Green Project

Energy Budget Dominates Week

The main story of interest this week is the President’s Budget request  released on Monday, February 13.  The White House Federal Budget Overview can be found here.       


The FY 2012 budget request for Department of Energy increased DOE spending by 11.8% over the FY 2010 budget to a total of 29.5 billion.  Allocation of this 29.5 billion is as follows:

  • 11.9 billion for nuclear weapons and nonproliferation missions
  • 6.3 billion for environmental cleanup and radioactive waste management
  • 5.9 billion  for basic science and advanced research projects agency – energy
  • 291 million for innovative and advanced energy technology credit programs
  • 4.8 billion for  energy supply and energy efficiency programs

Of critical interest to Electricity 2.0 in this Budget Request are the following:

  • $450 million increase in funding for basic energy science research which will create three Energy Innovation Hubs to focus on batteries, critical materials and Smart Grid technologies. 
  • 88% increase in technology funding for solar energy including a  61% increase in technology funding for wind energy; a 135% increase in technology for geothermal energy and a 58% increase in biomass energy. 
  • $69 million in new and increased funding for Smart Grid electricity transmission technologies and energy storage
  • Expansion of the DOE Loan Guarantee Program with $200 million proposed to subsidize new loans, which could translate to as much as $2 billion in additional loan volume for renewable energy and energy efficiency renovations

Electricity 2.0 programs and areas that will benefit as a result of the FY 2012 Budget:

  • Electric Vehicles – to back up the President’s goal of putting one million electric vehicles on the U.S. roads by 2015, the budget includes $200 million in competitive programs to encourage communities that invest in electric vehicle infrastructure
  • Clean Energy Strategy - the budget proposes to double the share of electricity from clean energy sources by 2035.  By clean energy sources, the Administration includes  renewable technologies, clean coal, nuclear power, and natural gas
  • Research and Development –$8.7 billion federal investments in R & D that focus on accelerating the diffusion of clean energy technology in the marketplace
  • Renewable energy – a 70% increase in renewable energy R&D support for 1 dollar a watt initiative to make solar energy cost competitive and funding for a 24 hour geothermal storage and increased funding for wind energy R&D

Other Agencies with Energy related funding:

  • Department of Agriculture:   $6.5 billion for financial assistance to USDA electric cooperatives to promote expansion of renewable energy technologies
  • Department of Defense: a focus on projects to reduce carbon based energy use, the deployment of more efficient turbine engines, alternative energy sources and storage technologies that reduce need for local generators
  • Department of Interior:  $73 million for renewable energy development activities including the review and permitting of new solar wind and geothermal activity generation capacity on federal lands.

 Chair of Senate Energy and Natural Resources Committee, Jeff Bingaman  (D-NM) in a press release stated his strong support of the increases pro9posed for Department of Energy programs.  DOE Secretary  Steve Chu testified before the Senate Energy Committee on Wenesday, February 16, on the proposed DOE Budget. 

Meanwhile, on the House side, Chair of the House Energy and Commerce Committee, Fred Upton (R-MI) was far more concerned with the Continuing Resolution’s EPA blocking language.  Meanwhile, Congressman Henry Waxman (D-CA), Bobby Rush, and John Yarmuth circulated a “dear colleague” letter attempting to rally support for their efforts to strip EPS-blocking language.  To read the letter click here. 


The Secret Sauce of Economic Growth

Over the last few decades, the field of economics has made important strides in understanding economic growth.  The secret sauce in the new growth theory is something called increasing returns.   They are not not supposed to occur in classical economics and don't occur in classic models of the broad economy.  However, they do occur in the real world.  Cities, for example, would not exist without them.  Expressed simply, increasing returns are the improvements in economic output that arise from mixing the right recipe of ingredients together, ingredients that enhance the value of one another.  They show up in cities, regional clusters and firms as economies of scale.

