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BCSE In Action

April 12, 2013

BCSE Spring Newsletter

BCSE Quarterly Connection, Vol. 8

Table of Contents

President’s View: Investment in Clean Energy is a Pro-Growth Strategy

Federal energy and environmental policy discussions have shifted in 2013.  There is a renewed focus on clean energy and climate change issues in the aftermath of hurricane Sandy.  However, Congress and the Administration are also struggling to reach agreement on debt reduction and budget proposals.  In this context, every dollar of federal spending will be scrutinized.  The BCSE is making the case that investments in energy efficiency, natural gas and renewable energy respond to this critical economic situation by offering  long-term paybacks  in terms of providing energy reliability and security, job creation and lower emissions.

Speaking as a witness to a House Science, Space and Technology Energy Subcommittee hearing on energy market, technology and policy trends  in February, I discussed the track record of results from federal investments in clean energy research, development and deployment. These investments take the form of tax policies, as well as strategic funding of research, development and deployment (RD&D) made through the U.S. Department of Energy and other federal, state and local entities.  In many cases, these initiatives involve partnership with industry or focus on leveraging private capital to deploy clean energy options.

A new tool to demonstrate the value of public investment and policy leadership in the energy sector is the recently released Sustainable Energy in America 2013 Factbook. The Factbook was commissioned by the BCSE and written by Bloomberg New Energy Finance and is a quantitative and objective resource intended to arm reporters and policy makers with up-to-date, accurate market intelligence.  The Factbook fills important data gaps in presently available information by looking at clean energy broadly defined, ranging from large-scale renewables to distributed power, demand-side energy efficiency options and natural gas.  By focusing on real-time data, the Factbook tracks clean energy investments overtime and the impact of policy decisions on deployment trends and cost reductions.

As the federal government works to balance budget constraints with the need for long-term investment in the energy sector and more resilient infrastructure, the Council will be making the case in 2013 for continued clean energy tax incentives and funding of research, development and deployment.

Clean Energy Industries Focus on Federal Tax Code Review & Reform

Since 1986 - when the U.S. tax code was last reformed - numerous additional and temporary provisions have been added to the code resulting in what many members of Congress believe to be a complicated, unfair means for collecting revenue for the federal government. 

While many observers view accomplishing tax reform during the 113th Congress as a daunting goal, both Houses of Congress are making an attempt at tax reform. The House Ways and Means Committee, chaired by Congressman Dave Camp (R-MI) has established eleven working groups to gather information and feedback from stakeholders, academics, think tanks, practitioners, the general public, and House members, in an effort to produce possible tax reform legislation.  The energy tax working group, chaired by Kevin Brady (R-TX) and Mike Thompson (D-CA), has been meeting over the last couple of months to hear input from various energy stakeholders. The Senate Finance Committee, chaired by Senator Max Baucus (D-MT), is in the process of staff-level discussions on possible tax reform and is preparing a series of white papers.

The Council is a longstanding advocate for the continuation and enhancement of a broad array of clean energy tax measures.  Tax incentives are an important part of U.S. energy policy and have been as effective as any state or federal energy policy mechanism in helping to ensure an adequate, reliable, safe, clean supply of energy resources.

BCSE will submit a written statement to the Ways and Means Committee energy tax working group and to the Senate Finance Committee to convey these views and to urge Congress to continue its long-standing support for a broad array of clean energy tax incentives to spur investment, create jobs and diversify our nation's energy portfolio to power the U.S. economy. BCSE will also schedule outreach meetings in the coming weeks with members of the House Ways and Means Committee and the Senate Finance Committee to share and discuss the BCSE tax statement.

Continued Funding of Department of Energy Programs Critical

Against the backdrop of sequestration, the Council has offered Congress its views on priority areas for federal spending that will advance clean energy deployment and maximize economic paybacks to American taxpayers.  President Obama’s recently announced FY 2014 budget proposal addresses a number of the BCSE's recommendations.

In a letter (April 4) and testimony (March 29) sent to the House Appropriations Committee the Council encouraged Congress to maintain stable and consistent funding in the following areas: energy efficiency, including better building technologies, building codes and standards, industrial technologies, vehicles, and advanced manufacturing; net zero energy building RD&D that optimizes and combines the best high-value energy efficiency and on-site renewable and distributed energy applications, as well as smart-grid software and hardware; the Water Power Program; maintaining a commitment to fund the SunShot Initiative, wind energy research, and research and development for natural gas technology development and improvement; funding for fuel cell and hydrogen technologies; as well as continued funding for the Energy Information Administration.

