If you believe that elected officials don’t ‘get’ decentralized energy, this interview will make you feel better.
In Energy Changemakers’ first video podcast, Congressman Sean Casten, a Democrat from Illinois, describes a new bill he co-sponsored that addresses several problems facing decentralized energy, including interconnection delays and FERC Order 2222 shortfalls.
He understands these problems because he has experienced many himself. As co-founder of Recycled Energy Development, a cogeneration company, he built 80 distributed energy projects.
The barriers to distributed resources do not occur “because we’re waiting for engineers to come up with smart ideas. It’s that the incentives are wrong,” he says.
Casten wants to see US energy policy shift from putting producers first to putting consumers first, a goal of The Clean Electricity and Transmission Acceleration Act of 2023, which he co-sponsored with Rep. Michael Levin, a Democrat from California.
“Drill baby drill” favors upstream oil producers, and he says it’s been the US’ default energy policy. An equivalent example of pro-producer policy in the power sector is protecting the investor-owned utility rate of return.
“Would anybody say, I’m nervous about lowering grocery store prices because that would hurt our nation’s beef farmers? That would be an insane thing to say, right? And yet we have conversations in the energy sector all the time around, ‘If we allow people to invest in energy efficiency, it might create a utility death spiral,’” he says.
Utilities do need to be solvent and able to attract capital, “but there’s no reason why their economic interest should be misaligned with consumers’ economic interest,” he says.
Economic conflict, Casten says, is also at the heart of the long interconnection queues that are delaying renewable energy projects. He says about 2,000 GW now wait to be interconnected, most of it zero-carbon energy. To underscore the enormity of that figure, he points out that the US grid has 1,000 GW of generation.
The delays, he says, are not because of technical or safety issues — “It’s all a bunch of BS; it’s not that hard. But there’s an economic conflict.”
The bill directs FERC to undertake performance-based ratemaking as one means to overcome the conflict.
US energy policy also falls short in that it’s designed to maximize energy use rather than energy productivity, he says, citing the work of energy economist Skip Laitner.
The US economy generates about $200 of value for every million BTU of primary energy used. By comparison, the UK generates $360 per million BTU and Switzerland $600 per million BTU, he says.
‘If we could just get to the level of what the UK has already achieved, we would double the amount of wealth in the country without using a single additional BTU,” Casten says. “You can either look backward and be really depressed by that number or look forward and be really optimistic about the opportunities we have in front of us.”