While we may associate economies of scale with large companies--Henry Ford's giant River Rouge plant, for example, where steel came in one end and cars out the other--in fact, you don't need a large company to get scale economies.  (Large firms exist because they simplify interaction; people within a firm don't need to negotiate a contract every time they work together.)  Economies of scale also occur among lots of small companies and players in close vicinity to one another which is what takes place in a city.  While increasing retuns don't have to create large firms, what they do create is all good: growth, new jobs and growing regions that include large and small companies alike.  The secret sauce that makes it all work are what economists call externalities--the benefits participants confer on one another. Paul Romer has used the word recipe to describe this mix.  In other words, just as tomatos, garlic and cheese enhance the value of one another in a dish, complementary skills among people working together or the spillovers in the air in places like Silicon Valley create increasing returns: the secret sauce of economic growth.

America has seen many great agglomerative clusters in its history that have helped fuel the American dream.  One such cluster arose in Detroit.  Alfred Sloan, legendary GM CEO in his classic book, My Years at General Motors (that Bill Gates used as his roadmap to building Microsoft) describes the early years when he worked at a ball bearing company and the industry grew on a platform of complementary skills and knowledge in the air about making brakes, ball bearings, tires, engines and all the other ingredients of a car. 

Detroit fell on hard times as the Superbowl Chrysler commercial featuring Eminem recently underscored but is now vying to retrieve its greatness.  But the story of Chicago's slaughter houses, New York's hat makers and financial companies, Boston's Route 128, California's Silicon Valley, Charlotte's banks and a host of other clusters are virtually synonymous with the story of American economic greatness.

However, research has also shown that clusters do not have to be geographic. Standards, it turns out, allow the secret sauce of increasing returns to work across wider distances by allowing providers of complementary products to find one another.  A classic example is the introduction of common standards in the garment business led to its expansion outside of New York's garment district.  More recently, the Internet led to an entire wave of economic growth. 

Thus the second great growth story in American economic history is national growth that took place based on standards across our unsurpassed national networks, first our rail and Interstate Highway systems, but more recently, our communications network.  Networks with open standards allow actors not only across America but across the world, to interact with one another and increase the value of one another's output and knowledge.

The key to networks creating the secret sauce of increasing returns is open standards that let a smart phone and person in New York talk to a server in California.  The Internet has obviously fueled grown in the last decade.  Which brings me to clean energy.

Energy is an industry with storied clusters of its own.  The oil patch in Texas and Lousiana--that grew up around American oil--in time became far bigger than our oil alone supported.  Long after Spindletop pumped its last barrel, leaving a salt dome that is now used for storage behind, US oil companies helped develop oil in Arabia, Nigeria, Venezuela, Mexico and, indeed, all over the world.  Recently, US engineers unlocked the mystery of shale gas which promises to be a game changer in energy for years to come.

However, while US companies are still leaders in extracting oil, imported oil has grown fantastically expensive for a simple reason: the formation of OPEC. Our oil import bill last year was $337 billion, about $3,000 per household.  The way GDP is calculated this comes right off the top, lowering our GDP by 2.23%. Oil is still a good business for the US (though it comes with geopolitical and environmental costs), but our need to import two thirds of it has created a massive drain on wealth.  To see just how large it is, imagine how good Americans would feel if every household received a $3,000 per year raise in perpetuity?

The question is how do we transition to cleaner forms of energy that do not lie abroad? 

History suggests if we are serious about doing clean energy we need to generate some increasing returns. Right now the biggest clusters of clean energy activity are not in the United States.  They are in Germany, Japan and China.  But it is not too late for us to get a healthy share of the pie.  Silicon Valley has obviously been active in clean technology.  Clearly, there is an emerging clean tech cluster in California.  The beginnings of an electric vehicle cluster are evident as well, with Tesla assembling the Tesla sports car in Menlo Park and, in partnership with Toyota, preparing to build a family car at the repurposed NUMMi plant in Fremont.  Because electric cars are very similar to gasoline ones, automakers are building them at or near where they make existing cars.  GM is building the Volt in Detroit and Nissan the Leaf in Smyrna Tennessee.  A123 is building batteries in Michigan.  GE builds turbines in Michigan as well. Hard hit Michigan could be a center for clean manufacturing.  To get these clusters into gear, however, we need to generate more local American demand.

