speech national energy issues of substance

QUANTUM UTILITY GENERATION

Presentation – White & Case Energy Forum

By Larry Kellerman

November 8, 2012

A Challenge and an Opportunity for the Next 4 Years

Turning the DOE into Something That Matters

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Energy is Central to Our Nation’s Success

ENERGY

…and it is time our political leaders embraced this proposition

THE ECONOMY NATIONAL SECURITY

THE ENVIRONMENT


We Need a Real National Energy Policy and a DOE to Design/Implement It

Reconcile the fact that there hasn’t been a real NEP since the Carter Administration, and one can argue that there has not been a hugely impactful Energy Policy since the Roosevelt Administration

Elements in a National Energy Policy must all align with a central proposition: what is best for the country in the decades to come

Federal oversight, design and planning must have a role in 21st Century Energy Policy

“All of the above” is not a policy. It is fundamentally an admission of lack of focus on the problem

Central questions to address: Definition of objectives:

– lowest system-wide cost to consumers and industry– minimized environmental footprint– greatest contribution to the economy of the United States and to our security

We have four fuel types in abundance. Which do we wish to encourage/discourage?– Natural gas– Renewable energy (wind and solar)– Coal– Uranium

What is the government’s role in encouraging the efficient use of the energy we have?

Most importantly, define what the energy infrastructure of this country “should be” in 20 years and initiate policies and programs to get us there


We Need to Re-Examine and Role and Mission of the DOE

While the DOE’s mission is multi-modal, the agency has been ineffectual in shaping our nation’s energy future

The current version of the DOE sees its mission at least in part as funding some projects and technological initiatives that otherwise would not have funded At the same time, they also have funded other projects and initiatives that would have received

conventional financing, albeit at a higher cost, even without government support

How about something along the following lines as a mission for the DOE: Defining and implementing national policies and priorities that facilitate gaining the U.S. a long-

term strategic advantage by securing clean, cheap and reliable energy resources

The DOE can be an effective and functional part of a national energy strategy facilitating clean, low cost energy that is made here, used here and gives this country a real leg up on our international competition for energy-dependent jobs

DOE’s leadership today is characterized by an intelligent technocrats who views DOE’s mission as stimulating the advancement of paradigm- shaping technologies Solyndra, A123 and other failed DOE “investments”

are not the problem – they are a symptom of DOE’s self-definition


DOE’s Own View of Its Mission Today: What Is Missing?

Catalyzing the timely, material and efficient transformation of the nation’s energy system and securing U.S. leadership in clean energy technologies

Maintaining a vibrant U.S. effort in science and engineering as a cornerstone of our economic prosperity with clear leadership in strategic areas

Establishing an operational and adaptable framework that combines the best wisdom of all Department stakeholders to maximize mission success


An Alternative View: We Have the Technology, We Don’t Have the Policy

Solar energy is grid-competitive in large swaths of the country, and with every passing month is getting more competitive

Long-term wind contracts have been signed at less than the delivered fuel cost of over half the coal plants in this country

Smart grid technologies are readily available and implementable today that enable effective management of loads and the reduction of both peak and energy demand of ~ 15%

Technologies exist to convert every type of fuel we have access to in the country, whether natural gas, sunlight, wind, coal or uranium, into clean power

We don’t need the Department of Energy to pick technology winners and losers

We need the Department of Energy to define a sustainable path for this country to achieve low cost, low environmental impact and highly reliable energy for many decades to come

We need the public sector to do what the private sector either cannot do or cannot do well


What Real Energy Policies, Implemented Effectively, Have Created


Important Things A Reinvigorated DOE Could Do Today

Designing a plan for intelligently weaning the renewables sector off of subsidies over a realistic timeframe

Designing a set of policies to materially reduce our reliance on oil/imported oil

Integrating tax policy with energy policy to encourage the right societal actions

Initiating a thoughtful dialog on how utilities are regulated and how the rate base model can evolve

Putting teeth behind consumptive use efficiency standards similar to the teeth behind CAFE

Defining the role and designing a path for nuclear energy in the nation’s future

Recommending to Congress which resources are too important to our future to export

Taking a much larger role in the debate around market power/market concentration issues

Defining with greater clarity who is responsible for electric power system reliability, especially in “competitive markets”

Championing the role of cogeneration and efficient energy production and use, and crafting recommendations related to the viability of a PURPA for the 21st Century

Educating the public on the choices facing the nation on the energy front and how that translates into personal behaviors, costs and outcomes


Energy Policy Should Not Be A Partisan Issue

Energy policy has been ignored for too long by both sides of the aisle

Designing and implementing a durable energy policy is an initiative that all sides should be able to agree upon

If we as a nation do not take a proactive, assertive role in defining our energy future, we are walking away from a once in a generation opportunity: To capture the benefits of now-available technologies To leverage our abundant domestically produced fuels To replace significant vintaged infrastructure with something better

The next Administration can change our nation’s future for the better It may need a push from all of us to help it along

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