Energy Efficiency & Renewable Energy Take Center Stage in the Obama Era

EM Magazine, pp.17

January 2010

By Shelley Fidler, Shannon Angielski, Asha Venkataraman, and Henry Stern

The 2008 election of President Barack Obama and the expansion of Democratic majorities in both houses of Congress have ushered in an era of legislative and regulatory activity in the United States focused on renewable energy and energy efficiency. The American Recovery and Reinvestment Act (ARRA) and other federal actions in 2009 dramatically altered the national landscape for energy policy.

Some of the biggest changes have yet to come, as Congress inches closer to passing comprehensive climate and energy legislation. Those companies that effectively navigate the dynamic, complex legal and regulatory landscape can capitalize on the wave of government support for what President Obama referred to during his campaign as the “New Energy Economy.” This article offers a bird’s eye view of the policy changes in 2009 that could redefine the national landscape for renewable energy and energy efficiency in the United States.

Legislative and Regulatory Developments in 2009

Stimulating the Economy through Investment in Renewables and Efficiency

In response to the global economic crisis, the 111th U.S. Congress enacted, and President Obama signed, ARRA on February 17, 2009. Among the expenditures designed to stimulate the economy, it provides the largest ever public investment in renewable energy and energy efficiency— totaling more than $43 billion. The U.S. Department of Energy (DOE) has major responsibility (the U.S. Department of Defense, the General Services Administration, and the U.S. Environmental Protection Agency [EPA] also have some authority) for implementing the energy portions of ARRA with $36.7 billion in funding for programs, including state weatherization assistance programs; loan guarantees for renewable energy, smart grid, and transmission projects; and grant funding for projects involving alternative fuel vehicles, transportation electrification, industrial efficiency, combined heat and power, and advanced battery manufacturing. Overall, DOE had awarded 59.1% of ARRA funds as of December 21, 2009, but only 5.1% have actually reached recipients, since DOE must typically negotiate terms of agreement prior to “spending” the money. Nevertheless, the Obama Administration continues to assert that it is on track to meet its goal of doubling renewable energy generation (to 55.6 GW nationwide) by 2012.

Major Climate and Energy Legislation Moving in Congress

Democratic leaders in Congress are also using the party’s strengthened majority to advance comprehensive climate change and energy legislation. In June 2009, the U.S. House of Representatives narrowly passed the most comprehensive piece of energy and environmental legislation in history— the American Clean Energy and Security Act of 2009 (Waxman–Markey). The bill would establish an economy-wide cap on greenhouse gas (GHG) emissions. By making it more expensive to emit carbon dioxide (CO2), the cap would increase the cost-effectiveness of investments in renewable energy and efficiency. If the Waxman–Markey bill becomes law, the U.S. Energy Information Administration estimates renewable electricity generation will increase more than 28% above its base case scenario by 2030, while electricity demand is projected to drop 29%.

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