The second way to apply the secret sauce of economic growth to clean energy is across our networks.  NIST in
conjunction with DOE, FERC and others is sensibly working on open standards for the Smart Grid that can facilitate network effects and externalites across the communications portion of the grid.  It is vital that these standards stay open.  However, perhaps the greatest network of them all, with repect to clean energy, the electricity network, itself, is still far too balkanized, proprietary and byzantine.  Clean energy is being held back in the United States by a blizzard of complex regulations that block hookup to the network as well as open use of the network to connect complementary players and even producers and consumers. The Green Lane  proposal I unveiled last week--a proposal to create an open access lane across the electricity with plug and play connectivity to provide easy on and off ramps--is one way to unleash the network effects (or secret sauce) that the electricity network ought to be providing.

The best part of opening up the electricity network is that it will lead to the formation of geographic clusters in Michigan and elsewhere building turbines, solar panels, as demand ramps up for clean power and related products.

The American economy is in recovery.  But it is recovering slowly.  To unleash real growth and wealth creation, it is time to apply some secret sauce in the form of network effects and increasing returns to refuel the American Dream.

Michael Moynihan leads thoughtful discussion on Electricity Transmission

Michael Moynihan, Director of NDN's Electricity 2.0 Program. lead a thoughtful and engaging discussion at the Clean Economy Network Summit yesterday afternoon.  This discussion focused on a new vision for the delivery of electricity in the new 21st century.  FERC Commissioner John Norris was an important part of this roundtable discussion of 29 thought leaders in the electricity arena.  Commissioner Norris outlined  three important areas that will drive this discussion:  Transmission and Cost Allocation, Demand Response and Compensation, and Vertical Integration of Renewables. 

Moynihan moderated the discussion among energy opinion makers that included identifying barriers facing the modernization of the electricty grid, what could be done to overcome these barriers and what relevant regulatory bodies (FERC, PUCs, ISOs) can help (or hinder) in this process. For more on the CEN summit, please click here

Moynihan has authored several papers on this very topic which include our signature piece, Electricity 2.0: Unlocing the Power of an Open Energy Network, and  Solar Energy: A Case for Action.

Senator Jeff Bingaman, Chair of the Energy and Natural Resources Committee, will be at NDN, Monday, January 31, addressing energy initiatives for the 112th Congress.  RSVP here.

Electricity 2.0: Understanding the Transformative Potential of Microgrids and Distributed Power

On Wednesday, November 10, NDN hosted a panel discussion moderated by Electricity 2.0 Chair Michael Moynihan on microgrids and distributed generation.  As part of its ongoing series exploring key elements of Electricity 2.0,  this event joined together four industry pioneers; Sean Casten, President and CEO of Recycled Energy Development, Guy Warner, CEO of Pareto Energy, John Kelly, Deputy Director of the Galvin Initiative and Jeff Marqusee, Executive Director of SERDP and ESTCP at the Department of Defense who is leading microgrid development at the Department of Defense.

These leaders in localized generation and power management discussed the overwhelming success of cogeneration.  Cogeneration has revolutionized industrial power in the US, but also the huge, untapped potential of microgrids harnessing cogen and distributed power to modernize American electricity.  The opportunity is immense but key policy obstacles continue to block implementation.  Comparatively, minor changes in law could unleash an explosion in clean, microgrid power that would not only improve America's carbon footprint, but also democratize energy and create a large economic platform for job and wealth creation.  

Among the panelist's suggestions:

  • Amend the Clean Air Act to measure air quality outcomes, not inputs so that adding cogen does not inadvertently trigger project-killing regulatory filings.
  • Allow companies and private applicants access equal to that of utilities to run wires across streets particularly in industrial areas.  Currently, outdated laws often prevent companies and government installations from sharing excess clean power with neighbors or even affiliates if a street lies in the way-even if that power would meet a critical need.
  • Replicate the idea of Energy Improvement Districts developed in Connecticut nationwide to facilitate efficient microgrid development Develop common standards for supergrid-microgrid connections to facilitate network resilience.
  • Publicize areas lacking adequate substations and electrical service that might be good candidates for microgrids.
  • Provide funding for US government facilities, particularly, military ones to improve network resilience and security through microgrids and distributed generation.

