G20 Nations Commit to Phase Out Fossil Fuel Subsidies
The 20 leaders of the world’s top industrialized nations, as well as key countries with developing economies, agreed to phase out their subsidies for fossil fuels.
In a concluding statement from the Group of 20 (G20) Summit-held in Pittsburgh, Pennsylvania, on September 24 and 25-the nations’ leaders agreed to "phase out and rationalize over the medium term inefficient fossil fuel subsidies."
The G20 leaders also called for targeted support for poor people that would be impacted by higher prices for fossil fuels. The leaders noted that "inefficient" fossil-fuel subsidies "encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources, and undermine efforts to deal with the threat of climate change."
According to President Obama, the agreement will ultimately phase out nearly $300 billion in global subsidies for fossil fuels. And as noted in a White House fact sheet, the Organization for Economic Cooperation and Development and the International Energy Agency estimate that eliminating fossil fuel subsidies worldwide would cut global greenhouse gas emissions by 10% or more by 2050. See the leaders’ statement, President Obama’s remarks, and the White House fact sheet (PDF 56 KB).
According to a new report from the Environmental Law Institute (ELI), the U.S. has a long way to go in phasing out fossil fuel subsidies. The report reviewed fiscal years 2002-2008 and found that fossil fuels benefited from about $72 billion in subsidies over the seven-year period, while subsidies for renewable energy and fuels totaled only $29 billion. Of the fossil fuel subsidies, $70.2 billion went to traditional sources such as coal and oil, while $2.3 billion went toward carbon capture and storage. In addition, over half of the renewable energy and fuels subsidies went to corn-based ethanol. See the ELI press release and the full study (PDF 2.3 MB).
California Accelerates its Pursuit of Clean Energy
California’s commitment to renewable energy and energy efficiency got two major boosts recently. For renewable energy, Governor Arnold Schwarzenegger signed an executive order on September 15, requiring the state’s utilities to get a third of their electricity from renewable energy sources by 2020.
The state currently has a 20% renewable power requirement by 2010 for investor-owned utilities only, but the executive order extends and increases that mandate, while also expanding it to include public power utilities and other electricity providers.
The governor’s directive calls for the California Air Resources Board to adopt new regulations to implement the renewable mandate by July 31, 2010. Three years ago, Governor Schwarzenegger signed a bill to achieve a 25% cut in statewide greenhouse gas emissions by 2020; the new renewable energy requirement will help to meet that goal. See the governor’s press release.
California also launched the largest investment in energy efficiency ever made by a state., On September 24, the California Public Utilities Commission (CPUC) approved a $3.1 billion slate of ratepayer-supported energy efficiency programs for 2010-2012. The effort will be administered by California’s investor-owned utilities, including Southern California Edison, Pacific Gas and Electric Company, San Diego Gas and Electric Company, and the Southern California Gas Company.
One of the elements is the nation’s largest home retrofit program. Under the California Statewide Program for Residential Energy Efficiency, the state aims to achieve a 20% energy savings for up to 130,000 homes over a three-year span.
The CPUC will also provide $175 million to encourage construction of net zero energy homes and commercial buildings. The funding will help with design assistance, incentives for new buildings that exceed the state’s energy code, and R&D for new energy technologies.
In addition, the CPUC program sets aside $260 million for 64 cities, counties, and regional agencies, targeting retrofits of public buildings as well as leading-edge energy efficiency opportunities. See the CPUC press release and the related fact sheet (PDF 30 KB).
HUD Grants $300M in Recovery Act Funds for Green Housing
The U.S. Department of Housing and Urban Development (HUD) awarded $300 million in ARRA competitive grants on September 18. The grants will allow 36 public housing authorities across the U.S. to create energy efficient communities through the substantial rehabilitation of existing public housing developments or through the construction of new ones. Housing authorities in 24 states, plus the District of Columbia, will receive the HUD funding. The goal is to create public housing that conserves energy and encourages more healthy lifestyles.
Overall, $600 million in Recovery Act funds will go towards creating public housing communities that achieve improved environmental performance through such measures as meeting Energy Star standards for new construction and using renewable energy resources. The funding is designed to help reduce energy use, generate energy savings for housing authorities and their residents, and reduce greenhouse gas emissions. HUD is expected to award the remaining funds in the coming weeks. See the HUD press release (MS Word 87 KB).
DOE Delivers $106M for Energy Efficiency in 9 States
DOE delivered over $106 million in ARRA funds on September 24 to nine states to support energy efficiency and conservation activities. Under DOE’s Energy Efficiency and Conservation Block Grant (EECBG) program, they will implement programs that lower energy use, reduce carbon pollution, and create green jobs locally. States receiving funding are Delaware, Hawaii, Indiana, Iowa, Massachusetts, Oklahoma, Tennessee, Vermont, and Virginia.
