Help people who install on-site clean generation through
Net Metering, etc.
Answer questions
Leadership  Vermont leads effectively and
others join
 Rich Cowart and public allocation of RGGI credits: NY, MA and other
RGGI states will follow
 Efficiency Vermont’s awarded $100, 00 Kennedy School
for Innovative and Effective Governmental programs
 Rich Sedano’s work with Arkansas PSC efficiency.
 In March, May, and September, the IEE at VLS will be working with
Chinese law schools and Chinese governmental utilities:
 What shall we tell the energy leaders of one-quarter of humanity ?
Institute for Energy & the Environment
www.vermontlaw.edu/energy/research
Michael Dworkin,
Professor of Law and Director,
Institute for Energy and the Environment
Vermont Law School
802.831.1319 South Royalton VT
802.249.7840 Cellular
[email protected]
Vermont’s Energy Efficiency And Affordability Act:
Vetoed
 Provisions of H-520
 Sets renewable energy for state at 25 percent by 2025
 Energy-efficiency and load management measures beyond
electric sector (i.e., for inefficient buildings)
 Allows self-generation and net metering
 Facilitates wind energy production with a tax incentive.
 Commercial building energy standards
 Renewable energy pricing
 Gives credit for businesses that use solar power
Vermont’s Energy Efficiency And Affordability Act:
Vetoed




Encourages energy projects on farms
Requires utilities to offer renewable energy to customers
Several provisions that encourage conservation and efficiency
Expands weatherization program to save energy and money for
customers
 Sets goals for bio-diesel use
 Encourages small hydro power projects\
 Make Efficiency Vermont as enduring as an electric utility