The Obama Administration has released the first-ever Quadrennial Energy Review (QER), which President Obama initiated in 2014. The report proposes policies and investments needed to modernize the U.S. energy system in order to spur economic development, improve energy security, reduce air pollution, and drive cleaner, more sustainable energy solutions.
With this release, the administration is laying the foundation for a multi-billion dollar investment in more resilient and dynamic grid assets and identifying numerous facets of the nation's energy transmission and distribution system in need of immediate improvement, as well as the solutions to address these challenges and vulnerabilities.
"The idea [of the QER] is to seize the huge opportunity for energy and cost savings now possible due to new energy and information technology that's changing everything from power plants to the power outlet on your wall," said Fred Krupp, president of Environmental Defense Fund (EDF). "These recommendations and the recent grid modernization steps from the Federal Energy Regulatory Commission move us towards an efficient energy system that will hold up in the face of extreme weather, expand customer choice, and smoothly integrate clean energy."
In its focus on transmission and distribution systems in the energy infrastructure, the QER has highlighted energy storage as a critical asset that increases flexibility, allows for greater renewable integration, and creates a more resilient grid.
One of the key recommendations in the QER is to establish a framework and strategy for storage adoption and flexibility, and develop fair and competitive market structures for new services and technologies.
The QER also focuses on making renewable energy more widely available.
"Wind energy is ready to scale up now, with another recent Department of Energy (DOE) report showing we can double wind-generated electricity in the next five years. After all, in the last five years the cost of wind energy has dropped by 58 percent," noted Tom Kiernan, CEO of the American Wind Energy Association (AWEA). "By adding more transmission, as today's report recommends, we can tap more of this made-in-the-USA supply of energy. Such grid upgrades more than pay for themselves by reducing electricity costs and improving electric reliability for consumers."
The report also highlights how operating reforms would allow the use of the existing grid more efficiently, benefiting consumers and enabling the integration of more renewable energy.
"Congress can do its part by reasonably extending the renewable energy Production Tax Credit (PTC) this year for as long as possible," Kiernan said. "With stable policy, we can keep improving our technology, lowering costs, adding jobs, and helping keep the U.S. on track to a cleaner, more diverse energy portfolio."
Electric utilities are making important investments to integrate new technologies and innovations that are transforming the electric grid to enable it to continue to serve as a platform that provides safe, reliable, affordable, and increasingly clean electricity, as well as more energy choices for customers.
"It is critically important that all recommendations recognize the value of the grid and its essential role in the daily lives of all Americans, the economy and national security," said Edison Electric Institute (EEI) President Tom Kuhn. "We appreciate the QER's focus on the reliability, resiliency and safety of the electric grid. The industry is actively engaged with DOE and the Administration on significant efforts to improve the security of the grid, and we look forward to continuing to enhance the partnership that we have created through the Electricity Subsector Coordinating Council."
With significant change underway in the U.S. energy system, public-private collaboration -- as demonstrated by the stakeholder process undertaken by the Department of Energy to prepare the QER -- is essential.
"The private sector and other stakeholders must work with government to update the market rules and establish the policy framework and incentive structures that are needed to spur the long-term planning and investment into our infrastructure that will provide a secure and diverse energy portfolio for our nation," Business Council for Sustainable Energy's President Lisa Jacobson said. "As more sources of cleaner energy come online -- from energy efficiency to natural gas and renewable energy -- the nation's energy transmission storage and distribution system (TS&D) remains the backbone of the power system. The modernization, expansion and optimization of this backbone will be essential to ensure the delivery of clean, reliable and affordable energy to American families and businesses.
Although many in the industry have applauded the administration and the QER, there are still issues.
"A critical gap remains with regards to U.S. gathering and processing infrastructure -- which links natural gas and oil wells to regional pipeline systems. This gap needs to be addressed to have a truly modern energy system," Fred Krupp, president of Environmental Defense Fund points out.
As far as the QER's proposal to work with states and local utilities to focus on reducing methane leaks across the natural gas distribution system, and the progress that has already been made in reducing emissions from local distribution systems, as demonstrated by a recent study led by Washington University, there is more work to be done.
"The annual emissions from this system are still comparable to the annual CO2 emissions from 19 coal-fired power plants and represent up to $195 million in lost gas each year," Krupp contends.
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