BCSE Provides Utility Commissioners with Data for Policy Planning

In 2013 state utility regulators are facing a suite of issues, from cyber security to a changing climate to infrastructure resilience, which will impact clean energy industries.  These include:

  • Integrating renewable energy and distributed energy resources – What are the regulatory mechanisms and technologies needed to integrate clean energy resources into the grid in a reliable and cost-effective manner? 
  • The impact of  low natural gas prices – Are energy conservation programs still cost-effective? How  is this determined?

The Business Council for Sustainable Energy continues to engage with state regulators through meetings and events with the National Association of State Regulatory Utility Commissioners (NARUC) in order to provide BCSE members an opportunity to network with commissioners and to share information about their businesses and technologies. Over the course of the next few months, the Council will meet with Commissioners at the June meeting of the Mid-Atlantic Conference of Regulatory Utility Commissioners (MACRUC) and the summer NARUC meeting in Denver to share member views and answers to these questions and the annual NARUC meeting in Orlando in November.

Support Growing for a UN Development Goal on Energy

Governments have been convening around the world this winter to consider the second phase of the United Nation's Millennium Development Goals expected to take effect in 2015.  Related to this effort, BCSE President Lisa Jacobson served as a private sector representative at one of the global consultations on energy in the post-2015 development agenda held in Oslo, Norway in early April. 

Originally adopted over a decade ago, the Millennium Development Goals (MDGs) serve as a benchmark for progress on critical areas to address poverty alleviation and sustainable development.  Energy was not included in the original MDGs due largely to political sensitivities by some governments that did not wish energy policy to be a topic of consideration under the UN purview.  With a broader recognition of energy's direct connection to economic growth, there is growing political support for the topic of energy to have a stand-alone development goal.  The structure of such a goal would likely incorporate the targets within the UN's Sustainable Energy for All (SE4All) initiative. 

SE4All sets out three 2030 targets: ensuring universal access to modern energy services; doubling the global rate of improvement in energy efficiency; and doubling the share of renewable energy in the global energy mix.  These are ambitious and achievable goals, and if adopted, should be accompanied by mechanisms to track performance.  At the Olso meeting, BCSE expressed its support for an energy development goal with measurement indicators and discussed the vital role of the private sector in achieving development objectives. 

Multi-lateral Clean Energy, Climate Forums to Partner with the Private Sector

A recurring theme in recent international forums is that governments can not do “it” alone.  The “it” can vary from mitigating or adapting to climate change, providing energy access or diversifying energy portfolios.  The key challenge is how to leverage, partner and work effectively with the private sector to turn policy goals into deployment results on the ground.

The BCSE works to inject the practical business perspective on finance, technology deployment, innovation and intellectual property rights protection into these  discussions.  The Climate Technology Center & Network (CTC&N) and the Green Climate Fund (GCF) are key institutions under the UN Framework Convention on Climate Change that are making decisions in the first half of 2013 where the input of clean energy industries is essential.  More specifically:

  • The GCF recently met in Berlin and is working to design its Private Sector Facility (a parallel example would be IFC’s relationship to the World Bank) and how private sector expertise can feed into Board decisions. The Council will meet with the US representative to the GCF on April 25
  • The CTC&N will be based in Copenhagen, Denmark and will host its first Advisory Board meeting May 14-15. The “private sector” will have one permanent seat on this Board. UNEP is administering the CTC&N and will be seeking input in how to prioritize developing country requests for clean energy solutions and how to build out the network.
  • The 4th Clean Energy Ministerial (CEM4) will take place April 17-18 in New Delhi, India. The CEM4 will feature public-private roundtable discussions on renewables policy and finance, solar PV, clean vehicles and power markets in emerging economies.  In a recent BCSE meeting with Jonathan Pershing, the new Deputy Assistant Secretary for Policy & International Affairs at DOE, it was noted that the challenge for the relatively young CEF is to scale-up the work of its 13 initiatives and also create more consistent channels for business engagement.

Next, the Council will lead a delegation to the mid-year meeting of the UNFCCC, June 3-14 in Bonn, Germany to participate in the broader discussions on the pathway to a post-2015 climate agreement.