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Chapter 5: Local Action Plan
Long Term Initiatives (Sustainable Energy)

This section describes what municipalities can do as a long term initiative for sustainable energy.  See the menu on the left for other sections within Chapter 5.

The below table of contents is "click-able" if you wish to jump to different sub-sections on this page.

Planning for Sustainable Energy

How Does Your Community Meet its Needs for Energy Now

Envisioning a Sustainable Energy System

Efficient Use of Energy

Renewable Energy Sources

 - CASE STUDY: State of California

 - CASE STUDY: State of New Jersey

 - CASE STUDY: Santa Monica, CA

 - CASE STUDY: San Diego, CA

 - CASE STUDY: Chicago, IL

Bridging the Gaps Between Alternative Energy Scenarios

Best Renewable Energy Practices to Supply Fuel Examples

Delivering a Sustainable Energy Plan

Balancing the Existing Marketplace Away from Business-as-Usual

Primer on Sustainable Energy Sources

Primary Barriers to Address

Conclusion

Additional Resources for Sustainable Energy
 

[DOWNLOAD] the "Long Term Initiative, Sustainable Energy" section of Chapter 5 (266 KB .pdf)

Planning for Sustainable Energy

Every community can move toward supplying its energy in ways that are clean, secure, affordable, and that meet citizens’ needs abundantly.  This is called a sustainable energy system.  Achieving it will mean increasing the supply of energy that comes from locally based, renewable sources.  It will also mean using sources of energy more efficiently.  Many communities are already moving in this direction.  You can, too.

How Does Your Community Meet its Needs for Energy Now

A good first step in developing a plan to meet a community’s energy needs now and into the future is to understand how the community currently gets its energy.  Most citizens in a community have no idea where their energy comes from.  Many have no idea that a typical community now spends as much as 20% of its gross income buying energy.  Because most of this energy comes from outside the community, 80% of those dollars immediately leave the local economy.  This means that most towns are slowly bleeding to death economically.

Achieving a sustainable energy future will require putting in place a very different energy supply system than most cities have now.  On average for the U.S. communities use very little renewable energy.  The Department of Energy (DOE) estimates that the U.S. in 2004 got only 5.7% of its energy from renewable sources.  Business as usual projections forecast that the U.S. would get only 1% more renewable energy by 2030.[1]

Table: Business as Usual Energy Projections

The projection from the Energy Information Administration (EIA) for 2030 could also be called the “do-nothing” option.  It illustrates that little progress towards using renewable energy can be expected without deliberate action on the part of cities, regions, states and the federal government.  But as described throughout this manual, change is coming.  The way we currently meet our energy needs will not continue.

Nearly 40% of primary energy used in the U.S. now goes to producing electricity.  Most of this is coal that is burned in central station power plants, contributing to global warming and producing enormous quantities of waste heat and pollution.  The resulting electricity is then shipped through massive power lines to the final customers.  In the whole process, well over two thirds of the original energy is lost.  These huge inefficiencies in electrical generation and distribution systems mean that electricity supplies only 16% of the energy that is delivered to customers. 

The remaining 60% of primary energy is used directly in buildings, industrial processes and transportation.  There are large inefficiencies in these uses as well.  For instance, an automobile is approximately 1% efficient at converting the energy stored in fuel into actually moving the driver.  All of the remaining energy produces heat and pollution.[2] Following the 1979 oil price increase, tougher vehicle efficiency standards reduced U.S. use of oil 15% over the five years at the same time that the economy grew by 16%.  Given that there are cars now on the road getting over 60 miles per gallon, and the vehicle fleet average is 21 MPH, there obviously remains a large scope for increased efficiency.[3]

In addition, existing energy systems are vulnerable.[4]  Recent estimates of the economic costs of ordinary power outages and power fluctuations in the U.S. put the cost of such disruptions as high as $188 billion annually.[5]  This number would obviously be dwarfed by significant natural or terrorist disruptions.

In part because of this, many industries have moved to supply part or all of their own energy.  By 2001, “non-utility” providers (an owner of electric generating capacity that is not an electric utility) were providing one-sixth of the nation’s electricity.  There is a rapidly expanding marketplace for distributed energy. 

Enormous economic and energy security benefits can be obtained through greater use of “distributed” energy sources, meaning energy sources physically close to, and matched in scale with end-uses.[6]  Most of current “distributed generation” is not renewable.  Much of it is gas-fired cogeneration, but increasingly new additions of distributed generation feature solar or wind power. 

U.S. Department of Energy Assistant Secretary David Garman notes:

Aside from its obvious environmental benefits, solar and other distributed energy resources can enhance our energy security.  Distributed generation at many locations around the grid increases power reliability and quality while reducing the strain on the electricity transmission system.[7]

Envisioning a Sustainable Energy System

Before a town can decide what energy future it wishes to develop, its citizens need to be educated about the technologies that are available and in use in other communities.  The community should also understand the costs associated with doing things in a different way and as well as the costs that inaction would impose.  For all of the reasons outlined in this manual, continuing to meet our energy needs as we have in the past may not be an option.  Failure to undertake an aggressive transition to the best technologies now available will actually penalize a town.  For instance, an examination of one utility’s reluctance to buy wind electricity instead of natural gas plants showed that the decision forced consumers to pay nearly $200 million in unnecessary electricity bills over the past five years.  If the utility had purchased wind, the bills would have been lower, and the community would have been on its way to a carbon neutral future.[8]

A community that wishes to meet the energy needs of its citizens without emitting GHGs must lay out a strategy for transitioning its energy supply from fossil fuels to renewable energy.[9] 

Such a plan sets forth:

• A vision of a sustainable energy system that will meet the community’s greenhouse gas (GHG) goals/limits and renewable energy goals;

• A plan to meet the needs for vehicle fuels, electricity, and facility energy needs and production opportunities;

• City/regional government’s intent to take short- and long-term renewable energy actions on a local and regional scale;

• Partnerships with key stakeholders:  utilities, vehicle fuel providers, other levels of government, and major employers or energy users.

