October 11, 2010
Bingaman Leads Last Ditch Effort for Clean Energy Progress
As time runs out in the 111th Congress, at least one senator is working hard to secure bipartisan support for key energy policies that could provide a boost to U.S. clean energy companies at a time of increasingly fierce competition.
Monday, on the pages of Politico, Senator Jeff Bingaman (D-NM), made an impassioned plea to his Congressional colleagues to enact legislation to create a new Clean Energy Deployment Administration (CEDA) to accelerate the commercialization of innovative clean energy technologies. He is also spearheading a last ditch effort to pass a national renewable electricity standard (RES) to help build a domestic clean energy market.
Progress on these key bipartisan measures was held up by months of debate over cap and trade legislation that ultimately failed in the Senate, but there is still a little time to score a last-minute clean energy victory this year.
CEDA originally passed on a bipartisan vote out of the Senate Energy Committee last year with support from Republicans Lisa Murkowski (AK), Sam Brownback (KS), Bob Corker (TN) and Jeff Sessions (AL). Much like a bank, the proposed agency would utilize a suite of flexible credit enhancement tools, including loan guarantees, securitization, and insurance, that would reduce risk for investors in cutting-edge clean energy technologies. The agency could be a critical piece of the national energy innovation system, helping innovative clean technologies secure private financing and cross the challenging "valley of death" into commercial production and use. More than just a "green bank," CEDA would explicitly rationalize clean energy deployment as part of the innovation process, and would fund innovative technologies with the explicit goal of improving their performance and reducing their unsubsidized costs.
And although most independent analyses show that the proposed RES would not guarantee new renewable energy deployment above business-as-usual forecasts, enacting an RES would provide a solid floor for the renewable industry, and provide at least some long-term direction that many in the industry are asking for right now. Furthermore, there is certainly precedent for strengthening renewable electricity standards after enactment, as many states have already done.
Current federal efforts to help move innovative clean technologies toward commercialization have been inconsistent. Congress appropriated $6 billion in loan guarantees for innovative energy technology projects as part of the stimulus, but more than half was raided for unrelated programs and the rest has been tied up "by a dysfunctional bureaucratic system, centered at the Office of Management and Budget," according to Bingaman. The two problems are not unrelated. Unable to get money out the door and effectively spur innovative energy technologies, the DOE loan guarantee program has become a target for repeated raids by Congressional policymakers looking for easy budget offsets in an era of increasing fiscal austerity.
With U.S. credit markets still on shaky ground, and the federal government unable to nimbly and effectively offer credit and financing support through the troubled DOE loan guarantee program, clean tech firms have found it far easier to attract capital in other countries, particularly China, where banks come to them to offer low-cost loans and other incentives.
If the United States does not find a way to sustain critical investments in clean energy technologies as funds from the stimulus program expire, American clean energy markets may bust, and innovative U.S. firms may have little choice but to close up shop or seek refuge in more hospitable markets overseas. The economic stakes are high, warned the Senator:
"Rapid progress is being made by China, as well as by our more traditional international competitors: Japan, South Korea and the European Union. They all are putting people to work today and improving their industrial base to seize the substantial economic opportunities that clean energy offers."
The Senator also notes, as the Breakthrough Institute has argued, that it's not just current jobs but future industries that are at stake:
"The United States may still have the world's strongest R&D pipeline for new technologies and an extremely robust entrepreneurial culture to support new ventures. Yet the fact that leading U.S. clean technology companies are building manufacturing and R&D centers in China, rather than in the United States, is a troubling sign that we could lose our lead."
It's clear that Senator Bingaman understands the competitiveness challenges that the United States faces today, which were documented in a November 2009 Breakthrough Institute/Information Technology and Innovation Foundation report, "Rising Tigers, Sleeping Giant." The report was released at an event hosted by Senator Bingaman's energy committee staff.
Accelerating demand for clean energy technologies through policies like CEDA and an RES--along with greater support for energy R&D and domestic clean energy manufacturing--are three key pieces of a comprehensive clean energy competitiveness strategy that can help America regain leadership in the global clean energy industry.
While much more remains to be done, under the leadership of public officials like Senator Bingaman, America may have one last chance to salvage some semblance of clean energy progress before the time runs out.