Clean Energy Debate Hurdles Facing U.S. and Arizona

Irish Renewable Energy Summit Clean Energy Debate Hurdles Facing U.S. and Arizona

In a 5-4 decision, the Supreme Court of the United States recentlyoverturned campaign finance laws.

This encourages more direct spendingby corporations, unions and other special interest groups, andcomplicates the clean energy debate facing the U.S. The Supreme Courtruling removes restrictions for federal campaign financing from thesespecial interest groups and gives them the same rights to freedom ofspeech as citizens. According to a Needham & Co. estimate, $2.8billion will be spent on issue-oriented influence or lobbying in theU.S. this year.

Although this may be a boom for corporations, marketers and mediaagencies, the decision will tilt the balance of power in formulatingnew legislation. The results of massive spending and its impact on thehealth care debate have been obvious. The Washington Post reported thatcorporations spent an average $1.4 million per day to stall thePresident’s health care legislation, which is still being dragged outin Congressional events such as today’s Health Care Caucus. Constantstalemates supported by wealthy incumbent corporations in power overthe status quo will lessen the possibility for change on many issuesacross the board including climate change and the development of a clean energy economy.

Public debates have already been confused by misinformation on healthcare and other major issues such as clean energy, and the politicalculture will be even more distorted by corporate spending in thefuture. Under the new ruling, facts will be lost to an even higherdegree through a plethora of false television advertisements andlobbyist events to protect future profits and market share. Therefore,with unlimited spending on major policy issues, misinformationcampaigns by Big Oil, Big Coal and other special interests will be evenmore aggressive, potentially brainwashing the public who may haveinitially favored clean energy and carbon emissions reduction policies.

In the case of renewable energy development, the Recovery Act has beenan obvious boost; however, stimulus funding is essentially a temporarylift to an industry that requires substantial long-term legislativesupport to overcome the even more powerful entrenched fossil fuelindustry. The reports that the joint DOE/Treasury grants in lieu of tax credit program implemented last year under the Recovery Act may end too soon to benefit some planned solar plants.In many cases, construction must be started this year in order tobenefit from the program, which is a stiff challenge for solar projectsthat have been delayed due to permitting issues for large-scale capitalprojects and transmission,especially for ones on federal land. The solar industry has askedCongress to extend the deadline to begin construction beyond 2010, butan extension may not be forthcoming.

Part of the current problem for renewable energy deployment in the U.S. is lack of national renewable portfolio standard(RPS), as in many other countries, requiring Congressional approval,especially one linked to a greenhouse gas emissions cap-and-tradesystem. Global companies and outside investors cannot be expected tokeep up with emerging policies for 50 different states without anynational standard, where one state has a mandate or simply a goal of 15percent renewable energy by 2015 and its neighboring state has a higherpercentage, including differing energy sources, or no requirement atall. The lack of a consistent national RPS policy complicatesinvestment and deployment strategies and lessens the overall visibilityof an eventual market opportunity.

Furthermore, without a national RPS there will be imbalanced market andoverall less growth in the renewable energy sector, since many stateswill not have a major incentive to match surrounding states or theability to overcome wealthy fossil fuel lobbyist organizations.However, if a national RPS or cap-and-trade system is ever enacted, thestates which fell behind the curve and never progressed in building aclean energy infrastructure and accompanying power grid system or smart grid,will lack the know-how and have a mountain to climb, as their utilitiesmay be forced to purchase specific renewable energy at a premium fromout-of-state power providers, driving up the cost for all energy users.What’s more, states without state RPS mandates will lose out on thesynergistic spillover effect that clean energy deployment has, which isthe attraction of the supply chain (jobs) to the customer base, as in the case of solar manufacturing operations opening up in California- a state with the most aggressive state RPS in the country.

Arizona has a mandate requiring 15 percent of its energy to begenerated from renewables by 2025, which is moderate compared to about29 other states with requirements. However, its House Committee voted5-2 to overturn the state’s renewable energy mandate this week. Thebill that came out of committee, House Bill 2701, will be presented tothe full House and is designed to strip regulators of their authorityto impose renewable energy mandates; thus, potentially letting thestatus quo to remain intact where nearly half of its power is derivedfrom coal. The bill lumps nuclear power in with renewable resources andprohibits any utility from being forced to purchase alternative energy.The National Renewable Energy Lab has conducted numerous studiesshowing that Arizona has the highest solar availability (potential) inthe country, making the sun ones its valuable resources, including thetourism and snow bird benefit, similar to the abundance of oil in Texas.

After Arizona finally was able to attract a major solar manufacturer tothe Phoenix area for the first time in its history, after passingrelated incentive legislation, and its governor, Jan Brewer, touted the state as the next “solar capital of the world,” solar energy giant SunTech Power Holdings,based in China, is now reconsidering its plan to build its plant inGoodyear, AZ if the bill is passed, according to the Phoenix BusinessJournal. And that could be how the cookie crumbles, as the state andthe country as a whole, drowns in debt and economic woes without beingable to see the promise of future economic growth.

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