These are only a few of the ideas discussed at this event.  To watch the video, click on the link below.


NDN Event Space
United States

What's Next on Energy and Climate

There has been a good deal of chatter and hand-wringing lately about the Ryan Lizza New Yorker piece which tries to tick-tock how cap and trade went off a cliff.  Yet for those of us who are biased towards what we can do outside the Beltway and from the bottom-up, it seems like a good time to review some of the strategic actions we can take that don't just depend on Congressional kumbaya alone.

Here is a short memo laying out 5 supplemental but decidedly big strategies -- all of which are compatible with continuing the fight for a comprehensive climate bill. 

What’s Next on Climate – Five Strategies for Moving the Clean Economy

Memo available in pdf.

We've had a frustrating year for carbon reduction.  Negotiations in Copenhagen fell short of expectations and far short of what was necessary to generate momentum for global policy initiatives here in the United States or anywhere else in the world.  U.S. legislation weakened and wobbled throughout the legislative term, leaving proponents looking as much for scapegoats as for solutions.  AB-32, California's model for progressive action by states who want to make their own run at carbon reduction, has been on the ballot and on the defensive. Federal regulatory authority, the ace in the hole for cutting carbon, is also hanging in the balance.  The President now talks about moving forward on energy in "chunks".

It is clearly time for clean economy proponents to deploy some new strategies moving forward, if only to diversify the total risk of our current "campaign portfolio" of carbon-cutting investments. 

Nearly all initiatives addressing climate change to date have been targeted at what governments need to do to address carbon.  These approaches, although very important, are not working quickly enough.  Moreover, country-by-country carbon reduction commitments from the advanced industrialized world need to better account for the fact that in the 21st century, carbon emission occurs in the developing world as well, including that resulting from manufacturing undertaken to produce goods for advanced economies.  

Thus it is clear that parallel strategies to engage consumers and further engage the private sector in re-thinking local manufacturing seem wise to consider.  Moreover, when we do seek major changes from government in an era of political dysfunction, we may need to think more systemically about how we can accelerate public policy change in this challenging context, and not just in Washington, DC alone.  We therefore see 5 supplemental but decidedly big strategies, all of which are compatible with continuing the fight for a comprehensive climate bill and better price signals on carbon:

Accelerate innovation in the domestic electricity sector by moving to Electricity 2.0.

Boost utility innovation by working with wireless and IT companies, across Congress, the Federal Energy Regulatory Commission, and all-important state Public Utility Commissions to create new planning and pricing mechanisms to launch next-generation micro-grids at universities, corporate campuses, government facilities, and commercial real estate developments.  Getting to innovation and clean technology friendly Electricity 2.0 - which is critical to US economic competitiveness - will require a more open energy network where utilities, innovators, regulators, and customers align their incentives.  As DOE Under Secretary Kristina Johnson said recently about the nation's $400 billion electricity business, "We need a more flexible system for delivering power intelligently.  We need Electricity 2.0.  The extent to which that comes to pass will determine whether we are able to effectively compete in the 21st century."

Leverage local efforts to drive clean economic development from the bottom up.

Think anew about "grassroots campaigns" that are focused not just on getting business and other community members to lobby Congress, but are instead designed to seed transformative "jobs and innovation partnerships" locally and stand up new, public-private models for accelerating regional market creation and the growth of clean economy start-up businesses.  While boosts in federal R&D are important, the critical financing gap we need to close involves creating new, small-scale equity project finance mechanisms that can help small companies get out of entrepreneurs' garages as well as university labs -- and get to commercial scale. 

Create a global low-carbon supply chain.

