Federal Energy Regulatory Commission (FERC) chairman Jon Wellinghoff wants to promote energy efficiency and the use of more renewable energy, and he is rousing controversy with statements like “the United States may never need another nuclear or coal plant.”  Personally, I don’t want to see another coal or nuclear power plant constructed, but chairman Wellinghoff’s energy policy has to overcome certain challenges, and a new energy policy for the United States will require both innovation and political will.

Certainly, this change in energy policy will take massive restructuring and new infrastructure in order to use renewable energy such as wind and solar to meet baseload demand (and some energy analysts do not believe this is possible). Baseload demand refers to “the minimum amount of power that a utility or distribution company must make available to its customers, or the amount of power required to meet minimum demands based on reasonable expectations of customer requirements.” Currently, baseload demand is met primarily by coal and nuclear power plants, and it can be supplemented by peakers, which are “small plants that typically run on natural gas or diesel oil and produce between 5 and 50 megawatts (MW) . . . [while] baseload plants produce upwards of 1,000 MW. A MW of electricity is equivalent to the electricity for between 800 and 1,000 homes, depending upon their size.” Consequently, peakers are important because they “can react quickly to changes in demand and provide power to supplement that generated by base load stations.” Some renewable energy enthusiasts believe that “peakers can be replaced by solar power plants.”

In order to integrate more renewable energy into the power grid faster, the U.S. government can look to the European experience with renewables, since Europe has aggressively accepted renewables such as wind and solar. It doesn’t hurt having an open minded and progressive U.S. president either, since President Barack Obama recently announced, “Through the Department of Interior, we are establishing a program to authorize — for the first time — the leasing of federal waters for projects to generate electricity from wind as well as from ocean currents and other renewable sources.”

Another issue that must be overcome is a side effect created by an energy policy that is dominated by energy efficiency and the use of renewable energy—decreasing profits for public utilities, since energy efficiency results in lower energy bills. No doubt passing reasonable costs off to the consumer and changing business plans can alleviate this side effect.

Furthermore, in order to create a more efficient and uniform policy in getting renewable energy to homes, the federal government wants jurisdiction over transmission line siting (currently it’s with the states), but the “Fourth U.S. Circuit Court of Appeals [recently] ruled that the 2005 Energy Policy Act does not give FERC the authority to overrule states on transmission line siting.” However, “a new draft bill unveiled by Senate Energy and Natural Resources Committee majority staff yesterday would grant states first crack at siting ‘high priority’ national transmission line before allowing federal siting authority.” From The New York Times:

Wellinghoff’s comments last week drew praise from environmentalists but jarred the energy and nuclear industries. He said today that he hasn’t gotten a lot of feedback from industry or from top Obama administration officials about his remarks.

“There’s been a lot of positive comments with respect to the issues of increasing efficiency,” he said. “That’s the key that people seem to respond to.”

He said the biggest challenge to implementing his vision is transmission and “ensuring we have a transmission plan that covers … both the Eastern and Western interconnects.” The country needs to design the system in a way that will allow the delivery of low-cost renewables, such as wind, solar and geothermal, he added.

Not everyone agrees with Wellinghoff’s vision. Jerry Taylor, an energy expert at the libertarian Cato Institute, said he first paid attention to Wellinghoff when the chairman outlined his priorities earlier this month.

His belief that renewables like wind, solar and biomass will provide enough energy to meet baseload capacity and future energy demands and that baseload capacity is going to become an anachronism “struck me as crazy,” Taylor said.

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“The idea that half our energy will come from renewable fuels, not new plants … I think is just implausible,” Taylor said. “We hear over-the-top claims and statements about renewable energy on a near-daily basis, so I don’t take his comments particularly seriously. I think they’re part and parcel of rhetorical excess that comes in Washington from all sides.”

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