It's energy democracy, not energy independence, stupid
President Barack Obama no longer has to personally worry about election results, giving him a bit more leeway in negotiations. But as his State of the Union speech last night indicated, Americans are still not talking about the one-time opportunity that switching to renewables offers: citizen ownership of power production.
America is finally able to sell itself as a leader in reducing carbon emissions and transitioning to clean energy – at least, that's the tenor not only in the President's speech, but also in reactions leading up to it. For instance, blogger John Hanger (hereby highly recommended) published a list of 10 energy facts just before SOTU under the title "The state of our energy union is stronger than in 40 years."
Almost all indicators seem to point in the right direction. Solar boomed last year, as did installed wind capacity, and the country is switching from coal to gas, thereby lowering its carbon emissions. Americans are also – finally – buying more fuel-efficient cars.
But scratch below the surface, and the picture becomes less black and white. First, it remains to be seen whether the trend towards fuel economy in vehicles will be long-lived. Should the US economy strengthen, the US has no carbon tax on gasoline to encourage average Americans to keep an eye on fuel consumption. If disposable income increases, Americans could just as easily decide that their fuel-efficient cars allow them to drive more on the same tank.
Admittedly, the price of natural gas is probably the lowest internationally in the US right now thanks to hydraulic fracking, though the United States is looking into ways of exporting all of this shale gas it is currently producing. Add on coal exports, and it seems that the United States is currently reducing its emissions at home while selling its carbon-intensive resources abroad.
In other words, the focus on energy independence is leading America to get more carbon out of the ground, not leave more in. And once a natural gas export infrastructure has been set up, Americans will realize that internationally traded gas works very much the same as international oil markets; after all, the oil boom in the states may have made the US less dependent on oil imports, but it has not lowered the price of gasoline at the pump for Americans, as Brad recently pointed out at the Washington Post. Americans would then be paying roughly the same price for gasoline and natural gas, while big business reaps profits selling more carbon to the world.
The solar and wind boom are, of course, good news, but, going forward, policy support remains fickle, with the wind sector in particular expected to shrink dramatically in 2013, possibly from 13 gigawatts last year to around five. Growth is still expected in the solar sector, but the industry is only large in absolute terms, not in terms of the impact on the grid. The roughly 3 gigawatts of solar installed last year makes the US an international player (though far behind Germany's average of 7.5 gigawatts annually over the past three years), but the cumulative solar capacity of around seven gigawatts is still only equivalent to roughly 1 percent of peak summer power demand, whereas Germany's 32.4 gigawatts of PV is around 50 percent of the country's peak summer power demand.
The difference is tremendous in terms of further growth. Obama spoke last night of driving down the cost of solar, but the US generally does so in government grants for research. Europe brought down the cost of solar through deployment. It is therefore disappointing to hear Obama say, "my administration will keep cutting red tape and speeding up… permits" when that ellipsis covers oil and gas. When will the US focus on cutting red tape for solar, such as by switching to German-style feed-in tariffs? As the US Lawrence Berkeley Lab showed just a few days ago in an update of its study, an installed solar array in Germany still costs roughly half as much as in the US (PDF).
Right now, solar still offsets more expensive peak power plants in most of the US, but when solar power starts cutting into the medium load and, eventually, the baseload as it is doing in Germany, it starts making conventional power providers fight for their bottom line. If you think the battle for solar was tough up to now, wait until such investments start making large corporations less profitable.
Which brings us to the final aspect that almost no one in America talks about and which Obama did not mention himself last night either: community ownership. Americans do not need to require their utilities to get a certain share of green power. Germans are making this power themselves. If the US continues to build up its renewable energy infrastructure in the hands of large corporations, it will miss an opportunity to democratize energy production. So we need to move beyond talk of energy independence and focus on energy democracy. (Craig Morris)