Solutions, Part 2: Challenges in Implementation
“Insanity: doing the same thing over and over again and expecting different results.” Albert Einstein
In my last blog post I used www.thesolutionsproject.org to illustrate the benefits to moving to 100% renewable energy. The potential is really clear, and a surprisingly strong revelation. Knowing that NY state could save 22 billion dollars each year in health costs if we ceased burning fossil fuels should, in and of itself, make the case. And that is only one aspect.
So what is the issue? Why are we not already fully invested in RE solutions? Why is it so hard to get recycling programs to work, and why are there still architects out there that design buildings merely to meet the current energy code?
I see two main reasons. First, it is much easier and more comfortable to do what we know how to do. We meet minimum standards well. We do this for health, for education, for government, for codes. Our nature is to make sure we don’t break the law, yet the system of regulation and oversight invites us into a game playing mentality of “what can we get away with” and how little can we do and still be legal. “D for done”.
Second, we have identified many benefits and it is easy to say that investing “x” will be entirely paid back within six years, or seven, or one. Yet the reality is that the investor is rarely the recipient of the return benefits. Often the benefits are distributed, such as better air and water quality which then reduces health burdens for the full community, while one RE developer, or one municipality handles the concentrated investment in RE installation. This is the reality we are in.
We need a bridge, preferably many. We can either continue to do the same-old, same-old and hope, foolishly, for different results, or we can find ways to bridge between investments and benefits.
Government incentives are one simple way to bridge – pay developers, in essence, for their investment by reducing tax burdens or by flat-out paying them a boon for taking on unfamiliar investments risk. Be wary, as incentives can have a rebound effect and make it seem that perfectly viable technologies need a helping hand for viable implementation. They can also cause market issues when they sunset as they leave gaps in financial safety nets that a market sector may have become accustomed to benefiting from. Finally, we must remove incentives from the fossil fuel industry in order to even begin to see any sort of reasonable playing field. It is currently not level at all.
NYSERDA (NYS Energy Research and Development Authority) used to function nearly entirely on incentives but has recently altered their focus to remove obstacles and assist in development and market gains. They realized that incentives for energy efficiency is tough because the work itself has such a significant ROI (return on investment) that their incremental money was too little as well as too late, being paid out well after project completion.
We need partnerships, be they P3 (Public/Private Partnerships) or other collaborative endeavors. By having a variety of stakeholders invested in partnership and gaining the returns in partnership, we can bust the silos. These partnerships must address innovation and implementation of projects, and be formalized in clear, encompassing contract language. We need to take time to define the right collaborative parties and to understand the co-benefits and co-burdens thoroughly enough to craft solid, equitable agreements. And it is currently odd to consider pairing a community hospital with a RE developer (e.g.) but if the hospital can bank on reduced emergency care for asthma visits and then monetize that reduction related to the investment in funding for the turbine field, everyone wins on paper as well as in fact.
These two significant changes to our systems are not easy. They are not even simple. The goal is certainly simple: to clearly illustrate and achieve sensible ROI paths in order to quickly reach 100% RE. But there are many, many players in this work, and many existing obstacles we must address. Some can be systemically dealt with, such as NY state working to create power purchase agreement language for PV installations that can be readily used by any government entity, language that addresses the public realm issues with “contracting” for energy use and pricing over a time frame longer that the state budget parameter of one year. Others will have changes on a per project basis, like when an innovative health insurance company pays their staff for personal choices that keep them healthy, knowing their own business insurance costs will decrease.
We must also recognize this is not a switch on a wall. We are not fossil fuel users today and renewable energy users in our entirety tomorrow. The investments will come in various sizes, time-frames, and approaches. There will be scattered benefits that will certainly echo over years. An ROI of six years means that’s how long it takes to recoup the investment, and the benefits continue year after year after that. Many people don’t grok that facet: continuing savings.
Further, we can appreciate and build upon the fact that the transition time-frame provides us an element of safety. Our highway infrastructure will be viable for ICE (internal combustion engines) while it is viable for hybrid, CNG (compressed natural gas), electric, self driving, public bus transit, carpooling, etc. Our electric grid will not only support RE installations, but the RE investments reduce the strain of production on older fossil fuel using plants and help the system remain dependable for longer. Over time, so long as we know the end goal, we can adjust our system planning to achieve greater grid diversity and to support distributed generation. And benefit from the inherent safety in a transition period that will likely encompass a decade or two.
However, we do need to make the concentrated effort to connect investment dollars to savings across our siloed financial/business/development systems. This will require asking questions about what can be achieved. It will require collaboration and interdependence. It will require learning not just how to do things effectively in the short-term for greater gain, but how to blend the possibilities over time, working always toward the outcomes we seek.
Provide a bridge and be a partner. See you in the future,
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