Accelerate the roll-out of innovative private sector-led initiatives to "green" manufacturing supply chains in China, the U.S. and other key markets.  Industrial efficiency is higher-impact, lower-hanging fruit than anything else out there, and, unlike residential efficiency, we know how to do it at scale right now.

Also key: removing tariff and non-tariff barriers to clean technologies around the world. Massive markets in the developing world, including India and China, now have significant barriers to importing clean technology. Removing such barriers the world over will make clean technology cheaper in comparison to fossil energy. Recent commitments from the G-20 countries to phase out fossil subsidies will also help change comparative price levels world-wide.

Aggregate clean energy consumers' buying power.

Engage millennial consumers in ways that are not gimmicks but effectively aggregate their growing power. Eighty-six percent of Millennials (and 91% of their moms) desire environmental brand information when they shop. The two groups carry enormous clout in the marketplace. Moms control 80 percent of household expenditures; college-aged Millennials have $40 billion of discretionary income to spend each year. 1 out of 3 adult Americans will be members of the most environmentally conscious generation in history by the end of this decade.  As a result, Millennial-influenced purchasing decisions and activism will play a key role in moving the country closer to its international environmental commitments.

Employ a tax-neutral strategy for carbon pricing.

Cap and trade was decried by its opponents as big government, and its complexity opened it up for attack. Instead, let's tax something we don't like - carbon - and in turn alleviate a tax on jobs, the payroll tax. Such a program does not expand government, reduces a major, direct downward pressure on jobs, and helps create demand for clean technology.  Once the political silly season is over, we think Americans would support such an idea if some portion of the funds were dedicated to clean energy - as gas taxes are for road-building. 

The big narrative that perhaps brings this all together?  Create a public-private US energy independence venture fund, authorized by the federal government, but deployed and invested in local economies so that it's local leaders not the federal government who collaboratively choose the best clean economy projects.  Open the fund up to additional citizen investment so Millenials, Boomers, and Gen-Xers could all share in the upside of accelerating our national quest for U.S. Energy Freedom.

For more information on the steps to get there:

Electricity 2.0
Acceleration Agenda:

Bottom-Up and Regional Innovation
Full NPI Working Paper, The Acceleration Agenda:
Enterprise Innovation Funding:

Low-Carbon Supply Chains
Responsible Sourcing Initiative

Aggregating Consumer Market Power

Addressing Climate Change Without Impairing the U.S. Economy: The Economics and Environmental Science of Combining a Carbon-Based Tax and Tax Relief

The Blueprint Electricity 2.0: NDN's Acceleration Agenda

Paper available in pdf form

The Blueprint Electricity 2.0:
NDN's Acceleration Agenda

Like it or not, the energy and electricity business is heavily driven by the rules of the road set by local, state and federal policy-makers and regulators.

The Acceleration Agenda provides a go-fast roadmap to remove barriers to transmission and renewable power, promote wireless smart grid technology, increase R&D, and spur microgrids and other innovative new electricity products and services.

The Goal of Electricity 2.0: Create a Clean, High Performance Economy

Electricity 2.0 has the potential to:

  • create wealth and jobs by driving innovation in electricity and improving the competitiveness of the power-hungry US economy
  • enhance energy security by increasing network resilience and reducing demand for resources
  • aid the climate by reducing greenhouse gas emissions

To accomplish these broad goals, it must promote:

  • Cheaper, more abundant electricity
  • The proliferation of new electricity-related services and functionality
  • More efficient, smarter delivery of electricity
  • Greater electricity network reliability and resilience
  • Cleaner, more environmentally friendly power

Approach: Grow New Platforms for Economic Activity

History has shown that the fastest way to drive innovation in a sector is to create open "platforms" for economic activity with no-or-low barriers to entry that reward risk-taking and investment and draw new players, ideas and capital into the sector.  The120 volt platform has been a success but is a century old.

