Why can’t we have a Congress that works? Here are two green bills that are likely to succumb to political inertia, even though they’re both good ideas.
The two bills are Sen. Mark Udall's (D-Colo.) E-KNOW Act and Sen. Ron Wyden’s (D-Ore.) Storage Technology for Renewable and Green Energy (STORAGE) Act. Both bills have long lists of supporters and both have failed to pass in previous years -- E-KNOW since last year (under a different sponsor, Sen. Edward Markey (D-Mass.) and the energy storage bill since 2009.
It’s hard to see either one passing this year, given that Congress can’t even renew existing green support -- witness the struggle to renew cash grants and tax credits for solar power, wind power and geothermal power, all of which have kept green energy afloat through the recession.
Certainly it’s even harder to see them passing anything that would direct more money to the industry, as Wyden’s bill would do for batteries, fuel cells and other grid energy storage technologies. The bill offers a 20 percent investment tax credit, capped at $40 million, for grid storage projects, as well as a 30 percent credit for on-site storage that’s capped at $1 million, intended to boost small-scale storage.
No form of energy storage (besides pumping water uphill) can pencil out against grid power right now, making it an industry in need of incentives. But wind and solar power need something to balance out their dips and surges in power generation. As utilities approach double-digit penetration of solar and wind onto their power grids, they’re going to have to build storage to balance it out, or build a lot of new natural gas-fired peaker plants to do the job.
Right now, peaker plants have the financial advantage in almost all cases, though storage to back solar and wind is being tried out in places like California, Texas and Hawaii. The California Energy Storage Alliance trade group argued in a February report (PDF) that batteries actually beat out gas-fired peaker plants, but that analysis was done using natural gas prices in 2008 -- and those prices have fallen nearly by half since then. In other words, if you believe shale gas is the answer to America’s future energy problems, then you probably don’t have a bullish view on energy storage. We’ll see whether or not storage can make its case before Congress, and if that case can be heard.
Of the two bills, E-KNOW is definitely cheaper, since it wouldn’t direct tax incentives to an industry, as Wyden’s bill would do. Rather, E-KNOW would mandate that utilities and other companies share and disclose energy data to their customers, and calls for legislation and new rules that set guidelines for making that information available via a variety of technologies.
Complying with those provisions could still cost a lot of money, of course, but it’s arguably money that must be spent anyway, if we’re to have a truly interoperable smart grid. Federal standards for open energy data exchange like OpenADE are in the works, so utilities know they’ll have to share data at some point. U.S. CTO Aneesh Chopra has called for a “green button” system to translate everyone’s power bill into a common format, and utilities in California and elsewhere are starting to try to meet that call.
Utilities are largely regulated at the state level, giving would-be energy data entrepreneurs a patchwork regulatory landscape to sell into. Setting federal standards should give the industry more confidence that investments in data sharing will pay off across multiple markets.
Still, it’s not clear that the economics for home energy sharing are quite there yet, at least on the residential side. Google and Microsoft both gave up on their free home energy portals this fall after less-than-overwhelming interest from homeowners, and Cisco has put its home energy dashboard under wraps. No doubt it will take more than federal guidelines to make a market in home energy management. Still, it would be nice to see Congress get behind the idea -- if only to demand protections for constituents’ energy data privacy and security.
Will either bill see the light of day in 2011? We’ve got Thanksgiving 'til Christmas to see. We'd be happy just to see the Section 1603 grants and wind power production tax credits get renewed, and put the other stuff off for next year. Hopefully, the business cases will only be getting stronger.