Efficient Use of Energy

A sustainable energy plan will be founded on the efficient use of energy.  The actions presented in this manual to reduce emissions of GHGs are an excellent starting point.  When undertaking an analysis of the opportunities to save energy it is wise to disaggregate energy use so that it is clear what kinds of energy different end-uses require.  Studies that aggregate information into sectors such as residential or commercial make it hard to understand what programs will work best, and then what supply measures will enable users to run vehicles, or deliver power to computers most effectively.

Based on the actual needs of a community, a plan will describe where to get additional energy supplies once all the cost effective energy savings measures have been implemented.  Fortunately, many studies have shown that it is possible to meet all of the energy needs of a dynamic growing industrial society using energy efficiently and deriving it from the various renewable forms of energy.[10]

In most cases, new sources of energy are more expensive than older ones.  A good strategy both for protecting the climate and for keeping your local energy bill lower is to buy enough energy efficiency to avoid the need to bring on new sources of power—for example, in the case of electricity, achieving “no load growth.”  This is a relatively simple equation to manage:  ensure that what the community invests in energy efficiency each year is sufficient to offset any population growth, economic growth and energy-use growth unrelated to the first two.  So long as energy end-uses remain unregulated and/or customers do not see effective efficiency incentives, it can be expected that consumers will add devices such as plasma televisions (which use five times the energy of a regular television) and other energy-inefficient appliances that in the aggregate are costly to the community’s residents and businesses.

Proven examples of energy savings opportunities [11]:

• Properly choosing office equipment and commercial and household appliances has saved over two-thirds of their energy use with the same or better service and comparable or lower cost.
   

• Skilled retrofits have saved 70–90% of office and retail lighting energy, yet the light quality is more attractive and the occupants can see better.  In most cases, the better lighting equipment lasts far longer and so more than pays for itself by costing less to maintain.
   

• Motors use three-fourths of industrial electricity, three-fifths of all electricity, and more primary energy than highway vehicles.  This use is highly concentrated: about half of all motor electricity is used in the million largest motors, three-fourths in the three million largest.  Since big motors use their own capital cost’s worth of electricity every few weeks, switching to more efficient motors can pay back quickly.  This plus retrofitting the rest of the motor system saves about half its energy and pays back in around 16 months.
   

• The chemical industry saved half its energy per unit of product during 1973–90 by plugging steam leaks, installing insulation, and recovering lost heat.  Now it’s discovered that better catalysts and matching heat to the required temperature can often save 70% or so of what’s left, yet pay back within two years.  Next-generation industrial plant design, now moving from the chemical industry into semiconductors, is uncovering 50–75% savings with lower capital cost, faster construction, and better performance.  Early adopters will prosper.
   

• Many of these examples illustrate a new design concept: that whole-system engineering can often make it cheaper to save a larger than a smaller fraction of energy use.  This typically comes from integrating the design of an entire package of measures so they do multiple duty (such as better design saving on both energy and equipment costs), or piggyback on renovations being done anyway for other reasons, or both.  Good engineers think this is fun.  Most economic theorists assume it is impossible.

Efficiency opportunities expand far into the future:

• Just selling “waste” heat to other users could cost-effectively save up to about 30% of U.S. and 45% of Japanese industrial energy. (America’s power stations waste more heat than Japan’s total energy use.)




• Still largely unexploited are new kinds of heat exchangers and motors, membrane separators and smart materials, sensors and controls, rapid prototyping and ultraprecision fabrication, and radically more frugal processes using enzymes, bacteria, and biological design principles.




• Saving materials also saves the energy needed to produce, process, transport, and dispose of them.  Product longevity, minimum-materials design and manufacturing, recovery of any scrap not designed out, repair, reuse, remanufacturing and recycling together present a formidable menu of business opportunities that also save energy, pollution, mining, and landfilling.  Japan cut its materials intensity by 40% just during 1973–84; but far more is yet to come.  Americans throw away enough aluminum to rebuild the country’s commercial aircraft fleet every three months, even though recycling aluminum takes 95% less energy than making it from scratch.  Smart manufacturers now take their products back for profitable remanufacturing, as IBM did with computers in Japan and Xerox does with photocopiers worldwide.




• Many energy savings reduce climatic threats from more gases than just CO2.  Advanced refrigerators, using vacuum insulation and helium-engine coolers, can save over 90% of the energy of a standard refrigerator, thus avoid burning enough coal to fill the refrigerator every year.  They also eliminate climate and ozone-disrupting cfcs from insulation and refrigerant.  Landfill and coal-mine gas recovery turns heat-trapping and hazardous methane emissions into a valuable fuel while making electricity that displaces coal-burning (see the chapter on waste management).  Recycling paper (the average person in a rich country uses as much wood for paper, mostly wasted, as the average person in a poor country uses for fuel) saves it from turning into landfill methane, and also saves the fossil-fueled used in manufacturing and transportation.  These and scores more examples represent business opportunities with multiple profit streams.

