WHY NEW ENERGY INCENTIVES

U.S. in danger of losing the clean energy race
Lewis Hay (Chair/CEO, FPL Group – a top 5 U.S. utility & the biggest U.S. producer of New Energy), May 12, 2010 (The Hill)

"Last year, for the first time ever, China built more wind farms than the United States. Here in our home market, three of the top five wind energy producers are European…The United States hasn’t lost the clean energy race, but we’re falling further behind. The question is what we’re going to do about it.

"So far, the answer is not much…[T]he United States has no price on greenhouse gas emissions, no national renewable energy standard and no transmission superhighway to carry renewable energy to population centers…The policies we have in place in the United States today are still incredibly pro-carbon. If nothing else, perhaps the gulf oil spill will remind us that fossil fuels can appear cheap but have high social costs that are seldom reflected in the price."

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"The simple fact is that clean and renewable energy do not compete on a level playing field with fossil fuels, and [won’t] until we put a policy framework in place to enable them to do…First, we need a price on carbon. Only with the proper economic signals in the marketplace can we build a world-class clean energy industry…Right now, carbon is not priced, which makes fossil fuel generation look artificially cheap. With a gradually escalating price on carbon that reflects the full social costs of burning fossil fuels, low-emissions fuel sources can compete on fair terms…

"Second, we need a national Renewable Energy Standard (RES). Even if Congress acts to put a price on carbon, it will be many years before the price rises to a level sufficient to enable clean energy to deploy on its own. An RES that requires power producers to get a certain percentage of their electricity from renewable sources is the necessary bridge…"

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"Third, we need a stronger federal role in ensuring high-voltage transmission lines are built. Renewable energy is most abundant on wind-swept plains and sun-baked deserts, but it takes transmission lines to transport it to the nation’s cities. We need legislation to give the federal government siting authority for electric transmission, just as it has for other critical national infrastructure such as railroads, interstate highways and natural gas pipelines. And the Federal Energy Regulatory Commission should use the authority it already has to ensure the cost of building new transmission lines is shared broadly and fairly…

"…[T]he energy and climate legislation being crafted by Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) will move us in the right direction…Clean energy companies are not asking for the kinds of subsidies that have been used in Europe and China…[just] that carbon carry a price equal to its cost to society, that we guarantee a market for renewables until that price phases in and that we make transporting clean energy…a national priority…As a nation, we need to decide what we want our energy future to look like…[or] we will have lost the clean energy race for good."