Old Myths Hinder U.S. Green Investment While European Banks Step Up

By Jane Twitmyer

The European Investment Bank, after an eight-month consultation with over 80 industry groups, decided it will no longer finance coal, lignite, and oil-fired power stations. A new World Bank directive says, “Ninety percent of our future engagement will be in the areas of renewables, energy efficiency and grid networks.” Both banks know that investment choices matter.

Here in the U.S., we know the damage fossil energy is causing. Ninety-seven percent of our scientists agree that we are endangering our future by continuing to spew heat-trapping greenhouse gases into our atmosphere. Yet myths from the fossil industry tell us that we can’t decarbonize the economy because current technology can’t provide reliable power, or that the transition to renewable energy will kill our economy while they continue to misrepresent our scientists’ stunning consensus regarding the facts and effects of global warming.

The longstanding myth that "wind and solar are unreliable" has now been roundly debunked by engineers at Stamford and DE. Their new reports describe a not too distant future supplied by more than 90 percent renewable energy. No new technology is required and very little storage. Their future requires only that a variety of renewable production sources be interconnected over a geographically widespread area. It sounds similar to the grid interconnections we already have.

"Government rules will kill the economy" has become an entrenched myth over the past 30 years. When the EPA began again to enforce the Clean Air and Clean Water Acts, the "rules myth" became attached to fossil energy production. Today, regardless of EPA rules, substantial investment is required to upgrade our electric power plants. A majority of King Coal’s facilities are 30 to 50 years old.

Most of those old coal plants have no pollution controls, meaning that as long as they are operating, we live with the documented health effects of asthma in our cities, environmental degradation on our mountaintops, mercury in our fish, and growing freshwater shortages. Replacing these "clunkers" offers a great opportunity for our banks to direct investment monies away from new long-term fossil projects.

Finally, the "its too expensive" myth is based on false numbers. Coal and gas electricity prices only look cheap because a lot of fossil mining and burning costs are paid for in our healthcare bills and with our taxes. If those costs were charged where they belong, coal-fired electricity would cost anywhere from 9 to 27 cents more per kilowatt-hour.  False numbers also fuel the low price of natural gas. Fracking technology was given a pass from clean air and clean water regulations in 2006.

These fossil fuel-created myths protect central utilities as well as the fossil fuel industries. When an individual customer uses 10 percent less electricity, that customer creates a 22 percent reduction in required production at the plant for that customer. The difference is based on the inefficiency of central plants as they convert fossil resources into electricity, and to line losses that occur distributing that electricity. To counter this frightening drop in demand, the utilities minimize the potential of building efficiency and lobby to maintain roadblocks to on-site production in order to protect their "centralized producer" business structure.

McKinsey, ACEEE and Bloomberg Energy Future and a new Carbon War Room report all predict central grid demand can be reduced up to 30 percent through retrofitting our buildings. Deutsche Bank estimates that “$289 billion worth of investment would produce savings in excess of $1 trillion in the U.S.” In other words, every dollar invested in building efficiency will produce three dollars worth of savings. Building owners just need readily available retrofit dollars.

Every rooftop solar producer or community energy project also creates a reduction in central grid requirements, so when our Department of Defense opts for base energy independence as a security measure, they are creating a major reduction in central grid demand. As the DOD and other on-site renewable energy producers grow toward their 25 percent potential and grid demand is reduced, the business model of our central utilities begins to look very different.

Four years ago, President Obama required the auto companies to rethink their designs and meet higher café standards. In exchange for the promise of design changes, the companies received substantial financial support from the government. The bargain turned out to be a win-win-win-win for the government, the car companies and the people they employ, and for the earth we live on.

Today, our major banks continue to be backstopped by the Federal Reserve. In exchange, let’s require the banks to invest a portion of their funds into upgrading the grid and financing renewable production facilities, creating a set of Green Banks. Let’s also remove the federal roadblocks to PACE, giving lots of building owners the ability to easily become energy producers and to earn those Deutche Bank-sized savings. As the Europeans know - where we invest matters.

Jane Twitmyer is a renewable energy consultant and advocate who has attempted to work in Virginia, a state whose renewable energy policies are, so far, mostly window dressing.

[image credit: Earl: Flickr cc]