Best Practice Examples of Community End-Use Strategies:

• The U.S. Federal Government conducts extensive programs to reduce energy end-use at facilities, with an overall goal of 2% annual reduction in each facility.  This is achieved through systematic audits through operations such as the Federal Energy Management Program of the National Renewable Energy Lab and Oak Ridge National Lab.[12]  The Department of Defense’s (DoD) Energy Policy includes a goal of conducting energy savings with less than a ten years payback.[13]  The DoD’s Energy Conservation Investment Program saves $3-4 for every $1 invested over the investment lifecycle.[14]




• Leading companies pursuing best practices regarding end-use energy management include multi-national firms Interface Inc., DuPont Corp., STMicroelectronics, ALCOA, ALCAN, Wal-Mart, Honda and SC Johnson.  Mid-size or small businesses include Hot Lips Pizza of Portland, OR; New Belgium Brewing of Ft. Collins, CO; the IGA Market in Sacramento, CA.[15] 




• Clean Air Cool Planet is a small, compelling organization dedicated to finding and promoting solutions to global warming.  They’re a great example of a small non-profit  that is making impressive changes in the carbon emissions of all sorts of industries.  They partner with companies (Timberland, Verizon, Harbec Plastics), campuses (Harvard, MIT, Yale) and communities in the Northeast to help them reduce their carbon emissions in ways that make financial sense.[16]




• Leading academic institutions pursuing best practices include the University of Calgary, Canada; Tufts of Boston, MA.




• Many utilities have programs similar to Nevada Power, which provides cash rebates for energy efficient appliances and air conditioners, and installs devices that reduce air conditioning electrical demand during summer peaks.[17]




• The consumer-owned electric utility serving Gainesville, Florida decoupled profits from energy sales to help promote efficiency.[18]




• Seattle adopted an energy building code in 2004 stronger than the International Energy Conservation Code standards.[19]




• Berkeley requires energy saving retrofits when homes are sold or significantly upgraded.[20]




• Several cities, including Ashland, Oregon provide extensive assistance to homeowners for energy audits and energy-use upgrades.^[21]




• Energy efficiency can be implemented very rapidly, by either or both of two quite different methods.[22]  In the 1970s and ’80s, as now, there were high or rising energy prices and a sense of urgency:  During roughly 1975–85, most new U.S. energy-using devices—cars, buildings, refrigerators, lighting systems, etc.—doubled their efficiency, improving at an annual rate averaging around 7%.




• If all Americans saved electricity as quickly and cheaply as ten million people served by Southern California Edison Company did during 1983–85, then each year they’d decrease the forecast need for power supplies a decade hence by about 7%, at a cost to the utility around one-tenth that of today’s cheapest new power stations.




• In the 1980s, skillful utilities captured ~70–90+% of particular efficiency markets, mainly difficult ones like retrofitting house shells, in just one or two years.




• During 1990–96, utility facilitation enabled electric customers in Seattle—with the cheapest electricity of any major U.S. city—to save electric load nearly 12 times as fast as those in Chicago, and electric energy more than 3,600 times as fast, even though Seattle electricity prices are about half of Chicago’s. This conclusively shows that making an informed, effective, and efficient market in energy-saving devices and practices—as Seattle Light’s efforts helped to do—can fully substitute for a bare price signal, and indeed can influence energy-saving choices even more than can price alone.  That is, people can save energy faster if they have extensive ability to respond to a weak price signal than if they have little ability to respond to a strong one.




• Investor-owned utilities, when rewarded for cutting bills, sold efficiency ever faster and more skillfully despite falling electricity prices.  In 1990, New England Electric System captured 90% of a small-commercial pilot retrofit market in two months.  Pacific Gas and Electric Company captured 25% of its entire new-commercial-construction market—150% of the year’s target—in three months, so it raised its 1991 target…and captured all of it in the first nine days of January.

Renewable Energy Sources

Renewable energy generally means power that comes from natural processes such as sunlight, wind, water flows, or earth’s natural heat sources (geothermal) and that are inexhaustible.  These are also called clean energy sources.  Whether these sources are truly sustainable depends on whether they take no more from the earth than can truly be renewed, whether they are produced in ways that do not pollute and whether they are deployed in ways that respect people and nature.  There are many ways to supply energy, but some, like nuclear power, are neither clean, safe nor cost-effective.  Others like hydrogen are still experimental.  Others like solar space satellites have unfortunate military applications, and are extremely costly.  None of these are considered “clean technologies,” even though they may be argued to be renewable or non-carbon.

Sustainable energy planning does not necessarily mean that the municipal government must go into the energy business using municipal enterprises.  This may be a good idea, and many cities are considering “municipalizing” their energy suppliers, but a city can equally well work with existing utilities to ensure that energy efficiency and renewable energy are made available for its citizens and to future generations.[23]

Some cities find that it is useful to work with their citizens to develop a long-term vision of what sustainability can mean for their community.  Such a vision can motivate people and guide community investment.  Without a vision, investments for incremental improvements may not achieve the economic and social advantages of a strategic plan to meet the community’s needs sustainably.

