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Deep Thoughts From Our New Energy Regulator

Kate Galbraith reports that Obama has tapped Jon Wellinghoff to head up the Federal Energy Regulatory Commission, which oversees wholesale electricity markets, interstate transmission, natural-gas pricing, and oil-pipeline rates. The betting line is that Wellinghoff will push FERC to pay more attention to energy efficiency and distributed generation. It's also worth reading an entry he wrote in a National Journal roundtable last October about whether the economic slump would kill off the push for alternative energy. First, a bit about why he's (relatively) bearish on nuclear and coal plants that sequester their carbon:

[T]here is unlikely to be funding available in the foreseeable future for these technologies regardless of the condition of the economy given the costs and risks associated [with] such ideas unless there are substantial federal subsidies and some certainty regarding carbon regulation. With respect to nuclear power plant investments one CEO of a large electric utility seeking to construct new nuclear facilities recently stated…"I can not find anyone in their right mind that will give me a fixed price contract to build a new nuclear plant that I can afford." On the clean coal side the International Energy Agency recently released a report that concluded "…investment in [carbon capture and storage (CCS)] will only occur if there are suitable financial incentives and/or regulatory mandates," adding that "market mechanisms alone will not be sufficient."

But all is not bleak for energy infrastructure expansion. Solar and wind projects are currently being financed and built as are other types of distributed renewable generation. True, financing even in the renewable sector seems to be slowing. But as indicated by other comments wind projects pose less risk than large central station plants and are often supported by contracts under state renewable portfolio standards.

Meanwhile, here are his thoughts on how the United States could keep energy consumption flat over the next 22 years.

With that background the premise of the question that the nation will need 30% more energy by 2030 should be examined. A number of comments indicate that significant energy will be required in the future. That may be true. But even accepting that assumption few comments suggest improvements in energy productivity will play a significant role in offsetting that energy growth.

Google has recently release a national energy plan that, in part, proposes to improve energy productivity by 30% by 2030.* Offsetting the EIA projected 30% increase in energy use by increasing energy productivity by 30% would mean that energy usage would be held flat over the next 22 years. Energy productivity improving technologies- energy efficiency, demand response, combined heat and power systems and waste heat recovery technologies- are generally the cheapest, fastest, and most cost effective strategies to implement. …

This appears to be particularly true given recent advancements in LED technology that will have significant implications for improving energy productivity in everything from digital televisions and computers to lighting. In addition, the nation’s organized wholesale electric markets are seeing an array of new companies assist in delivering rapidly expanding customer demand response, both lowering customer participant bills and at the same time lowering energy costs in those markets for all consumers. Further, significant efforts are underway to improve productivity on the grid side of the meter through the installation of advanced transmission sensing technologies, energy storage systems including flywheels, batteries, and plug-in hybrid electric vehicles, and the implementation of grid optimization algorithms to improve grid operation. ... The Google plan is well documented and supported by substantial research. It deserves serious consideration.

Here, by the way, is the Google energy plan he's touting.

--Bradford Plumer