2014: A Positive Sign of What's to Come in Clean Energy

By Cheryl Roberto

The New Year is a time for reflection, beginning with a look back on the previous 12 months and all that they brought. A quick scan of the U.S. climate and energy news in 2014 will tell you it was a very big year.

The Environmental Protection Agency (EPA) proposed the first-ever limits on carbon pollution from power plants, the U.S. and China struck a historic climate deal, and Tesla broke ground in Nevada on the largest advanced automotive-battery factory in the world – a  move that’s expected to slash the cost of lithium ion batteries by a third. At the same time that these important national and international advancements were grabbing headlines, Environmental Defense Fund (EDF) and our partners were working together to incrementally transform the U.S. electricity system by rewriting outdated regulations, spurring energy services markets, and modernizing our century-old electric grid.

The U.S. is on the verge of a revolution in the way we make, move, and use energy. And, having spent years working on governmental and regulatory matters related to our power system and lessening its impact on the environment, I can honestly say there has never been a more exciting time to be in this field. Here are a few of the moments that were near and dear to our hearts over the past year, developments I see as a sure signal 2015 will be another epic year for clean energy.

Modernizing utility business models

Our country’s electricity system has relied on the same business model since the days of Thomas Edison over 100 years ago. While the notion of “gain more customers, sell more electricity” once made sense for electric utilities, it no longer serves our technologically savvy society that increasingly aims to slash both electricity bills and harmful pollution.

That’s why we’re advocating for new business models and regulatory approaches that base utility earnings on performance — including environmental performance — rather than investments in new infrastructure. Utility interests should also be rewarded for enabling clean energy services, instead of simply delivering electricity. This goes hand-in-hand with a broader shift that we’re already beginning to see in the U.S. and around the world, a shift away from centralized fossil fuel-powered energy to a system that wastes less energy through efficiency, integrates more renewables like wind and solar, and customizes offerings to involve and empower people to take control over their own energy use.

Last spring, the state of New York courageously opened the Reforming the Energy Vision (REV) proceeding to overhaul and modernize the state’s utility business model. REV is a bold step and an exciting opportunity for achieving transformational change in the electricity system. As the proceeding continues and New York adopts smarter policies and grid modernization efforts, the state can serve as an example to others looking to upgrade.

Making the grid more resilient and less wasteful

In addition to revamping utility business models, we are working to ensure our existing grid and electricity infrastructure is performing at the highest level. Fortunately, the same clean energy investments that deliver a more efficient grid can also deliver greater resilience, reliability, and a more nimble distribution system – a key ingredient for incorporating renewable energy.

In 2014, the state of Illinois went a long way toward enhancing grid performance. One of the state’s largest utilities, Commonwealth Edison (ComEd), proposed to accelerate its smart grid deployment plan by three years, giving customers faster access to time-based electricity rate plans and resulting in lower energy costs and cleaner air. On the energy storage front, Northern Illinois will soon be home to North America’s largest battery project.

New Jersey also joined Illinois as a state making smart grid strides. New Jersey received over $400 million in federal funding to develop the NJ TransitGrid into a first-of-its-kind microgrid capable of keeping the power running when the electric grid goes down. Other exciting news came on October 23rd when the New Jersey Office of Clean Energy released a first-of-its-kind solicitation for a $3 million dollar Renewable Energy Storage Program.

Finally, on a national level, clean energy advocates were very pleased when the Federal Energy Regulatory Commission (FERC) upheld Order 1000, confirming what many think is common sense: Because the power grid crosses state and utility boundaries, a coordinated approach to electricity transmission planning (that is, moving electricity from power plant to power plug) is more efficient and cost effective than multiple entities planning in isolation.

Empowering customers to choose clean energy

While the environmental benefits of updating our electricity system and cutting carbon emissions are clear, there are also economic advantages. EDF is working to ensure customers are rewarded for choosing clean energy options.

For example, smart meters (which provide detailed electricity use data throughout the day) have many uses: from helping utilities avoid unnecessary service calls to helping customers reduce electricity use during periods of high energy demand. Yet, not all households have easy access to the energy data provided by smart meters to control their energy use and reduce electricity bills. That’s why EDF and Citizens Utility Board (CUB) joined forces to develop the Open Data Access Framework. This platform ensures customers own their own electricity data while also providing important insight into their electricity consumption (how much they are using and when). It could also help unleash the potential of new services and gadgets – like the NEST learning thermostat – that help people better understand and manage their energy use.

Demand response also places people in the driver’s seat. This energy conservation tool – which pays people and businesses to save or shift energy use when the power grid is stressed and  cleaner, renewable resources are available – received a huge vote of confidence when EDF-sponsored  Senate Bill 1414 unanimously passed the California House and Senate and was then signed into law by Governor Brown in September.

Unleashing the power of private capital

Updating our grid and increasing the adoption of new, clean energy technologies will require private capital. In 2014, we saw great strides toward the introduction and acceleration of financial tools that reduce the risk of clean energy investments and help avoid high upfront costs of energy improvements.

Initiatives like EDF’s Investor Confidence Project (ICP) are accelerating the development of a global energy efficiency market by standardizing how energy efficiency projects are developed and energy savings are calculated. In 2014, ICP protocols were embraced by state, national, and global leaders alike. ICP’s energy efficiency protocols were adopted in Texas as part of a do-it-yourself toolkit for using PACE (Property-Assessed Clean Energy) – called PACE-In-a-Box – that enables local governments to use their property assessment as a way to finance clean energy projects for industrial, agriculture, water, and commercial buildings. EDF also launched ICP in Europe last year and we’re in ongoing discussions with key state officials across the country – from California to New Jersey and New York – who are exploring the integration of ICP into their energy efficiency programs. 2014 was a big year for ICP, and now, with a robust third-party credentialing system for energy efficiency projects, we expect to see even bigger wins in 2015.

Growth in the use of private capital for clean energy was seen in multiple developments along the east coast. In New York City, the mayor announced the retrofit accelerator program, a promising expansion of the successful EDF-NYC Clean Heat model that will help thousands of buildings in the city invest in energy efficiency. In North Carolina, a rural electric cooperative received funds from a new United States Department of Agriculture on-bill finance program to allow customers to pay for energy improvements through a monthly service charge on their utility bills – which is offset by savings from energy efficiency. Finally, EDF co-hosted a successful, first-of-its-kind Resilience Finance Symposium in New Jersey to discuss the progress the state has made toward improving its energy infrastructure in the two years since Superstorm Sandy.

Partnering with clean energy champions

Of course, the clean energy future won’t be achieved by a single group or effort. To that end, EDF is aligning and leveraging actions of others in this space, and finding new partners to act.

One valuable partnership gained in 2014 was Operation Free, a clean energy coalition of 5,000 veterans and national security experts, seeking to fight climate threats by tapping into the unique qualifications of veterans. Former service members are encouraged to draw upon their experience to educate and mobilize their communities around climate security, including drafting energy legislation and on-the-ground advocacy for clean energy policies. These policies not only help support military readiness, but can also help the Defense Department meet its tough sustainability goals, such as reducing greenhouse gas emissions from certain sources by 34 percent by 2020.

Each new year welcomes great opportunity, hope, and optimism for what lies ahead. The Clean Energy team at EDF looks forward to embarking on a bold, new adventure in 2015 pushing for unconventional strategies that get more clean technology into the electricity market at scale and also prove that innovative, market-based, clean energy solutions can work for businesses, people, and the environment.