What is a realistic but aggressive vision for maximizing renewable energy for your community by, say, 2025?  How much change can actually be achieved in the next 20 years?  A dramatically different future from the one foreseen by the U.S. Department of Energy, is both desirable and doable.  Several organizations have offered maps for increasing sustainable energy use:

• The Union of Concerned Scientists offers a Clean Energy Blueprint that would achieve by 2020:[24]

• Renewable sources meeting 20% of U.S. electricity needs;

• Consumer savings of $105 billion per year;

• Avoidance of 975 new power plants and billions of energy infrastructure costs (such as pipelines, etc.) and retirement of 180 old coal plants and nine major nuclear plants; and

• Reduction of natural gas consumption by 18%, coal consumption by 60%, carbon dioxide emissions by 67%, sulfur dioxide emissions by 55%, and nitrogen oxide emissions by 55% from “business as usual” projections.




• The Apollo Alliance plan for clean energy cities in the U.S. includes the following goals:[25]

• Generate 25% of electricity from renewable sources;

• Reduce oil consumption by 25% by 2025; and

• Build efficient transportation systems and high-performance (green) buildings.




• The Rocky Mountain Institute’s “Oil End-Game”[26] plan proposes that the U.S. could eliminate its petroleum products dependence for energy through:

• Highly efficient buildings and vehicles that double fuel efficiency (52% savings);

• Domestic biofuels production (25%); and

• Substitution of natural gas for the remaining petroleum (25%).




• Numerous strategies developed both abroad and domestically illustrate proactive means of creating more sustainable energy policy.  For example, the EU has adopted the Energy Intelligent Europe Initiative, tying European competitiveness and quality of life to a transition away from fossil fuels to energy efficiency and renewables.[27] 




• The German Renewable Energy Act (2001) outlined a renewable energy strategy for that country.  The German approach included the “eco-tax” (Ökosteuer) that raised gasoline costs by $.18/gallon by 2004.[28]  The German Renewable Energy Act calls for reaching 20% of electricity and 10% of primary energy from renewable sources by 2020; and 50% of primary energy from renewable sources by 2050, through the following strategies: [29]

• Fixed remuneration that gives incentives for renewable energy sources (ranging from  $.055/kwhr for wind to $.574 for solar photovoltaic) that is reevaluated every two years

• Simple and transparent structure

• Incentives for continuous renewable energy cost reduction

• High security for investors

• No dependence on public budgets

• Financed by energy utilities

• Steps taken towards internalizing external costs

City and state governments in the U.S. are also adopting innovative strategies to promote renewable energy.

As of Spring 2006, 20 states plus the District of Columbia have adopted programs that mandate getting a certain percentage of electricity production from renewable sources.[30]  These “renewable portfolio” programs encourage utilities and citizens to use more renewable energy.  California and New Jersey have adopted particularly ambitious goals.  Examples of U.S. renewable energy programs include:

Renewable Energy

CASE STUDY:  State of California

California’s Solar Initiative (2005) aims to increase the amount of installed solar capacity on rooftops by 3,000 MW by 2017 with investor-owned utilities through:[31] $3.2 billion for photovoltaic and concentrated solar rebates; Exempting low-income households from any rate increases associated with the program and using 10% of the funds for projects for low-income households CONTACT Go Solar California www.gosolarcalifornia.ca.gov/

 

Renewable Energy

CASE STUDY:  State of New Jersey

New Jersey’s Clean Energy Program calls for 1,500 MW of solar electricity installations in the state by 2020 through:[32] A Renewable Portfolio Standard of 6.5% by 2008 with a target of 20% by 2020.[33] The Clean Power Choice program that offers consumers the option to purchase renewable electricity; Financial incentives for high-performance green buildings Creation and trading of “Solar Renewable Energy Certificates” which financially reward distributed energy producers who help utilities meet renewable portfolio requirements

Examples of renewable energy goals adopted by U.S. cities include:

Bridging the Gaps Between Alternative Energy Scenarios

At present, most energy planning is done in a disintegrated fashion.  Little connection (i.e., whole-system thinking) is drawn between the planning that is done to supply vehicle fuels and planning that ensures supply to residential and commercial facilities (electricity and direct consumption).  Vehicle fuel is delivered by the private sector, partially in response to state and federal government taxes/incentives and regulations.

For example, vehicle fuel planning typically takes three forms:

• Fuel production and distribution planning by private energy providers (e.g., petroleum companies and, increasingly, bio-fuel companies);

• Air quality planning by local air quality boards or districts;

• Alternative fuel plans created by state or local governments.

Communities can intervene in these systems to ensure that energy is supplied in ways that are cost-effective and secure.

