America’s Power Plan: a Blueprint for the Nation | Article

The Energy Foundation and Energy Innovation Policy and Technology LLP have released America's Power Plan , a series of white papers making policy recommendations to assist the transition to a clean energy economy. Over 150 top experts from the industrial, utility, regulatory, non-profit and academic sectors were involved in drafting the wide-ranging report. It covers power markets, utility business models, finance policy, distributed energy resources, distributed generation policy, ‎transmission policy and the siting of new power infrastructure. In essence, it asserts that America's transition to clean energy is being held up not by the technology, which has proven itself, but by century-old economic, legal, and regulatory structures that need to be changed. According to the authors, "New technologies require new rules — new business models, new market designs, and new regulations — that foster innovation instead of stifling it."

Renewable energy production is accelerating rapidly. Over the past five years, solar energy prices have fallen by 80 percent, and wind energy prices by 30 percent. In 2012, renewable energy accounted for half of all the new generating capacity installed in the United States. But though cost barriers have largely been tackled thanks to better technology, regulatory barriers still remain. The report argues that it is critical to engage in institutional reforms.

The report's authors do not advocate a "one-size-fits-all" approach, but offer a toolkit that policymakers can use as inspiration. Some of their principal recommendations are:

Use performance-based regulation that gives utilities the freedom to innovate.
Separate the financial health of the utility from the volume of electricity it sells.
Create investor certainty and low-cost financing for renewable energy.
Encourage distributed generation by acknowledging customers’ right to generate their own energy, by charging them a fair price for grid services, and by paying them a fair price for the grid benefits they create.
Open long-term markets for new services such as fast-start or fast-ramping.
Mitigate investor risk by adopting stable, long-term policies and regulations with low impact on the public budget.
Reduce siting conflicts by using explicit, pre-set criteria and engaging stakeholders early.

Among the report's key recommendations is the need for a "one-‎stop-shopping approach to siting." Currently, siting is fraught with challenges, as several overlapping – and sometimes even conflicting – permitting processes come into play. While progress has been made at the federal level with the creation of the Rapid Response Team for Transmission in 2009, much still needs to be done at the state level.

The report notes it is often possible to circumvent the siting issue since the efficiency and effectiveness of the existing grid has yet to be maximized, through energy efficiency improvements, demand response and distributed generation. Upgrading the lines in existing corridors can also forestall the need to create new corridors in some situations.