July 7, 2008
Series Editor: Ian Parry
Managing Editor: Felicia Day
Assistant Editors: John Anderson and Adrienne Foerster
Welcome to the RFF Weekly Policy Commentary, which is meant to provide an easy way to learn about important policy issues related to environmental, natural resource, energy, urban, and public health problems.
Meeting ever-rising demand for electricity, as the U.S. population and real income continue to grow, implies a steady expansion in electricity distribution infrastructure and the number of power plants. As discussed in this week’s commentary by RFF Fellow Shalini Vajjhala, for this expansion to occur smoothly, it is critically important that policymakers address various obstacles to siting new energy infrastructure at the local level. This issue will be even more pressing if existing coal plants are retired prematurely, or if the fleet of nuclear power plants is expanded, as a way of cutting greenhouse gas emissions from the power sector.
Over the summer, commentaries will be posted once every two weeks. In the next commentary, Gilbert Metcalf will discuss energy subsidies in the federal tax code.
Opposing the Chicken or Opposing the Egg?
New Challenges in Siting Networked Energy Facilities
Shalini P. Vajjhala
Everyone is talking energy these days. With record-high oil prices and the looming prospect of a price on carbon, citizens and policymakers alike are calling for major changes in our energy systems. Some are pushing for a large-scale shift to renewable energy resources while others are calling for expansion of existing low-carbon technologies, like nuclear power. And still others are looking to entirely new technologies, like geologic carbon sequestration, to reduce greenhouse gas emissions and meet demand.
|Change is in the air but what is not clear is where that change will show up on the ground. Everyone seems to agree that, as a whole, our nation’s energy infrastructure is in need of upgrading at minimum and complete restructuring at the other end of the scale. But the process of siting, or finding locations for specific facilities on the ground, remains a daunting challenge. There is little agreement on what the energy future should look like, especially locally, and protests continue to rage against new projects. Even if there is broad support for change, it is not certain that there will be support for any given project. Take, for example, Cape Wind in Nantucket Sound. This proposal, for 130 wind turbines off the coast of Massachusetts, has moved slowly through years of regulatory reviews and high-profile opposition, most notably that of the Kennedy family.
The Cape Wind project is an extreme example of the types of siting difficulties that can plague energy projects. More commonly, there are three main causes of siting difficulty that affect a wide range of energy facilities: environmental barriers, regulatory roadblocks, and public opposition. Environmental conditions, such as inhospitable terrain, are often dealt with quietly, early on in a project’s design and proposal phases. In contrast, public opposition is the siting hurdle that receives the most attention, because it frequently arises after a project proposal is submitted for regulatory approval. Moreover, opposition can extend project timelines from a few years to decades or block projects altogether.
Shalini Vajjhala is a Fellow at RFF. She studies the social impacts of large-scale physical and economic phenomena.
The seriousness of the problem is evident in the acronyms that are now synonymous with public opposition and siting difficulty: NIMBY (not-in-my-backyard) to BANANA (build-absolutely-nothing-anywhere-near-anything). In the midst of this siting alphabet soup, it is often overlooked that people generally oppose a project’s location, not the service it provides. In fact, we demand that electricity and transportation fuel be widely available and extremely reliable whenever we want to flip a switch or fill up the tank. We just don’t want to look at the power plants and refineries that provide these services.
This is especially true for the networked infrastructures -– power lines and pipelines -– that support the services that everyone wants but no one wants to look at. These “hinged infrastructures” face unprecedented siting challenges. As the push for energy system transformation has grown stronger, opposition to different types of energy facilities has also strengthened. Opponents of a specific project or a new technology now have the option of opposing a project itself, and then if that fails, they can oppose the power lines or pipelines that connect the project to a larger network, effectively stifling the entire project at a key choke point –- the link to the network. In the case of Cape Wind, opponents of the project split their attention among the impacts of the wind turbines, the cables buried in the seabed to carry electricity to the shore, and the power lines on land.
The chicken-and-egg relationship between energy facilities and the networks that support them has evolved recently, in the wake of industry deregulation. Electric utilities are no longer vertically integrated as they once were. Now separate companies manage generation, transmission, and distribution assets. This means that large-scale generation capacity additions and upgrades to the grid as a whole are no longer evaluated jointly. Instead additions are considered on a facility by facility basis. Without existing power lines, many projects are unlikely to cross the threshold of economic viability, and without adequate generation capacity in place to justify new transmission construction, investment in new lines also is unlikely to occur.
A House of Cards
This piecemeal approach to expanding and upgrading our energy networks has profound implications for making any large-scale shift to new resources or technologies. Major energy facilities are constrained by the different fuels they use, and resources are located in very different places -– with different tradeoffs. For example, a site that would support 100 MW of wind power will not likely be the same spot that would most effectively produce 100 MW of solar power, or the same size as one that would support most cheaply a coal plant with carbon sequestration. Therefore, developers cannot easily switch projects or sites. In other words, Cape Wind will never become Cape Coal to keep the lights on in coastal Massachusetts.
As a result, opponents to local energy projects are faced with few clear tradeoffs: if they win, they keep their beautiful views and their reliable power, while developers find other sites or projects. But eventually, something will have to give. Before this happens, policymakers must work to realign our energy network priorities to smooth joint siting processes for primary facilities and secondary network infrastructure, ranging from power lines for renewables and pipelines for CO2 sequestration, especially in areas that are isolated from existing grids.
The Energy Policy Act of 2005 made some encouraging early steps in this direction with mandates to develop integrated energy corridors on federal lands in the western United States and National Interest Electric Transmission Corridors across the country. However, implementation of these mandates and the resulting corridor designations has generated controversy and opposition in and of themselves. Despite setbacks, these and other initiatives to identify publicly acceptable solutions to coordinated network development are critical. Without them, the push for energy system transformation, no matter how strong, could grind to a halt with local opposition to either the chicken or the egg.
Views expressed are those of the author. RFF does not take institutional positions on legislative or policy questions.
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