Source: Iwan Baan
By: Rory Christian, Director of New York Smart Power, and Mary Barber, Director of Smart Power Initiatives
It was only a year ago that the most devastating storm the Northeast has ever seen slammed into the region. Hurricane Sandy pummeled the states of New York and New Jersey, destroying homes and businesses and knocking out electricity for millions of families for days, weeks and – in some cases – months.
The unprecedented situation shined a much-needed spotlight on the vulnerability of our century-old energy infrastructure, placing the issue front and center for the region’s state and local leaders, electric utility companies and regulators, particularly as climate change increases the frequency of extreme weather events. Utilities in the region have since begun to fortify flood-prone substations among other reinforcements to the power grid, but improvements that are ‘status quo’ are only part of the solution to future challenges.
Ensuring the adoption of technologies and policies that move the U.S. power grid into the 21st century, making it more resilient, flexible and smarter, can simultaneously accomplish today’s goals while preparing for future challenges – some of which may not yet be apparent. EDF is working closely with stakeholders to find innovative and pragmatic solutions to help modernize our aging energy infrastructure, an improvement that is crucial to resiliency, safety and storm recovery.
Modifications to existing rules and policies would allow for more distributed, renewable energy, demand response, energy efficiency and clean energy technologies that improve the environment, reduce harmful pollution and incent and empower customers to take control over their own energy use and lower their electricity bills. One such existing innovation is “demand response,” an energy management solution that provides financial incentives to customers who lower their energy use. Demand response puts consumers in charge of their own electricity bills by avoiding running energy-intensive devices (like water heaters for example) during periods of peak, or high, energy demand, or by shifting their use to a different time of day. This approach rewards those who reduce electricity during peak times by paying customers a market-based price for their actions, resulting in more money in peoples’ pockets, a more stable and reliable electric grid and less harmful pollution from fossil fuel-fired power plants.
Also, we cannot overlook the need for an engaged private sector to drive us toward the most creative, innovative energy solutions. Though significant public funds are being allocated to repairing damage by Sandy and preparing for adverse weather in the future – nearly $50 billion has been pledged in total government funds – government largesse should not be the only answer to the challenges faced by our country’s outmoded power infrastructure. The private sector’s involvement in the energy industry can be mutually beneficial. The energy industry can benefit from the influx of private capital as well as financing tools developed by the private sector, while private players will certainly benefit from investment opportunities in emerging markets.
For example, EDF has developed and is promoting on-bill repayment (OBR), an innovative financing tool that allows home and building owners to finance energy efficiency and renewable energy projects through funds provided by qualifying financial institutions that can then be repaid over time through a customer’s utility bill. The up-front costs for an upgrade such as the installation of energy-efficient windows comes from private sector lenders at no cost to customers.
EDF has been contributing to this body of knowledge and we are already seeing progress across the Northeast as decision makers act to make their regions more resilient. Earlier this month, New Jersey Governor Chris Christie allocated $25 million in federal funds to local governments to develop alternative energy projects designed to make the state’s power infrastructure resilient and reliable during widespread electrical outages. In New York, EDF is working with Governor Cuomo’s administration on establishing a “Green Bank” that would transform clean energy markets by filling market gaps in financing for renewable energy and energy efficiency projects in the state.
It will take time to transform the large and complex power generation industry. But we are beginning to see encouraging movement toward the goal of a cleaner, smarter and stronger energy infrastructure that will not only reduce harmful global warming pollution, but also protect us against future extreme weather events arising from climate change.