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The Obama Administration recently rolled out a final version of its controversial Clean Power Plan (CPP) regulation to combat global warming over the next two-plus decades. On Aug. 24 President Obama outlined a series of executive actions in support of the plan in a speech at the National Clean Energy Summit held in Las Vegas.
The U.S. Environmental Protection Agency (EPA) has released the final rule on the Clean Power Plan (CPP), which calls for sweeping curbs on carbon pollution in the U.S. while promoting clean technology substitutes such as renewables.
These actions are in preparation for the UN Climate Change Conference commencing on Nov. 30 in Paris, France. Embodied in the Clean Power Plan is a national commitment to move away from existing coal-fired power plants in order to create a “Clean Energy Economy” for the U.S.
The Clean Power Plan aims to cut carbon dioxide emissions from existing power plants by some 32 percent by 2030. The EPA rule will require all 50 states to make their own cuts in carbon emissions by switching from coal-fired electric generation plants to natural gas generation, adopt “clean energy technologies” like solar, wind and geothermal and increase overall energy efficiency while reducing energy waste. View the White House statement on the President’s executive actions in support of the CPP.
In addition to executive actions at the federal level involving the EPA, DOE, FHA and DOD agencies, state initiatives in conjunction with foundations and private sector partners are critical to the plan’s success going forward. All low-carbon technologies can play a role in states’ responses in order to meet their carbon emission target reductions.
Each state has the flexibility to develop regulatory and incentive plans to achieve their specified target reduction, with some states having to reduce emissions by more than 50%.
Reductions must begin by 2022. States can earn early credit for efficiency programs targeted at low-income families by 2020-2021. States unwilling to create their own plan will be required to follow the national model for reducing emissions, which includes a cap-and-trade program. In the process, the goal is to increase the share of renewables in the national energy mix by 20% over the next 15 years.
Winners & losers
Like any big government plan, there will be winners and losers. One obvious casualty will be the U.S. coal industry, which is already in serious decline. (Various forms of community and worker assistance are planned for coal-dependent state and local economies.) As legacy coal is targeted, the solar industry receives heavy promotion and funding under the President’s initiatives.
Distributed solar energy is growing fast, adding jobs 10 times faster than the rest of the economy. According to SEIA, the Solar Energy Industries Association, the U.S. solar industry grew over 34% from 2013 to 2014, with 7,000 MW of installed solar capacity. Going forward, distributed solar PV is going to be a very good industry to be involved with!
Other renewables (wind and geothermal) as well as additional proven and emerging clean technologies to reduce carbon emissions and save energy, are also big winners.
The geothermal heating and cooling industry, which Bosch has a vested interest in as a manufacturer of ground source heat pumps, is poised to take off, and this is with or without a renewal of the 30% federal tax credit at the end of 2016. The geothermal industry is aiming to make GSHPs a mainstream technology over the next decade.
Ground source heat pumps are recognized by the EPA as one of the most energy efficient, environmentally clean, and cost-effective space conditioning systems available. Globally, the geothermal heat pump market is forecasted to grow at a compounded annual growth rate of over 15% from 2015 to 2019.
As part of the President’s executive order, over 10 billion dollars in loan guarantees will be earmarked for distributed energy projects using innovative technology. A new Interagency Task Force to Promote a Clean Energy Future for All Americans will be created and will draw on local governments, utilities and businesses to drive greater energy efficiency to more than 300,000 low-moderate income households across America.
This is needed because greater reliance on clean technologies will increase the cost of energy, which will impact everyone but lower income households the most.
To help alleviate that impact, the Obama Administration is making a $220 million investment in partnering with states and community organizations to help identify opportunities to improve energy efficiency and “scale up the deployment of renewable energy sources” in these communities.
Opportunity for the industry
This represents a big opportunity, as do other elements in the President’s executive actions, for the HVAC industry to seize upon, stretching across the entire industry — from manufacturers and distributors, to engineering firms and of course installing contractors.
The industry is well along in providing energy efficiency — and hence energy savings — in our products and systems, whether it be in boilers and furnaces, pumps, unitary products, VRF, smart controls and others. And in doing so we provide the high degree of comfort our customers enjoy year-round.
The movement away from fossil fuels is well under way and use of renewables and other smart energy technologies will become more main-stream in the years ahead. We all understand, pragmatically, that fossil fuels will be with us for a number of years into the future; there is so much more carbon energy being discovered due to discovery and extraction technology advances. But reducing our overall dependence on coal and oil is indeed happening.
Cleaner burning natural gas, now in abundance, is seen as a “bridge” fuel to a different energy future that places a greater reliance on renewable forms of energy.
The next administration may not share President Obama’s concerns over climate change, coupled with his dedication to climate care, to the same degree, and it may even work to slow down the paradigm shift to a clean energy economy. But with so much in motion, and with climate concerns growing every year, the transition is unstoppable. The HVAC industry has a big part to play in delivering that future to our children.
Mark Stimson is director of business development for Bosch Thermotechnology NA. Bosch Thermotechnology is a private industry partner under the President’s executive actions in support of the Clean Power Plan and will commit a portion of its sales force to assist low-income communities, as well as extreme climate communities where energy resiliency is critical, in improving the energy efficiency of their buildings, with a special focus on schools.