Four Ways Toward A New Energy Economy

A new report from the American Council on Renewable Energy (ACORE) identifies policy approaches to accelerate renewable energy growth.


https://facilityexecutive.com/2020/02/four-ways-toward-a-new-energy-economy/
A new report from the American Council on Renewable Energy (ACORE) identifies policy approaches to accelerate renewable energy growth.
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Four Ways Toward A New Energy Economy

A new report from the American Council on Renewable Energy (ACORE) identifies policy approaches to accelerate renewable energy growth.

Four Ways Toward A New Energy Economy

By Facility Executive Editorial Staff
From the February 2020 Issue

The American Council on Renewable Energy (ACORE) released a report in January 2020 that examines four notable policy approaches identified as having the potential to accelerate the transition to a renewable energy economy and achieving scientifically based reductions in greenhouse gas (GHG) emissions. The report, Advancing America’s Climate Leadership: Policy Options That Most Effectively Put Renewable Energy to Work, discusses specific advantages and limitations of each policy option, individually and in combination. Authored by ACORE’s Greg Wetstone, President and CEO; Bill Parsons, COO; Lesley Hunter, VP of Programs; and Tyler Stoff, Policy Manager, this report offers design recommendations for policymakers to optimize implementation.renewable energy economy

“Through a combination of smart, forward-looking policy tools, we can accelerate the deployment of renewable energy and enabling grid technologies and avoid the worst impacts of climate change,” said Wetstone. “This analysis is designed to help policymakers identify the quickest pathway to America’s clean energy future with the least disruption, at the lowest possible cost.”

Following is a brief overview of the policy approaches highlighted in the new report.

  • A federal high-penetration renewable energy standard (RES) or clean energy standard (CES)
  • A technology-neutral tax credit for zero or low-carbon electricity generation
  • Carbon pricing
  • Complementary measures to modernize antiquated electric grid

A federal high-penetration renewable energy standard (RES) or clean energy standard (CES) would require a minimum percentage of renewable or zero-carbon energy in electricity supply companies’ electricity sales, generating capacity, or electricity purchases. A federal high-penetration RES or CES represents a direct and reliable way to ensure scientifically driven emissions reductions in the electricity sector. The history of successful state renewable energy standards indicates that the long-term market certainty provided by aFE RES can catalyze renewable energy investment and deployment. An effective program should respect ambitious state programs already in place, and carefully incentivize progress in states with limited renewable energy resources or deployment.

A technology-neutral tax credit for zero or low-carbon electricity generation would simplify the tax code and incentivize the market to produce cost-effective climate outcomes, rather than technology-specific inputs. This approach could lower the delivered cost of clean energy to consumers, which could be especially useful in states with higher initial RES compliance costs, and help attract capital to renewable energy investment after the currently scheduled phasedown of existing wind and solar tax credits. A technology-neutral tax credit could also address the continued need for long-term parity in the tax code with fossil fuel generation by displacing the range of permanent incentives for emitting resources, which otherwise would work at cross-purposes with the policy goals of the new credit. The efficiency and impact of the credit can be enhanced through transferability or refundability.

Carbon pricing internalizes the costs of carbon pollution and sends a powerful market signal to drive low- and zero-carbon solutions across the economy. The economy-wide reach of carbon pricing is essential for avoiding carbon leakage and associated price distortions. It also addresses the reality that more than two-thirds of U.S. carbon pollution comes from outside the electricity sector. However, if the goal of carbon pricing is to drive deployment of pollution-free renewable power to help meet mid-century climate goals, policymakers should take care to design a carbon pricing system that accomplishes that objective and avoids incentivizing the creation of new natural gas infrastructure that could become the next generation of stranded assets.

Finally, complementary measures to modernize an antiquated electric grid are recommended to better accommodate the growth of clean energy spurred by these climate policy options through improved transmission planning, enhanced transmission incentives, streamlined siting and permitting for renewable energy generation facilities, improved power markets, and increased measures to foster the growth of energy storage and advanced grid technologies.

renewable energy growthThe American Council on Renewable Energy (ACORE) is a national nonprofit organization that unites finance, policy, and technology to accelerate the transition to a renewable energy economy. Founded in 2001, ACORE is the focal point for collaborative advocacy across the renewable energy sector, supported by members spanning renewable energy technologies and constituencies. Download a copy of ACORE’s new report, Advancing America’s Climate Leadership: Policy Options That Most Effectively Put Renewable Energy to Work, here.

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