Part 2 in a two-part conversation concerning the Green New Deal. (Read Part 1 here. )
Political feasibility aside, there are many questions about what a Green New Deal might mean for energy that is clean. Broad regulatory change and stimulus could drive the increase of cleantech, however, policies could result in enormous wins — or even losses — for business players.
Below, analysts indicate some policies which could emerge within a Green New Deal and also explore the consequences of these policies for industries monitored by Wood Mackenzie Power & Renewables.
A note about the “Green New Deal policies” recorded below: No draft legislation of this Green New Deal that contains specific policies exists. The prospective policies below are shown as hypotheticals from Wood Mackenzie, affected by substances published by GND urges (like the Sunrise Movement). The listing does not include all Green New Deal policies.
Green New Deal policy: Simplify the process for siting and permitting of renewable energy jobs
Austin Perea, Senior Solar Analyst at Wood Mackenzie: The Solar Energy Industries Association is doing a great deal of effort to streamline the permitting process for solar energy because considerable differences exist across countries, counties and municipalities. This increases the price of the total product, using a second-order impact on the price of residential customer acquisition due to the time it happens from point of sale to installation (which may benefit from 30-60 days( depending on the market), as well as the increase in soft costs.
Daniel Finn-Foley, Storage: For storage, the more Aliso Canyon procurements proved that electricity storage can be got and made usable in a dramatically expedited timeframe, especially when compared to conventional fossil fuel production. However, barriers remain in several markets which slow down storage system deployment.
Studies, interconnection requests and processes, both at the distribution and transmission amount, are often cited among the main drivers of time and price today, confronting storage developers. A reform of this interconnection process provide a surer footing to storage and could grease the wheels considerably.
Of note is that this is already occurring on a few levels — FERC Order 845 eases interconnection restraints for storage co-sited with existing renewables — but more would have to be done to create the process developer-friendly.
Austin Perea, Solar: Former Sungevity CEO Andrew Birch really wrote an article for GTM concerning this issue in solar a year ago. He highlighted an extremely instructive contrast between U.S. residential solar costs and other global solar leaders and delineated the oft-ignored vicious cycle which contributes to the high cost of customer acquisition from the States.
Using Australia’therefore permitting regime as an example, he highlights a significant positive correlation between price of compliance with permitting plus electric code and customer acquisition cost (CAC). Studying Australia’s market, an individual can’t help but notice that using a less-stringent permitting and code compliance criteria, CAC in Australia is one-sixth the CAC from the U.S., using entire system pricing less than half the price of PV from the U.S. Prices in Australia stood at $1.34 per watt from the first half 2018, whereas U.S. pricing stood around $2.85 per watt from the third quarter of 2018.
The takeaway is that expensive products are harder to market to bulk markets — particularly, as is true with solar, even when most of the low-hanging fruit (i.e., early-adopter demographics) have been attained.
If a part of this Green New Deal demanded placing in place simpler, national-level permitting standards like those who exist in Australia, we might see a significant reduction in the price of solar which would certainly increase adoption simply to a cost-competitive basis, which also means an increase in projects also gets us that much closer to our ambitious renewable energy goals.
Green New Deal policy: A moratorium on constructing new fossil fuel infrastructure (like natural gas)
Daniel Finn-Foley, Storage: If your home is in New England, you may be forgiven for believing this law exists! Pipelines of all kinds are facing pushback. Federal guidance on these would affect extraction surgeries because logistical challenges and transportation constraints affect the bottom line.
Dan Shreve, Wind: An all-purpose war on fossil fuel development is not in the best interest of anyone renewable energy developers.
Daniel Finn-Foley, Storage: It’therefore true that if an effort were made to electrification of heatingsystem, it might take time that is that pipeline infrastructure would have to be reviewed and potentially replaced to meet heating needs safely. For updating infrastructure for reliability and security, any moratorium would need to contain clauses.
Brett Simon, Senior Energy Storage Analyst at Wood Mackenzie: A policy I think could be cool to see at scale would be what New York is currently doing with the state’s peaker plant assessments. The state is currently doing a complete set of peakers, with a goal so that they may be incrementally retired to make way of identifying the dirtiest. It’d be awesome to see something. Difficult? Sure. But the impact on carbon emissions could be significant.
Dan Shreve, Wind: Intermittent renewable energy resources need balancing sources, and there isn’t any plausible means to develop the kind of bulk transmission resources and energy storage in the interval suggested by GND supporters.
A better alternative may be to focus efforts on the removal of the very last remnants of their United States coal fleet and promotion of R&D into carbon capture and storage alternatives for your U.S. natural-gas fleet. As usage rates dwindle over time, the portion of the fleet can be retired in favor of storage resources.
Wade Schauer, Power: Carbon capture and storage costs $ and there aren't areas to inject the recorded CO2 underground. It makes economical sense for improved oil recovery, which sort of defeats the goal. CCS technologies may have merit, but they won't be in a position to contribute in a manner to any 2035 or 2030 targets.
