Sunday, August 09, 2009

Delaware "on the brink of a new energy era"

A front page story by Jeff Montgomery in the News Journal points to new legislation, signed into law by Jack Markell, that will change Delaware's energy economy:
Newly approved conservation and clean-energy mandates have raised nearly insurmountable barriers to building more fossil-fueled power plants to supply utilities in Delaware or even importing a bigger share of fossil power, putting the state on the brink of a new energy era.
The measures require consideration of renewable-energy options before any new conventional power supplies can even be considered. They also require a 15 percent reduction in the amount of electricity sold by 2015 and a 10 percent cut in natural-gas use.
Are the new targets realistic? As I told Montgomery, I don't think we have to wait for future breakthroughs in technology to realize reductions in demand:
Many estimates fail to account for all benefits from conservation, Noyes said.
"I think the potential -- and it's not theoretical -- for reducing demand is such that we can, with current technology, reduce demand in a cost-effective way that would preclude the need to build any new capacity, and certainly not fossil-fuel capacity," Noyes said.
The story notes a recent McKinsey report (cited in this New York Times article) that describes how $520 billion in investment could reduce energy use by 23 percent by 2020 and return $1.2 trillion in cost savings. If McKinsey's numbers hold for Delaware, $1.4 billion in investment would return $3.2 billion in savings, and surpass the targets set in the new legislation. That would be a pretty good ROI and a significant boost to our economy, when you consider that Delaware's GDP was $49.2 billion in 2008. I know that raising the capital looks daunting, but a report by Environment Northeast, a non-profit think tank, projects that the American Clean Energy and Security Act (ACES or Waxman-Markey) would generate $627 million in energy efficiency investment in Delaware, and return $1,882 million in savings.

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