Best Renewable Energy Practices to Supply Fuel Examples

• Private sector:

• As of summer 2006, 65 privately owned biodiesel manufacturing plants had opened in the U.S. with 49 more under construction.[38]

• In 2005, BP launched its “low-carbon energy” business, an $8 billion investment over ten years to provide cleaner power sources.[39]  Through the U.S. Department of Energy’s Hydrogen Plan, BP, which produces 5,000 tons of hydrogen daily, collaborated with Ford Motor Co. and DaimlerChrysler in 2004 to build hydrogen fleet fueling stations in California, Florida and Michigan.[40]  The company expects to complete engineering studies in 2006 of a hydrogen power plant in Carson, CA, using petroleum coke as a fuel.  The carbon emissions from converting natural gas to hydrogen (4 million tons per year) are planned to be sequestered underground.[41]




• Air quality planning:

• The South Coast Air Quality Management District serving the Los Angeles metro area has an extensive Clean Fuels program that co-funds dozens of demonstration projects annually.[42]

• British Columbia government’s climate change plan includes programs of the air quality division designed to reduce GHGs and improve efficient use of vehicle fuels, including the “Scrap-it Program” that rewards demolition of older, highly polluting vehicles in exchange for rebates on cleaner vehicles and a goal for attaining 30% green vehicles in the government’s fleet by 2008.  The program also publishes tests of hybrid performance.[43]




• Alternative fuel plans[44]

• Plug-in hybrid vehicles may be available in the U.S. market by 2008.  These vehicles represent an opportunity for vehicle fueling to help (if such vehicles are recharged during off-peak electrical production hours) or hinder community energy security (if charging boosts existing peak demands).  Both the State of California and the city of Austin, Texas have programs underway to encourage the use of plug-in hybrids.

• Hydrogen fuel-cell hybrid vehicles represent an opportunity for distributed power generation.  The vehicles are small electric powerplants on wheels that could generate power for a facility or the electrical grid while parked, if a connection were supplied that delivered hydrogen, and delivered the resulting electricity to the larger electric grid.

• The “Hydrogen Highway Network Action Plan” project of the California Air Resources Board (2004) aims “to support and catalyze a rapid transition to a clean, hydrogen transportation economy” specifically co-funding for three hydrogen fueling stations and the state lease of hydrogen-fueled vehicles [45]

Residential and commercial facility energy planning differs by states.  Sometimes it is highly regulated by agencies (e.g. public utility commissions or the Federal Energy Regulatory Commission).  In other locales it is a function of the private sector’s handling of fuels.

Community-level facility energy end-use planning typically involves education and/or incentives that affect choices by end-users.  Programs to encourage customers to use energy wisely this are described in this Manual’s Chapter 5, Residential Section.

Without such programs electric utilities are vulnerable to major system problems when the utility’s projection (guess) of total potential electrical demand falls short of actual demand.  This happened to Los Angeles Water and Power in the summer of 2006 when it underestimated electrical demand during a summer heat wave by 500 MW and blackouts resulted.[46]  Had LA’s energy planning enabled customers to live in buildings that kept inhabitants comfortable without air conditioning, this problem would not have arisen, everyone’s bills would have been lower and far less carbon would have been emitted.  Programs to integrate the use of energy efficiency and renewable energy can deliver significant value to a community. 

Sacramento Municipal Utility District.  In 1989, Sacramento, California shut down its 1,000-megawatt nuclear plant.  Rather than invest in any conventional centralized fossil fuel plant, the local utility met its citizens’ needs by investing in energy efficiency and such renewable supply technologies as wind, solar, biofuels and distributed technologies like co-generation, fuel cells, etc.  In 2000, an econometric study showed that the program has increased the regional economic health by over $180 million, compared to just running the existing nuclear plant.  The utility was able to hold rates level for a decade, retaining 2,000 jobs in factories that would have been lost under the 80% increase in rates that just operating the power plant would have caused.  The program generated 880 new jobs, and enabled the utility to pay off all of its debt.

Fort Carson Mountain Post in Colorado has set forth a plan to meet 100% of its energy needs with renewable energy by 2027.[47]

Delivering a Sustainable Energy Plan

Delivering cost-effective sustainable energy involves two essential tasks:

1. Moving the existing energy marketplace away from the business-as-usual scenario by reducing various market failures

2. Progressing on an investment path towards a sustainable energy future

In undertaking these tasks, it is good to solicit input from such community partners as utilities, vehicle fuel providers, other levels of government, and major employers or energy users.

Balancing the Existing Marketplace Away from Business-as-Usual

Environmental economists have long noted a fundamental flaw in market prices: Most prices fall short of capturing the full costs of producing the product or service being offered. 

Costs such as the impact of releasing carbon into the atmosphere, the cost of vulnerabilities of central electricity generation, and the various subsidies that the Federal government gives to make historic forms of energy like coal or oil look cheaper, are called “externalities.”  These impacts are massive, but are not reflected in the market prices of energy.  One study estimated the externalities of coal-fired electricity to be approximately four times the market price—meaning that in a truthful marketplace, coal-fired electricity would be closer to $0.21/kwhr instead of the present $.04-$.06 cents.  For nuclear power, externalities are estimated at nine cents per kilowatt hour—nearly double the market cost of running existing plants.[48] 

According to the U.S. Department of Energy, coal-fired electricity externalities include acid rain, urban ozone and global climate change.[49]  Other externalities include mercury pollution, radioactivity, pollution from mining, milling, transport and waste disposal, externalities from the use of water, and habitat losses or other ecosystem damage incurred during the coal lifecycle.  In the past four decades, governments have slightly reduced price externalities by implementing regulations to protect the environment and reduce damage to human health.  Even so, the majority of externalities listed above remain unresolved.

