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In Pursuit of Renewable Energy, Don’t Lose Focus on Efficiency and Reduction of CO2 Emissions, Carnegie Mellon Economist Tells Congress

Author:Mark D. Burd 412-268-8436

Release Date: Feb 18, 2009

                 PITTSBURGH—As the U.S. Congress considers legislation that would require electricity providers to obtain mandatory percentages of their power supplies from renewable energy resources, one leading energy economist from the Tepper School of Business at Carnegie Mellon is urging policymakers to think beyond just solar and wind power as the most effective and environmentally friendly path toward a “green” energy supply.

                 In testimony to the U.S. Senate Committee on Energy and Natural Resources, Professor Lester Lave stated that singling out renewables such as wind and solar power as the sole solution is not the wisest or most effective course of action. Instead, he urged policymakers to allow multiple alternative technologies – including renewables – to compete to improve environmental quality, increase energy security and sustainability, and lower electricity prices.

                 “Until bulk electricity storage is possible, integrating more than 15 percent of wind and solar power into the system will be costly and could compromise reliability,” said Lave, who serves as the Harry B. and James H. Higgins Professor of Economics and Finance and Professor of Engineering and Public Policy at Carnegie Mellon.

                 Already, renewables account for almost three percent of U.S. electricity production, and will likely surpass the Senate Committee’s proposed four percent target by 2011, according to industry analysts. By Lave’s account, while this trend is a positive development, it leaves the critical issue of carbon only partially addressed. “Putting all of our time and energy into renewables leaves 80 percent or more of our electricity supply untouched by legislative actions related to the environment and national security, but the reality is that, without CO2 controls, we will run out of atmosphere before we run out of fossil fuels,” he said.

                 Lave also recommended that the definition of efficiency should be tightened to include such areas as distributed generation and combined heat and power, and that existing limits on the contributions of energy efficiency be lifted so that regions with scant wind and solar resources can meet proposed legislative goals at a lower cost. “The energy efficiency accomplishments in states such as California and New York show vast potential, even greater than the likely contribution of renewables,” he said. Lave also pushed for additional research funding regarding solar photovoltaic power and bulk electricity storage, rather than simply subsidizing the deployment of a potentially ineffective and costly system of energy distribution.

                 Professor Lave is a leading energy economist whose research in areas such as environmental quality and risk management has been extensively published by leading journals, including Journal of Risk and Uncertainty, Issues in Science & Technology, The Electricity Journal and Environmental Science & Technology. He heads both the Electricity Industry Center and Green Design Institute at Carnegie Mellon, and is a recipient of the Distinguished Achievement Award of the Society for Risk Analysis. He has also been a member of the Environmental Protection Agency’s Science Advisory Board since 1986. 

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