It is time to create new, open platforms beyond the plug to include:

  • Network-wide electricity management software
  • Microgrids at universities, corporate campuses, government facilities, real estate developments and high tech buildings that integrate electricity production, load and management
  • Enterprise level networks spanning multiple geographic locations
  • Localized, home and office energy networks
  • Electricity trading platforms to connect new producers and end users in order to expand the market for the former and increase buying options for the latter
  • A low voltage DC platform to run the plethora of low voltage devices now in use

The existing 120 and 240 volt "platforms" should be enhanced as well to provide improved reliability, new features, intelligence and other value added services.

Policy Changes: Eliminate Barriers

Accelerating Innovation and opportunities in the utility sector will take success on many levels --both in Washington, DC and in states and regions.  What can link all this work is the identification and elimination of common barriers.

  • Increased R&D for electricity
    • Under the rate-base system, governed mostly by local public utility commissions, utilities receive no economic reward for the risk of investing in new technology and little support from regulators for investing in R&D. Lack of R&D has limited advances in the science and technology of electricity delivery. Its little wonder that utility R&D (less than 1% of revenue) lags severely behind automobiles (3.3%) and high tech industries (typically 15% or higher).
    • To address the R&D gap, the government should increase electricity R&D spending tenfold.  Longer term, the architecture of the system must be reformed to provide utilities and others a return for R&D expenditures and technological risk taking.
  • New Rate Structures
    • In most industries, interstate commerce protections are understood to extend to end users.  In electricity, they only extend to bulk purchases. Interstate commerce protections and related tariffs should be extended to entire transactions.
    • FERC should create tariffs to allow utilities to service regional or national customers.
  • Eliminate Microgrid Barriers
    • The inability of non-utilities to move power across public thoroughfares is a cross cutting barrier to innovation, blocking microgrids and enterprise power.  A transparent permitting process is needed to allow private networks to cross public thoroughfares. Producers of onsite power should be able to sell that power back to the grid or to other users.
  • Public Investment in Microgrids
    • DOD and the GSA should lead the way in the development of microgrids to efficiently manage electricity generation and load.
  • Increased access to long distance power on the transmission grid
    • Commercial and industrial users situated near transmission wires are currently unable to access power directly from the transmission grid but instead must pay local transportation charges even when they do not require local transport.  In contrast, commercial facilities locate next to Interstate highways or railways precisely to gain access to lower cost transportation.  As transmission capacity is increased, access should be made available to end users.
  • The new generation of planning mechanisms
    • Meeting future electricity demands and accelerating innovation will require wise planning linking public and private partners.  Different regulatory and planning mechanism structure demands a fresh look at how we organize and build new generation transmission and customer engagement platforms.

Create New Rules of the Road

Modernization of America's electricity infrastructure requires:

  • Targeted federal legislation to provide 
    • Enhanced FERC authority
    • Race-to-the-top funding to drive action at the state and local level
    • Improved linkages between DOE labs, universities and the private sector
    • Investment for Research and Development
  • FERC rulemaking consistent with legislative authority
  • State level legislation to foster innovation
  • State PUC action to facilitate innovation
  • ISO rulemaking to foster innovation
  • Action to accelerate innovation and adoption of clean energy by
    • municipal utilities,
    • investor owned utilities,
    • Rural cooperatives and the USDA Rural Utilities Service
    • Federal power agencies
    • Global outreach through the International Energy Agency and international process launched at the First Energy Ministerial

About NDN and The New Policy Institute

NDN's New Policy Institute is a think tank based in Washington, D.C.  The Electricity 2.0 initiative was launched this year to modernize America's Electricity network and unlock the economic potential of an open, innovation and renewable, friendly electricity network.  NDN will be working with industry and NGO partners to unlock the economic potential of open electricity networks. 

For further information about NDN Electricity 2.0 efforts in your region, please contact Clare Giesen at 202-384-1216.