A case can be made that another externality of non-renewable resources is the denial of that resource to future generations.  Interface Inc. CEO Ray Anderson, one of many business leaders dismayed by the consequences of externalities, notes that externalities mean that the market alone cannot provide sufficient constraints on corporations’ tendency to cause harm.  A true market, he argues, would force companies to include externalities in the price of their offerings.[50]

In contrast, solar electricity is estimated to have externality costs of one cent per kilowatt hour, in addition to its current estimated costs of 15 to 20 cents.  Wind energy is presently cost competitive with coal and nuclear, with similarly few externalities.[51]

To achieve a more balanced marketplace, communities can:

• Use regulations and/or taxes/fees to increase the price of non-renewable energy and provide incentives to providers of clean energy sources of all kinds (e.g., to make solar energy panels with fewer toxic materials)

• Use regulations and financial mechanisms to Reduce the effective costs of renewable and in distributed energy

• Increase the incentives for energy utilities and community citizens/organizations to invest in energy efficiency and renewable energy

Examples of leading-edge actions taken by local governments include:

• Seattle City Light, the city of Seattle’s public utility, has committed to be carbon-neutral.  This utility is reducing its carbon footprint through use of renewable energy sources and purchasing carbon credits to achieve carbon neutrality.  The scheme effectively prices its energy as if it had few externalities.[52]  Seattle City Light achieved zero net greenhouse gas emissions in 2005 and 2006.[53]

• Thief River Falls, Minnesota, offers low interest loans and incentives to customers who install ground-source heat pumps—a less electricity intensive system for heating and cooling buildings.[54]

• Santa Clara, California, rents solar hot water systems to citizens and businesses.[55]

• Honolulu, Hawaii, offers 0-2% loans to homeowners to install solar hot water systems.[56]

• The municipal utility in Bowling Green, Ohio, led a collaborative effort among ten municipal utilities to finance a wind-energy farm.[57]

• Mason City, Iowa, changed zoning ordinances to allow appropriately sized wind turbines to be installed in residential zones.[58]

• The city of Chicago and 47 other local government agencies formed the Local Government Power Alliance.  Through it, they negotiated lower-cost electrical service that includes higher levels of renewable energy.[59]

For additional examples, see:

• The Apollo Alliance, “New Energy for Cities—Energy Saving and Job Creation Policies for Local Government.” [60]

• ICLEI, the International Council for Local Environmental Initiatives.[61]

• The U.S. Department of Energy’s Energy Efficiency and Renewable Energy home page.[62]

• The National Renewable Energy Laboratory’s home page.[63]

Investing for Sustainable Energy

Energy is almost entirely produced and consumed by what accountants call “capital” goods—long-term investments in such energy producing devices as power plants, wind turbines, solar cells and the infrastructure like power lines to support them.[64]  Energy is usually consumed by other capital goods—the heating, cooling, and lighting systems in buildings, transit options like cars, and industrial equipment.  Capital goods are meant to have a multi-year life, and are often paid for over the item’s lifetime.  Large energy producing or consuming systems are expected to last several decades. 

Setting and delivering on short-term goals to replace wasteful, fossil fuel energy systems generates excitement, demonstrates commitment and builds institutional momentum towards sustainable strategies, but requires a plan to finance these alternative capital investments. 

The success of renewable power efforts will be partly determined by whether such efforts are given consistent support by local and regional governments.  Some local governments will be hesitant to take on a leadership role if increased short-term costs threaten to temporarily dampen their business climate. 

The solar energy industry in California hailed the California Solar Initiative because it created an 11-year certainty of support for the industry through rebates.  This long-term approach will allow the industry to give investors a stable planning horizon that will give them the confidence to change from the business-as-usual course.

The city utility in Burlington, Vermont has invested heavily in renewable generation:

• Over 46% of Burlington Electric Department (BED)'s power mix was from renewable sources in fiscal year 2005.  This was up from 42% in 2004. 

• BED is continuing to pursue additional renewable sources of power such as wind energy in an effort to add fuel diversity and to stabilize power costs for Burlington consumers.  With fossil fuel prices at record highs, renewables act as a means to balance the high cost of fossil fuel based energy.  The cost of generating renewable energy, especially in-state renewable energy, is level and generally predictable; unlike fossil fuel its price is not influenced by international and market forces beyond our control and it does not contribute to global warming.  We look forward to increasing Burlington's supply of renewables such as wind energy not only as a way of providing the citizens and business owners of Burlington with clean electricity but also providing them with an affordable and reliable supply.  Renewable energy is part of a sustainable and fiscally sound power supply portfolio.[65]

The city of San Francisco boasts one of the nation’s most comprehensive sustainable energy programs.  It required the use of B20 biodiesel in all city diesel vehicles in 2006, moving to the use of B100 (100% biodlesel) in 2007.  All city buildings must meet the U.S. Green Building Council’s LEED Silver criteria for green buildings.  The city passed a bond to fund putting solar electric systems on residential buildings, and will replace its payroll tax with a green tax credit for solar energy.

Community leaders need to realize that every day new capital investment decisions are made that will affect energy production and consumption patterns for decades to come.  To minimize energy needs a community will need to invest in different equipment choices that provides lasting value because it uses less energy.  For example, investing in high performance green buildings that can be expected to be 50% less costly to operate is a good deal, even if there are higher initial design costs.[66]

Every time a community chooses inefficient options like centralized energy supplies, it locks citizens into years of being less competitive.  It is important to articulate a sustainable energy future that looks two decades or so into the future, that maximizes your chances for widespread use of distributed, renewable energy, and that uses energy efficiently to help avoid long-term investments that will be uncompetitive or environmentally untenable in the future. 

