Sunday, April 5, 2009

Austin Smart Grid: A Smart Social Experiment

A draft bill has been proposed by Representatives Waxman and Markley in the House entitled the The American Clean Energy and Security Act of 2009 (PDF). According to a summary of the draft bill, it would require electricity suppliers to meet 25% of their load with renewable energy sources by 2025. It also would include "provisions to facilitate the deployment of a smart grid". The draft bill also includes support for energy efficiency and mandates a carbon cap-and-trade scheme.

However, as reported by The Economist, this bill could be derailed by the heavy support for Senator Thune's "amendment to the Democratic budget that would prohibit the collection of funds from any future cap and trade proposal if that proposal would increase electricity rates and gasoline prices for American households and businesses."

The 89 to 8 vote for this amendment indicates two key issues for federal plans for energy regulation. First, the rising interest in reworking our energy infrastructure is being met by ever increasing concerns about its costs. The second issue highlighted by the introduction of this amendment is related to the policy process. This proposal is a very blunt political tool. How can a federal government that is stymied by simplistic policy analysis and policy tools filtered through a low signal to noise ratio from lobbying and interest groups ever devise a system that maximizes energy, environmental, and economic performance?

It's true that this problem engulfs the very system of government that we enroll - representative democracy - but I contend that this system is still likely the best around.

However, there is an alternative. I would like to share a very enlightening quote from Carl Sagan (in chapter co-written by Ann Druyan) in his book, 'The Demon-Haunted World: Science as a Candle in the Dark'.

"We face an abundance of subtle and complex problems. We need therefore subtle and complex solutions. Since there is no deductive theory of social organization, our only recourse is scientific experiment—trying out sometimes on small scales (community, city, and state level, say) a wide range of alternatives. One of the prerequisites of power on becoming prime minister in China in the fifth century B.C. was that you got to construct a model state in your home district or province. It was Confucius' chief life failing, he lamented, that he never got to try."

I'm disheartened by the environmentalist clammoring that we need to halt production in order to prevent the destruction of the earth. I'm equally dismayed by the reactionist declaring that we will destroy the economy by addressing environmental concerns. Some of this noise succeeds in getting the public-at-large interested in important issues, but much of this is just self-justification. I think it's wise to utilize analysis of actual examples when making policy decisions.

I think Austin is a great place to implement such a sample. One reason is because electricity rate changes may only have to go up to ERCOT. Also, devising a system that maximizes enviromental performance will be easier at the local level because, as Professor Webber noted in class, water supply is currently handled at the local level. Other previously mentioned advantages for Austin apply as well.

It's true that each city and region has it's own set of issues and adaptability to plans that improve our infrastructure to meet environmental and social goals. This would not be a true control test. However, one data point is better than none.

It's also true that incorporating current market externalities in this system and it's analysis will prove difficult - such as greenhouse gases. However, given the flexibility of Austin and the abilities of Austin's highly educated populace, we fare better at conducting this analysis than most places in the country.

I believe that until test cases prove successful, the role of the federal government should be to support cleantech and environmental research and development. In 'The Servitude of Power: Energy and civilization through the ages' the authors argue that throughout history, it is technology innovation that spurs complete reversal of exisiting infrastruture. New ideas are popping up all of the time.

The rigorous scientific method that usually accompanies science and engineering research and development should be adopted by public policy as much as possible. We should take note of each and every experiment including those in other countries, such as Chris Smith's recent research on efforts in the European Union. However, a test case of energy infrastructure that includes all of the tenants of a comprehensive plan - a smart grid, increased renewable energy generation, improved energy efficiency, and expanded environmental protection - right here in Texas, a home of lovers of liberty, would be very telling.

In conclusion, I propose that adopting an energy system of the future in Austin would be a wise social experiment that would inform us significantly before we roll out a new national energy plan.


David Wogan said...

The division between policy-making and engineering/science is a problem, but as we keep seeing in this class, there is ample room for contributions from both ends of the spectrum.

Ideamotor said...

I absolutely agree David. I'm a public policy student! There certainly are cases of this already, but I'd like to see more 'subtle and complex solutions' brought about through the public policy process. For example, the 20-20-20 scheme reportedly used in the EU is clearly too simple. Having worked at TCEQ in the enforcement and water supply divisions, I saw example after example of rules and regulations that were not founded on research and were too simple. Their simplicity lead to results that were nowhere near the intended effect.

I'm simply advocating that some public policy research is completed with tests in specific regions/areas in a similar process that would be used in science. To me it makes sense to make Austin a test case before we make the whole country an experiment.