The awards to the state energy offices will be used to support state-level energy efficiency priorities, along with funding local conservation projects in smaller cities and counties. At least 60% of each state’s award will be passed through to local cities and counties not eligible for direct EECBG awards from DOE. The EECBG Program was funded for the first time by the Recovery Act and provides formula grants to states, cities, counties, territories, and federally-recognized Indian tribes nationwide to implement energy efficiency projects locally.
Projects eligible for support include development of an energy efficiency and conservation strategy, energy efficiency audits and retrofits, transportation programs, creation of financial incentive programs for energy efficiency improvements, development and implementation of advanced building codes and inspections, and installation of renewable energy technologies on municipal buildings.
For example, Massachusetts will use a portion of the $14.75 million to help share its Energy Information Reporting System with each of the commonwealth’s 351 local government units, enabling them to establish energy-use baseline inventories for their buildings, vehicles, and street lights. And Hawaii will focus a substantial part of its $9.59 million on upgrading the state’s existing buildings to meet Energy Star standards. For a full list of awards to date, visit the Energy Efficiency and Conservation Block Grants Program. Read the DOE press release.
Recovery Act Helps Fund Transmission Line for Montana Wind Power
DOE announced on September 16 that a major transmission line to carry power from proposed wind power facilities near Cut Bank, Montana, will draw on funding from the ARRA.
The Western Area Power Administration will use its borrowing authority under the Recovery Act to help build the $213 million Montana-Alberta Tie Limited (MATL) transmission project between Great Falls, Montana, and Lethbridge, Alberta. Almost two-thirds of the 214-mile transmission line will be located on U.S. soil, allowing for continued expansion of renewable energy production. Western will provide up to $161 million of the project costs through its borrowing authority under the Recovery Act, allowing construction to begin this fall.
The 230-kilovolt MATL transmission project is scheduled to be energized in early 2010. It will be capable of carrying 300 MW of power in each direction from the proposed wind facility near the state’s northern border, delivering up to 600 MW of wind power, enough to power 300,000 average U.S. homes. In mid-September, Montana Governor Brian Schweitzer cemented a deal for NaturEner USA to build an $800 million, 300-megawatt wind facility to take advantage of the new transmission line. See the DOE press release, the MATL Web site, and the governor’s press release.
Meanwhile, TransCanada is proposing to build two 500-kilovolt direct-current transmission lines to carry power from south-central Montana and southeast Wyoming to a point south of Las Vegas, Nevada. The Zephyr and Chinook projects will enable development of over 6,000 MW of wind power, delivering it from high-quality wind resources in Montana and Wyoming to markets in Arizona, California, and Nevada.
The company will open the planned transmission capacity to bidding by potential project developers in mid-October. TransCanada intends to push ahead with the transmission line projects if it receives sufficient firm commitments from developers looking to take advantage of its planned transmission capacity. See the TransCanada press release (PDF 46 KB) and Web site.
Agriculture Department Grants $62.5M for Clean Energy
The U.S. Department of Agriculture (USDA) awarded $62.5 million in loans and grants on September 24 to 705 renewable energy and energy efficiency projects in 45 states and Puerto Rico. The loans and grants were made under the Rural Energy for America Program (REAP), an initiative to help rebuild and revitalize rural areas. REAP loan guarantees and grants can be used for renewable energy systems, energy efficiency improvements, feasibility studies, and energy audits. See the USDA press release and the REAP Web site.
DOE to Test AeroSys Products to Ensure Standards Compliance
As part of its renewed efforts to ensure compliance with national energy efficiency appliance standards, DOE issued a test notice on September 24, requiring AeroSys, Inc. to provide sample air conditioners and heat pumps for laboratory testing by DOE. The test notice, issued under federal regulation 10 CFR 430.70, requires AeroSys to make test samples of certain AeroSys-manufactured air conditioners and heat pumps available to DOE at its own expense. The agency will then determine whether the products comply with applicable DOE energy standards, which are designed to strengthen efficiency levels for various appliances, save money for consumers, and reduce greenhouse gas emissions. DOE issued a subpoena to AeroSys on July 24.
"In response to our subpoena, AeroSys provided confidential certification test data that claimed to show standards compliance for seven of its basic models," said DOE General Counsel Scott Blake Harris. "But we concluded that the AeroSys data left open questions about whether their products fully comply with all of the relevant energy efficiency standards. As the next step in the process, we will be testing the products ourselves to ensure that these appliances meet national energy efficiency standards." See the DOE press release.
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EREE Network News is a weekly publication of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE).
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