Primer on Sustainable Energy Sources

The primer below is offered as a guide.  It obviously cannot address current or specific market conditions, since these are constantly changing.  Renewable technologies are evolving rapidly as well.  Every community should undertake an up-to-date investigation at the time of a sustainable energy planning process.

The following renewable energy sources will be explored further:

• Wind-generated electricity;

• Solar-generated electricity and hot water;

• Biomass-generation;

• Hydro-generation;

• Waste-generated electricity;

• Earth-generation;

• Hydrogen power; and

• Nuclear power.

Wind-Generated Electricity

Examples: Horizontal-axis wind turbines (the most common type of turbine). Vertical-axis wind turbines (designed for capturing wind closer to the ground or tops of buildings).[67] Wind-capturing devices in the atmosphere e.g. floating wind turbines.[68]

Sustainability Attributes: Wind energy can be used in a decentralized network but can also be used in a conventional grid system; wind has no ongoing emissions; requires minimal toxic or hazardous materials for construction and operations.  Its costs are competitive to coal and natural gas, meaning that taking externalities into account, it may be several times less expensive than nuclear or fossil electricity that require ongoing fueling and avoidance of full-costs.

Sustainability Challenges: Include potential wildlife impacts, other ecological impacts,[69] visual impacts, maintenance challenges.[70]

Market Challenges: Include educating government leaders and customers about wind energy’s potential, siting and regulatory challenges,[71] evolving technology, wind’s intermittency, and challenges (given intermittency) in integrating with traditional electrical grid management.  Getting power lines built to accommodate intermittent wind resources is a challenge in the current structure of U.S. power grids.

Potential Community Support Actions: Begin with giving priority to building wind energy infrastructure, and giving incentives to utilities and customers to buy wind and transition away from coal.

Solar-Generated Electricity and Hot Water

Biomass-Generated Electricity

Waste-Generated Electricity

Hydro-Generation

Earth-Generation

A sustainable energy primer is not complete without briefly addressing the sustainable attributes of a promising new energy carrier, hydrogen, and the continued controversy regarding whether nuclear energy can be considered a sustainable technology for generating energy.

Hydrogen

Hydrogen, like electricity, is an energy carrier.  Though a natural element, on earth hydrogen is bound with oxygen in the very strong bonds of water.  To “liberate” hydrogen takes energy.  Once liberated, the hydrogen is attracted to rebond with oxygen to again form water.  The flow of electrons generated by this process is the basis for the electricity produced by fuel cells. 

Critical questions regarding whether and how the U.S. should adopt hydrogen as a preferred carrier of its energy future include:

• Is hydrogen a more efficient carrier of energy than electricity—enough so to justify massive investments in hydrogen carrying infrastructure?

• How easily can existing fleets be adapted to use hydrogen, if at all?

• What storage technologies will emerge as the standards for the marketplace – facilitating investments in fueling infrastructure?[78]

• Can fuel cells that convert hydrogen to electricity both come down in price and find alternatives to premium metals as the catalyst?

Auto companies expect technology debates regarding hydrogen vehicle technology to continue until about 2015.  Meanwhile, the question for your community is whether there are cost-effective ways to support the development of a hydrogen infrastructure as this technology develops.

Nuclear Power

Nuclear electricity can substitute for coal-fired generation as a utility baseload resource.  Because the fissioning of nuclear material does not release GHG emissions (though the nuclear lifecycle releases large amounts), nuclear advocates claim that the technology is carbon neutral. 

While some people are concerned enough about climate change to advocate using nuclear power as a coal substitute, most advocates do not consider nuclear to be a cost-effective substitute, a sustainable technology, or a viable solution.  The first challenge with nuclear is its cost.  New nuclear plants rival solar electric in price.  Advocates claim that new varieties of reactors will be cheaper, but the past history of nuclear went, in the words of the Economist Magazine, “from too cheap to meter to too costly to matter.”[79]  Nuclear technology is also strongly proliferative of nuclear bombs.  Spreading the domestic power technology around the world would certainly encourage more nations to develop weapons capability.[80] 

The multi-generation liability of toxic waste still plagues the nuclear fuel cycle, even after a half-century of determined research.  A litmus test:  would your community be willing to site a new nuclear plant or waste dump nearby?  New reactor designs may hold promise of reducing the likelihood of catastrophic accidents, but such accidents are only the tip of the iceberg of the unsustainable aspects of nuclear power.  Given that few communities would undertake to construct a reactor on their own, this debate is likely to be irrelevant to a community energy plan.[81]

Primary Barriers to Address

There are hundreds of barriers that inhibit people from implementing energy systems that are preferable to what are in place now.  The 1998 analysis of climate protecting opportunities, Climate Making Sense and Making Money[82] listed 60–80 specific market failures of 8 types:

1. Capital misallocation

2. Organizational failures

3. Informational failures

4. Regulatory failures

5. Value-chain risks

6. Perverse incentives

7. False or absent price signals

8. Absent markets

These include such market imperfections as:

• Lack of clarity of benefits to local community

• Lack of confidence in the numbers (payback, lifecycle costs) both with city departments and private businesses

• Misalignment of the incentives that electric utilities see with the broader interests of the community

• The lack of “communicators” who can help all stakeholders understand the benefits of renewable energy

• Failure to acknowledge people’s perceptions of risks and how those risks can be mitigated, or how risk perceptions can be reduced

• Conservatism of banks and hesitancy to deal with renewable energy investment/loan opportunities

• Some local municipalities have zoning rules against solar panels & wind turbines

Three barriers are particular challenges:

1. The hassle factor
   Things are working fine, why change them? Margaret Mead said that the only person who likes change is a wet baby. The challenges posed by climate change will dictate change. Cities that undertake such programs on their own timeline will enjoy a significant advantage. But overcoming the basic hassle factor will take inspired leadership.




2. The complexity factor
   Why should the city government get involved in a complex field full of experts at utility and energy service companies?  As this Manual has shown, utilities can be slow to move slowly towards a sustainable energy future for a variety of reasons, primarily including institutional momentum or skepticism, regulatory systems and their financial incentive structures.  Utilities are critical economic development partners and can be encouraged to embrace the economic advantages of distributed and sustainable energy as part of rate-reduction strategy that will help your businesses become more globally competitive.  Unless your utilities are taking a leadership role in sustainable energy, they will benefit from prompting – the nearly four-decade history of environmental activism with utilities demonstrates that not all the best ideas come from the “experts.”  In short, the issues are complex but can be grasped by talented citizen’s committees for a sustainable energy future that will empower a community to take on matching production with end-uses, and maximizing the economic development benefits of keeping power generation dollars in the local economy.




3. The market challenges of distributed power (sustainable or not).  
   Distributed power generation located near the people who will use the power, and scaled to the size of consumption is a new concept for nearly all Americans. Key barriers to overcome through sustainable energy planning include:

• Reluctance of citizens or organizations to enter the power production business themselves and/or make long term utility-type investments

• Reluctance of financial institutions to fund utility-type investments at competitive interest rates – especially of new technologies with little collateral value

• Lack of information flow to all but highly motivated citizens

All of these barriers can be reduced through visionary planning that helps the community understand that its energy future should be in its own hands; that the experts do not have all the answers; and that the energy security and other benefits of a more sustainable approach are serious economic development advantages.

Early sustainable power technologies systems gained a reputation, (deserved or not) for poor performance/ excessive maintenance, safety, cost, aesthetics and provider reliability/ stability.

Like most pioneering technologies, sustainable energy efforts have suffered from some ideas being ahead of available materials, design or maintenance capabilities.  Too many people remain stuck in that past rather than observing the almost daily maturation of sustainable energy systems.  Modern renewable energy is a far cry from early systems.  Public education is the remedy.  Many communities sponsor sustainable living fairs or events that help citizens understand and welcome sustainable technologies.[83]

Conclusion

Cities and regions can plan for a sustainable energy future: maximizing renewable energy sources; using market forces to balance energy prices through inclusion of externalities in energy prices; and supporting renewable investments through favorable regulations and financing.

While much research and experimentation to determine the right strategy for your community, a significant community of sustainable energy planning practitioners and proven practices is already available to guide the efforts of your community.  Modern technologies to save energy and generate renewable energy communities can profitably protect the climate and the economy. 

Additional Resources

• Race to the Top: The expanding role of U.S. State Renewable Portfolio Standards, Prepared for the Pew Center on Global Climate Change, June 2006, Author: Barry G. Rabe, University of Michigan
  This report builds on earlier Pew Center analyses of the evolving state role in climate policy development, placing a particular focus on the RPS experience to date. It presents an overview of this policy tool and examines key factors in both policy formation and implementation. This work considers the experience of all RPS states but devotes particular attention to five case studies: Texas, Massachusetts, Pennsylvania, Nevada and Colorado that illustrate both common themes and points of divergence among individual state programs. The analysis concludes with an examination of RPS performance to date and some of the leading opportunities and challenges facing future development.
  www.pewclimate.org/global-warming-in-depth/all_reports/race_to_the_top/index.cfm




• American Energy Initiative Report
  "The American Energy Initiative is a joint project of the Worldwatch Institute and the Center for American Progress focused on educating and inspiring the public and policymakers on the importance of renewable energy to the economic, environmental and national security of the United States. The report, American Energy: The Renewable Path to Energy Security, demonstrates the potential of renewable energy and energy efficiency and presents a practical policy agenda for achieving them."
  A copy of the report is available on the web at:
  http://americanenergynow.org/about/




• Funding Opportunity - U.S. Department of Energy Grant, Solar America Initiative (SAI) Market Transformation: Solar City Strategic Partnerships.  For incorporated cities with populations greater than 100,000. 
  Application deadline: January 10, 2007
  tinyurl.com/yyyxja, 2 November, 2006,




• Prince Edward Island Renewable Portfolio--Prince Edward Island is planning to produce 30% of its total energy needs from local, renewable resources by 2016. 
  www.nawindpower.com/aw/print.php?plugin:content.175




• BioTown, USA--this project’s long term goal is to meet all the energy needs of Reynolds, Indiana via biorenewable resources, including electricity, natural gas replacement, and transportation fuel
  http://www.biotownusa.com/