Energy policy: 2013 outlook

Another active year ahead
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Energy policy is always a front-burner issue in the U.S., igniting partisan battles and debates between environmental groups, utilities, and energy industry vendors. It's a challenge to orchestrate, but at the same time it's an opportunity to build a better, more reliable energy future.

Renewable energy policy will be a big issue in 2013. Credit: U.S. EPA

While regulatory and legislative progress tends to be slow, today's energy challenges require swift, confident action. Infrastructure investment, renewable energy generation, and smart meter deployments are just some of the issues facing the new Congress and a retooled Obama Administration.

While it's tough to predict exactly what will get done, it's clear that the energy industry needs clear energy standards and policies in order to continue investing in and improving the reliability and efficiency of the nation's electrical grid.

Ensuring a competitive renewable energy market

The green energy market is rapidly expanding into the international economy, and the U.S. will likely take steps in 2013 to ensure it remains globally competitive.

Massoud Amin, a member of IEEE's Energy Policy Committee, sees environmental and energy security as the nexus of national and economic security.

In an interview with FierceEnergy, he said that the U.S. has made a good "down payment" over the past four years through initiatives like the American Recovery and Reinvestment Act. But he said that work remains to be done to push the market over the edge. Renewables are poised to play a huge role in achieving this goal.

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While regulatory and legislative progress tends to be slow, today's energy challenges require swift, confident action.
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Clean energy investment has grown more than 600 percent, according to recent Pike Research data. Half of the 565 gigawatts of clean energy installed in 2011 came from renewables, and Pike projects the worldwide clean energy market will grow to $300 billion by 208.  

Policy victories like the extension of the U.S Production Tax Credit (PTC) for renewables will help drive this growth. This will spill over into the 2013 discussion, as Pike notes that there is about 8 GW of planned wind construction that will continue over the next four to five years.

Renewable energy success will also depend on a break in partisan bickering, said Aaron LeMieux, founder and CEO of Tremont Electric. Speaking during a recent Pew Charitable Trust webinar, he said that Washington politics "makes it very, very difficult for our early stage companies to be able to really succeed" in renewable and clean energy markets.

The PTC can't go on forever, but the hope is that a gradual decline in credits will help foster a self-sustaining renewable energy market in the States.  

Smart meter debate endures

Smart meter technology continued its ascent in 2012 to becoming the default electric metering method. The most recent data from the U.S. Energy Information Association showed more than 37 million electric smart meters installed across the country. It's expected that utilities and regulatory commissions from California to Maine will continue working in 2013 to deploy and, in some instances, mandate the use smart meter devices.  

But while smart meters creep toward ubiquity, a fraction of customers remain uncomfortable with the technology, leaving policymakers with an impetus to craft some regulations and standards. The biggest issue is whether utilities should be required to offer "opt-out" programs for those customers who want to retain their old analog meters.

Opt-out programs have picked up steam lately in places like California, Texas, Nevada, Vermont and Oregon, among others. But such programs can be costly and cumbersome for utilities. Those fees are usually passed on to participating customers, but dealing with multiple meter types is still just one more thing utilities need to manage in their already packed daily operations.

In addition to opt-outs, Vermont and Maine are also revisiting smart meter health concerns. And while a recent report out of Vermont did not find any negative effects, health and safety of smart meters is poised to be a major sticking point of opponents.

Smart meter user data protection and privacy could also easily turn into front-burner issues in 2013, especially as analytics and data sharing initiatives like Green Button continue to blossom.

Regulators ratchet up pollution controls

Pollution and emissions standards look to be the most contentious energy policy issue for 2013. Few would argue against the benefits of clean air and water. But in the energy industry the concern is that new regulations from the U.S. Environmental Protection Agency (EPA) and others will force the premature retirement of coal-fired generation and create unavoidable grid strain and reliability issues. Specifically, the compliance with Mercury and Air Toxics Standards (MATS) and Maximum Achievable Control Technology (MACT) Standards will hit hard in 2013.

The EPA is losing Administrator Lisa P. Jackson, who has served since 2009, but it's not likely to lose momentum. Among its initiatives, the EPA is predicted to finalize research in 2013 on the relationship between hydraulic fracturing, the primary process behind extracting natural gas, and groundwater pollution.

It's unclear what will need to happen to get a nationwide clean energy standard. Thirty-nine states have some form of renewable energy or clean energy mandate, but sweeping clean energy legislation has repeatedly stalled in Congress, with two separate proposals failing in the last session. But Senators Lisa Murkowski and Ron Wyden are at least two lawmakers who are still fighting for a national standard.

"I'm just hopeful that if we all come to Washington and have a conversation about the opportunities and challenges that we can see legislation emerge either in this congress or the next congress," said Phyllis Cuttino, director of the Pew Clean Energy Program, during a recent web conference.