Potential Green New Deal policy: Regulations on where business can supply electricity
Daniel Finn-Foley, Storage: This point may practically be redundant soon. Renewables are the lowest-cost alternative in several markets, and extra scale by a Green New Deal would further cement their guide. Industry will follow the money, making their transition to renewables a outcome of this Green New Deal, instead of a step that is necessary.
1 wrinkle is when the issue expand beyond electricity to processes — placing limits or guidance may be necessary to fully decarbonize, but may be much less viable from a cost standpoint.
Anthony Logan, Wind: If regulations have been levied on where business can supply electricity, obligated companies will tremendously benefit from the work of companies we’ve ever noticed so far that have willingly sourced renewable power.
Green New Deal policy: Requirements to decrease carbon emissions from the construction sector (solar-friendly, efficient, etc.)
Daniel Finn-Foley, Storage: There’s to consolidating the energy and housing industries through regulations similar to this that doesn & rsquo; t regularly find much attention, a justice component. In California, where housing prices are already the second-highest from the country (behind Hawaii), forcing brand new homes to have solar panels would increase home costs, possibly exacerbating the issue.
While the general societal costs may be positive, setting the heat on homebuyers and frauds can result in severe pushback, thus blending solutions (like advocating low-income or more home regulations as well as solar or energy-efficiency conditions, for example ) will be needed to genuinely tackle climate change from the residential industry.
Green New Deal policy: Subsidized intelligent grid and efficiency retrofit programs for homes and Tiny businesses
Fei Wang, Senior Grid Edge Analyst at Wood Mackenzie: Energy efficiency is not generating as much enthusiasm as grid border topics but there’s a terrific amount of effort to be accomplished there. This could involve more stringent and better-defined efficiency standards for buildings in most industries and grades associated with property worth (think mandatory efficiency performance disclosures for real estate listings in Europe). The hardware, software and labor needed to push buildings to become more efficient are all part of the landscape of jobs, which will overlap with structure and production as well.
Like the mandate of PV on new builds in California, mandates of efficiency criteria on the two builds and retrofits on existing buildings could be useful for decarbonization along with the development of cleantech . By way of example, doors can open and put down the foundation for flexibility opportunities.
Green New Deal policy: Ending fossil fuel leasing public lands
Daniel Finn-Foley, Storage: This could be a huge deal — a 2018 report from the U.S. Geological Survey reported that a quarter of all U.S. emissions come from fossil fuels extracted from federal lands. Those emissions would not halt as other sources could make up the gap. Rather, the abrupt decrease in supply could drive up costs, making energy more aggressive.
Another study from the journal Climate Change by Peter Erickson showed that the net effect of a “render it in the ground” approach is a 5 percent decrease in CO2 emissions by 2030, that will be almost 20 percent of this sum the U.S. had formerly committed to beneath the Paris Agreement.
Green New Deal policy: R&D stimulus geared toward cleantech (grant programs through the DOE, etc.)
Ravi Manghani, Storage: There is precedent for government support for clean energy technology. The DOE loan guarantee program dropped over $500 million using its loan to Solyndra, but the program wiped its own losses and has since affirmed firms like Tesla. To be able to mobilize a Green New Deal, we would need with pockets a few hundred billions dollars, similar programs deep.
Daniel Finn-Foley, Storage: According to a 2001 federal academies research , every dollar spent DOE-led R&D attempts led to $20 of economical benefits. As DOE attempts from the intervening years have accelerated job growth in renewable energy, also directed innovation of low-watt lighting, and lacked other attempts which have led to massive job gains and energy savings, it’therefore not tough to envision this 20x multiplier being even bigger today. Given that, it’s pretty easy to know why China’s electricity R&D funding is almost three times that of the U.S. as a proportion of GDP, and it's growing every year. DOE stimulus is a economy enhancer that is proven, so additional investment is really a no-brainer save consumers money on their electric bills and to create jobs.
Ravi Manghani, Storage: Another application worth emphasizing here is the stimulus bill known as the American Recovery and Reinvestment Act of 2009. ARRA funding has been the massive round of capital to support advanced energy storage jobs. The origin of this now-booming energy storage market in the U.S. can all be tracked back to ARRA funding. In the end, ARRA affirmed over 500 megawatts of electricity storage jobs.
Anthony Logan — Wind: Floating overseas will come into maturity right at the close of the conversation period but funding a serious near-term R&D effort would help accelerate expenditure reductions and create the technology viable on a significantly bigger scale prior to the end of the decade.
A sizable buildout of drifting will provide not only greater capacity factors by opening up sites with high windspeeds in water but also mitigate the shortage of diversity which will begin to hamper the offshore wind farm strategies on the Atlantic coast. There’s a question of quayside area availability, but on the surface, floating breeze ’s ability to construct the whole unit in vent and tow it out to sea could go a long way to mitigating the need to dance around Jones Act limitations on installation vessels.
Since we would have to utilize considerable distances from shore to fulfill GND power requirement, for maximum effectiveness, any R&D funding for the technology would also should include an effort to hasten the massive reductions in price per mile for export wires we all ’t noticed in the past few years.
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