Energy and Government: Renewables

Amit RonenDirector, GW Solar Institute

Professor, Trachtenberg School of Public Policy, George Washington University

Renewables are still less than 10% of

America’s energy mix

But Renewables Are Growing Fast

Renewables capacity virtually doubled to 85.7 gigawatts(not including large hydro)

In the last three years:

Renewable Costs Have Plummeted

In the last three years:

Levelized cost for large-scale solar went from $0.31 to $0.14/kWh

Renewable Costs Have Plummeted

In the last three years:

Levelized cost for large-scale wind went from $0.09 to $0.08/kWh

Future Growth Potential is Significant

Future Growth Potential is Significant

Future Growth Potential is Significant

No major energy technology has achieved the necessary cost reductions and scale without sustained government support

But Sustained and Predictable Public Investment is Still Needed

No major energy technology has achieved the necessary cost reductions and scale without sustained government support

But Sustained and Predictable Public Investment is Still Needed

Empower Ratepayers

So What Can Government Be Doing?

First should it be doing anything?National SecurityNational Security

Declining, Predictable Costs

Protect the EnvironmentMitigate Climate Change

So What Should Government Be Doing?

R&D to Spur Innovation

DOE’s FY 2014 budget request for the Office of Energy Efficiency and Renewable Energy (EERE) is $2.8 billion, an increase of over 50% from the previous two years.

FY 2014 budget request includes $379 million for the Advanced Research Projects Agency–Energy (ARPA-E), an increase of about 35%.

So What Should Government Be Doing?

R&D to Spur Innovation

So What Should Government Be Doing?

R&D to Spur Innovation

• Create centers of excellence in energy innovation

• Increase annual investments in clean energy RD&D to $16 billion per year

• Call for complementary energy policies to drive market adoption of new technologies

So What Should Government Be Doing?

Provide Incentives to Nascent Technologies

• Clean energy tax incentives

• Loan guarantees

So What Should Government Be Doing?

Provide Incentives to Nascent Technologies

• Clean energy tax incentives

• Loan guarantees

• Standards

So What Should Government Be Doing?

Provide Incentives to Nascent Technologies

• Clean energy tax incentives

• Loan guarantees

• Standards

Need to reform energy tax incentive programs to make them:• More predictable• More technology neutral• More level playing field

So What Should Government Be Doing?

Provide Competitive MarketplaceEnergy markets will only be competitive if

prices reflect all costs

National Academies of Science estimated damages from non-climate air pollution from coal-fired power plants to be 3.2 cents per kWh

Need to reform energy tax incentive programs to make them:

• More predictable• More technology neutral• More level playing field

So What Should Government Be Doing?

Provide Competitive MarketplaceEnergy markets will only be competitive if

prices reflect all costs

Thank you

Amit RonenDirector, GW Solar Institute

Professor, Trachtenberg School of Public Policy, George Washington University