Coal, Executive Insight, Renewable Energy

Will White House’s QER Matter?

Issue 5 and Volume 20.

Editor in chief
TERESA HANSEN

The U.S. energy delivery infrastructure needs a lot of work, according to the first Quadrennial Energy Review (QER) released April 21 by the Obama administration. President Obama commissioned the report when he announced his Climate Action Plan in June 2013. A White House press release states the QER was commissioned to “examine how to modernize the nation’s energy infrastructure to promote economic competitiveness, energy security and environmental responsibility and take full advantage of American innovation and the new sources of domestic energy supply that are transforming the nation’s energy marketplace.”

The QER looked at more than just electricity delivery infrastructure. It includes oil and gas and transportation infrastructure, too. I’m not sure if the QER uncovered anything surprising in those areas, but the electricity infrastructure-related findings were no surprise.

The report concludes the obvious: Our energy landscape is changing dramatically, and the electricity delivery business is transforming quickly. The decline in coal-fired power brought on by environmental regulations, including the Clean Power Plan; the tremendous increase in the use of renewable energy sources, especially solar, which the report says has increased 20-fold since 2008; the need for a more resilient and reliable grid in light of increasing extreme weather events; the need to combat cyberattacks and cyberthreats; and the influx of new technologies require changes to the way we deliver electricity and the way we monetize and regulate it. The QER recoginzes these challenges and states transformation will not be easy or cheap.

The QER identifies some obvious challenges and emphasizes the administration’s stand on climate change: It is a threat and the challenges it creates are serious and must be addressed.

The QER goes beyond identifying vulnerabilities and challenges associated with grid transformation. The document recommends the federal government invest in the transformation by providing states with up to $350 million over five years to improve the electricity infrastructure. In addition, the QER recommends the federal government create policies and programs to increase cooperation among states to improve grid reliability.

In addition, the Department of Energy has requested $3.5 billion in federal funds over the next 10 years to support technology development, enhance grid security and provide technical support to facilitate the evolution toward a more flexible and modern grid.

Given that several recent studies predict the U.S. electricity grid will need $1.5 trillion to $2 trillion in investment before 2030 to continue to operate safely and reliably, a few billion dollars isn’t much.

The bright spot in the QER could be the conversations and actions it initiates from regulators and lawmakers, but will that be enough?