Energy: A retrospective
By Julia Rotondo and Daniel Hill When discussing the impact of federal policy on clean energy deployment last week, Ali Zaidi pointed to the massive changes seen in the industry compared to ten years ago. Serving as the Associate Director for Natural Resources, Energy, and Science at the Office of Management and Budget (and doing so as a 30-something year old), Mr. Zaidi shared an anecdote when he had previously heard questions about being so young in dealing with an industry that has been around for so long and so entrenched in its ways. But to Mr. Zaidi, energy is an ever changing landscape, one that requires attention more than memory. Through an engaging discussion, Ali shared some examples of assumptions made about clean energy ten years ago that have since become false.
From Imports to Exports
Attitudes towards energy ten years ago, he argued, were focused around the idea of needing to import ever higher quantities of gas and oil to fulfill America’s energy need. However, with the discovery of new fossil fuel extraction methods combined with federal investment in clean energy technology deployment, we are now living in a world with fossil fuel exports and clean energy becoming increasingly more affordable. Below, we examine these factors in greater depth to explore what the next ten years might in clean energy.
The discovery of new and plentiful oil and gas reserves within American territory – alongside the deployment of improved extraction technologies – changed America from a net fossil fuel importer to one that now considering exporting crude oil.
The Source of Power
In addition to having an impact on America’s international energy posture, the discovery of new natural gas reserves in the last ten years has fundamentally changed its domestic energy production sources. Historically, coal has been the dominant source of US electricity over the last 100 years. Over the last ten years, however, natural gas and renewable energy have started to make up a more significant percentage of total US electricity production.
According to the EIA, as of 2013 approximately 10% of total U.S. energy consumption and 13% of electricity comes from renewable sources of energy. Of that figure, slightly more than half is produced from conventional hydropower. Solar and wind energy, newer sources of reliable energy production, have only started to generate significant contributes to US electricity in the last ten years. As seen below, energy from non-hydropower sources of renewable energy has almost quadrupled since 1990 – with the majority of progress made in the last five years.
The rapid rise of renewable energy can be attributed to federal and state policies that incentivize deployment, specifically federal financial incentives and state renewable portfolio standards. As Zaidi discussed last week, the American Recovery and Reinvestment Act of 2009 (ARRA) provided multiple federal financial incentives for the deployment of clean energy, including loan guarantees, the extension of federal tax incentives for wind and solar, and grants. Grants went towards new technology development, energy efficiency programs, efficient appliance rebates, and to advanced energy manufacturers.
Energy Efficiency 1.0 2.0
Ten years ago, energy efficiency meant stopping vampires from stealing our energy and watching pieces of paper flutter when we held them up to window frames. Energy efficiency was primarily seen as a manual process with tangible actions – to unplug, seal up, and switch out. A lot has changed since then.
Energy efficiency has become more automated, more sophisticated, and much smarter with the rapid development of new software technologies and monitoring capabilities. The “smart meter” has allowed companies, such as Opower, to deliver greater insight and understanding into how we’re using energy in our homes and buildings. And now instead of holding a piece of paper up to guess where the energy is being lost, we can better measure where we’re wasting energy so that we can better manage our energy usage.
Ten years ago (and even further back then that), people were told that energy efficiency meant turning their thermostat back a couple degrees when they left the house. But now, technology is doing it all for us. Smart home technologies, such as Nest thermostats, and the rise of The Internet of Things, now allows our homes’ to use energy more efficiently without having to be told or manually adjusted. For example, smart thermostats can now integrate with home wifi connections and smartphone gps to automatically adjust things like temperature settings and lighting based on a person’s proximity from their front door.
The Next Decade
As Mr. Zaidi reminded us last week of just how far the clean energy industry has come in the past ten years, it makes us all wonder, what will the next decade look like? With the rapid developments of more advanced resource extraction methods, emerging financial models to finance market-ready renewable projects, and smarter technologies to better measure and manage our energy usage, it’s difficult to say for sure. But Mr. Zaidi did pass on one certainty, that no matter what assumptions we make today, innovative ideas and solutions will come from this and the next generation of clean energy leaders.