Pivoting from Cap and Trade

Yesterday, Senate Majority Leader Harry Reid announced that he will no longer pursue cap and trade legislation this year.  Since this year was the best shot cap and trade could ever have asked for, it also appears to be dead for the forseeable future.  In many ways the fate of this idea that has captivated environmentalists for almost two decades was sealed last fall in Copenhagen when the US and other industrialized countries failed to come to a meaningful agreement with the newly industrializing giants, China and India.  Adding to the sense of disappointment greeting yesterday's announcement, it also appears that there is no appetite in the Senate for a national renewable electricity standard this year.  A somber and resigned editorial in today's New York Times summed up the feelings of environmentalists who feel exhausted by so much effort for so little and frustrated that the Obama Administration chose not to expend more political capital on a deal. The failure of this policy proposal, however, does not change the fact that a rapidly exploding world needs clean energy and the nations that lead in its development and implementation will reap economic dividends in the 21st Century.  In fact, a carbon regime while helpful in moving Europe toward that clean energy future has not proven decisive and there are many other policy tools available to achieve the same goal.

First, the network at the center of the wide energy system is the electricity network and in the United States the very structure of the network is unfriendly to clean, renewable energy and technology.  Many people have commented on the antiquated state of the US grid.  The real problem, however, is the incentives in the balkanized, industry that gave rise to the grid and will continue to block modernization until they are changed.  The Electricity 2.0 project centered at NDN is designed to design and implement a new, more open, electricity architecture that in opening the system to renewable energy and new technology, can not only create new wealth and jobs but also lower carbon emissions. 

Second, while cap and trade was designed to make fossil fuels more expensive, perhaps the real issue globally is that almost all the nations of the world actually subsidize fossil fuels--far more than a cap and trade regime would have raised their cost.  Thus a direct and efficient way to even the playing field for fossil and non fossil fuels would be to end these subsidies.  In many countries they take the form of direct subsidies of gasoline.  India and China both subsidize gasoline--in contrast to the US which taxes it.  However, the US provides generous subsidies for the carbon based economy that run all the way from a foreign policy that rightly views oil availability as a strategic imperative to incentives for drilling to incentives for coal.  It is not realistic to end these immediately--certainly for as long as we rely primarily on oil to power cars-or even soon but over the long term, lowering subsidies could have a far greater impact on lowering fossil fuel dependency, than putting a price on carbon.

In addition to these ideas, there are numerous other ways to move the world in a clean direction from city initiatives such as those undertaken as part of the Clinton Climate Initiative, to better financing mechanisms for renewable energy project such as a Green bank to the PACE program, pioneered in Berkeley, to fund distributed solar energy through property taxes.

In short, while the defeat of cap and trade this year postpones for some time the longstanding project to put a price on carbon, it should not halt those who care about the environment, energy security and jobs from continuing to work to implement new solutions.  Over the long term, the world needs to move from dirty to clean energy and there are many ways to get there.

Today @ 3:30 - Electricity 2.0: Envisioning the Future of Electricity w/ Chairman Ed Markey

Today, NDN will host an important and groundbreaking event focused on charting a course to the electricity future. Entitled Electricity 2.0: Envisioning the Future of Electricity, the event will feature remarks by:

  • Congressman Edward Markey, Chairman of the House Select Committee on Energy Independence and Global Warming and Chairman of the Subcommittee on Energy and the Environment

and a panel discussion with:

  • Clem Palevich, former President and CEO of Constellation New Energy 
  • Nick Sinai, Director of Energy and Environment for the Federal Communications Commission 
  • Jigar Shah, founder of Sun Edison and now CEO of the Carbon War Room 
  • Michael Moynihan, author of the recent policy paper from NDN & the New Policy Institute, Electricity 2.0 

In addition to protecting our climate and enhancing energy security, clean electricity has the potential to power a new wave of prosperity. It can serve as a platform for entrepreneurs and innovators to create new jobs and build new industries.  

In order to meet this challenge and achieve clean electricity's promise, the United States must update our antiquated grid and add dramatically more renewable resources. The US currently supplies 3.5% of power from renewables, compared with 28% in Denmark. 

