Lisa Jacobson, president of the Business Council for Sustainable Energy, talks about the key findings in the 2014 edition of the “Sustainable Energy in America Factbook,” which the Council produced in collaboration with Bloomberg New Energy Finance, a subsidiary of Bloomberg BNA's parent company, Bloomberg LP. The Factbook, which was released earlier this year, is intended to “arm policymakers, journalists and industry professionals with up-to-date, accurate market information.”
The Business Council for Sustainable Energy is a coalition of companies and trade associations from the energy efficiency, natural gas and renewable energy sectors. Members also include independent electric power producers, investor-owned utilities, public power utilities, commercial end-users, project developers and service providers for energy and environmental markets.
The interview, conducted over the phone, has been edited for brevity and clarity.
BBNA: According to the Factbook, U.S. renewable energy generation increased to 13 percent of total energy generation in 2013, and the cost of clean energy has “reached all-time lows.” To what do you attribute the increase in renewable energy use at lower costs?
Jacobson: If you look back over the past several years—from 2007 to 2013—renewables, including large hydropower, grew from 8 percent to 13 percent of the U.S. energy generation mix, which is a big change, much bigger than people had anticipated even a few years ago. When you look at the costs of the actual technologies—for example, we're seeing significant cost reductions in solar PV [photovoltaic] panels and capacity improvements for wind turbines over that same time period. Of note, wind power purchase agreements in many parts of the country are becoming more cost competitive. These changes are due to a sustained commitment to research and development, established policy frameworks at the state and federal level and new financing models for utility–scale and distributed generation deployment of renewable energy.
BBNA: The Factbook also reports that U.S. energy consumption in 2013 was 5 percent below 2007 levels. What are the factors you see contributing to this downward trend, and do you see it continuing?
Jacobson: I think the big story is that we are experiencing a decoupling between economic growth and energy use. U.S. energy use has declined while our national GDP [gross domestic product] has increased. We can deploy cleaner energy technologies, increase our energy productivity, reduce harmful emissions and grow the economy. The view of our industries is that this trend will continue. We are making significant strides with regard to fleet efficiency in the transportation sector, industrial efficiency for the manufacturing sector, and we're improving the efficiency of buildings. The Factbook takes a deeper look at demand-side and supply-side energy efficiency across these sectors.
BBNA: What are the trends/numbers concerning natural gas?
Jacobson: If you looked over the last several years, we're seeing significant and sustained changes in the natural gas industry. Currently, natural gas consumption and production are at all-time highs, and prices are relatively low. A few years ago the discussion would have been about high prices and price volatility concerns. Now the market is looking at natural gas as a foundation fuel for the long term at more stable prices. The Factbook talks about how this dynamic is impacting the manufacturing sector in the United States. We're seeing jobs in domestic manufacturing coming back to the U.S., in particular in chemicals and in other energy-intensive industries.
BBNA: Can you talk about trends in the transportation sector?
Jacobson: There is a growing uptick in public acceptance of alternative-fuel vehicles. We are seeing increased sales in hundreds of thousands of hybrids and, to a lesser extent, the plug-in hybrids and the total battery electric vehicles. Natural gas transportation applications are continuing to grow as well, with buses and large fleets as a primary opportunity. This is an area where consumers are looking for an opportunity to reduce costs and emissions by using cleaner-burning fuel.
BBNA: How have these trends helped the U.S. meet President Barack Obama's goal of a 17 percent reduction in greenhouse gas emissions by 2020, relative to 2005 levels?
Jacobson: When we looked at the data for 2013, we saw that the U.S. is more than halfway to meeting the 17 percent reduction goal. This was something that many thought was not possible when the commitment was made in Copenhagen in 2009. The country is on the right track, due both to market dynamics and a suite of policy frameworks that focus on the environmental attributes of a range of energy applications in transportation, power generation and the industrial sectors. As I mentioned earlier, the cost of clean energy technologies is coming down, making them more cost-competitive, and the public is becoming more aware of what is possible. Investors share this perspective too—over the last several years investment figures have been in the range of hundreds of billions of dollars, signaling that this is a vibrant and growing industry. For example, in 2013, BNEF's NEX index, a global index of publicly traded companies active in renewables and low-carbon energy, grew 53.9 percent, far outpacing the gains of roughly 30 percent in the S&P [Standard & Poor's] and 26.5 percent for Dow Jones. So where's the market and smart money going? It's going into clean tech. That's what makes me feel confident that we can continue to make progress toward the president's goal.
BBNA: What's happening at the state level in terms of energy efficiency resource standards?
Jacobson: We're at a time of very rapid and significant change in the energy sector. This change is happening unevenly in different parts of the country, due to differences in resource availability, energy policies and market dynamics. A primary concern across the country is how to ensure energy reliability and affordability for consumers and businesses and policies like energy efficiency resource standards and other clean energy policies are being considered in this context.
BBNA: What are some of the bright spots for renewable energy investment?
Jacobson: I think the bright spot for renewables is that there are so many choices that exist today and many are becoming more affordable and cost-competitive with traditional energy sources. Options such as geothermal and waste-to-energy can provide baseload electricity. Other renewables can be used in partnership to optimize conventional power plants. The Factbook examines the range of renewable technology options that are being deployed in the U.S., and in particular, this year's edition puts a spotlight on the critical role that consistent policy frameworks play in spurring investment.
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