Electricity 1.0 helped secure reliable, universal power. But with R&D in the electricity industry having dwindled to less than 1% of sales, utilities constrained from offering new products and services, renewable generators unable to get their product to market, and consumers unable to control their energy destinies, it is time for an upgrade to Electricity 2.0. With a new open architecture in place and the right incentives to restore innovation and revive investments, Electricity 2.0 promises to do for energy what the Internet did for communications.  

Electricity 2.0: Envisioning the Future of Electricity
Tuesday, May 11 @ 3:30 p.m.
U.S. Capitol - Room HC-6 (access through South Entrance)
A live webcast will begin at 3:45 p.m. ET
RSVP  :  Watch Webcast

We are on the cusp of a revolution in how the world creates, trades, and consumes energy. However, for that revolution to occur we need to create a new modern, open, and secure electricity architecture that allows innovation to flourish.

Media Round-Up: Green Project Director Michael Moynihan at COMPETE Coalition Forum

Yesterday, Michael Moynihan spoke alongside energy experts Bill Massey, Dan Munson, and Kurt Yeager at an event hosted by the COMPETE Coalition. Here are a couple of the accounts of the event from trade press:

From Restructuring Today:

Compete Coalition conference reminded why innovation is key 

The current system of power industry regulation is ill-suited for driving innovation in the very significant ways needed to address climate change, experts said at a Compete Coalition event yesterday in Washington. Innovation in the industry has been declining, notwithstanding the work at EPRI, with low R&D budgets and little incentive to try new things, said think tank NDN's Green Project Director Michael Moynihan.

Moynihan's report titled "Electricity 2.0" advocates opening up the grid or "network" to two-way communication between customers and suppliers.

More here (subscription required).

From Electric Power Daily:

Experts decry antiquated nature of grid, regulations 

The current regulatory structure "has created the grid it was designed to create" but is extremely ill-suited to meet the needs of a 21st century electric industry, an official with a Washington think tank said Wednesday.

US consumers can "buy flowers from Ecuador but can't get electricity, moving at the speed of light, from one coast to the other," Michael Moynihan, director of NDN's Green Project, said at a panel discussion hosted by the Compete Coalition.

With a structure that offers no incentive to conduct innovative research and development, or even to deploy innovations by others, the electric utility industry cannot be expected to lead the way to a clean energy future, he asserted. Moynihan avoided laying blame entirely at the feet of the power industry, observing that "we absolutely do not have the policies in place" to encourage innovation; to the 

contrary, they work against it.

Sharing the view that industry is not to blame, Dick Munson, senior vice president at Recycled Energy Development, agreed it is a policy problem. "Without competition, we are going to limit ourselves to expensive and dirty power," he asserted. The current regulatory regime "is byzantine at best."

But that does not mean there is no role for government, Munson continued. "Government needs to set the goals for where we are headed," and open up the markets to "a flood of innovators and entrepreneurs," he said.

Decrying a "bipartisan habit" on Capitol Hill of trying to pick winners, Munson suggested Congress should "set the standards and let the market figure out how to get there." And whatever the standards, added Kurt Yeager, executive director of the Galvin Electricity Initiative, the government must hold all companies to them.

One thing that is desperately needed is a standard for putting power onto the electric grid, Moynihan said. While there is a standard outlet for a consumer to plug into to draw electricity from the system, there is no standard inlet for getting power onto the system, he continued.

"That is precisely what you have in the organized markets," said William Massey, counsel for Compete. Competitive markets provide a standard "plug-and-play" feature and will "enable the innovation" advocated by the panelists, he added.

"A poorly designed market will perform poorly," Massey said, while a well-designed competitive market that encourages innovation can perform "exceedingly well."

A centralized organization, be it a utility or regulatory body, cannot do what the competitive market can, Moynihan agreed. You are "not going to get the diversity of ideas."

He recalled that AT&T's idea for advancing the old black rotary phone was to introduce the Princess phone. It was only after the telecommunications industry was pried open to competition that real innovation began. Likewise, a major obstacle faced by new technology in the electric industry is the "absence of the correct regulatory framework," Moynihan said.

More here (subscription required).

For more on Electricity 2.0, please visit

Syndicate content