Clean Energy Standard Act of 2012

Measure To Drive Cleaner Electricity Generation in America’s Power Sector

March 1, 2012

Chairman Jeff Bingaman (D-NM) today introduced legislation to modernize our nation’s power sector and guide it toward a future in which more and more electricity is generated with cleaner and cleaner energy.

The Clean Energy Standard Act of 2012, or CES for short, employs a straightforward, market-based approach that encourages a wide variety of electricity-generating technologies.  It sets a national goal for clean energy and establishes a transparent framework that lets resources compete based on how clean they are, then gets out of the way and lets the market and American ingenuity determine the best paths forward.

Bingaman said that the CES seeks to make sure that “as we continues to grow and power our economy, we leverage the clean resources we have available today, and also provide a continuing incentive to develop the cheaper, cleaner technologies that we’ll need in the future.  We want to make sure that we drive continued diversity in our energy sources, and allow every region to deploy clean energy using its own resources.  And we want to make sure that we do all of this in a way that supports home-grown innovation and manufacturing and keeps us competitive in the global clean energy economy.”

Bingaman’s design for the CES draws on extensive Energy Information Administration (EIA) modeling done at his request last year, and EIA’s results showed that a properly designed CES would have almost zero impact on GDP growth, and little to no impact on national electricity rates for the first decade of the program.

Under the plan, all generators of clean energy are given credits based upon their carbon emissions; greater numbers of credits are given to generators with lower emissions per unit of electricity.  This flexible framework naturally allows a wide variety of sources (solar, wind, nuclear, natural gas, coal with carbon capture and storage, etc.) to be used to meet the standard, allows market forces to determine what the optimal mix of technologies and fuels should be, and makes it easy for new technologies to be incorporated.

To be considered “clean,” a generator must either be a zero-carbon source of energy, like renewables and nuclear power, or have a lower carbon intensity than a modern, efficient coal plant.  (Carbon intensity means the amount of carbon dioxide emitted per megawatt-hour of electricity generated.)  Accounting for “clean” this way means that the cleanest resources have the greatest incentive, and also that every generator has a continuing incentive  to become even more efficient.

In addition to driving cleaner electricity generation in the power sector, the CES also rewards industrial efficiency.  Combined heat and power units generate electricity while also capturing and using the heat for other purposes.  These units are treated as clean generators under the CES.  This will help deploy this kind of efficiency and provide another source of inexpensive clean energy.  All that the CES requires is that the generation we do use (and add to our fleet) gradually becomes cleaner over time.

It’s important to point out what the CES does not do.  It does not put a limit on overall emissions.  It does not limit the growth of electricity generation to meet the demands of a growing economy.  All that the CES requires is that the generation we do use and add to our fleet gradually becomes cleaner over time.

Also, the CES does not cost the government anything, and it doesn’t raise money for the government, either.  If any money does happen to come into the Treasury as a result of the program, it goes straight back to the particular state from which it came, to fund energy efficiency programs.

“The goal of the CES is ambitious – a doubling of clean energy by 2035.  But analysis has shown that the goal is also achievable and affordable.  Meeting the CES will yield substantial benefits to our health, our economy, our global competitiveness and our economy,” Bingaman said.

Several of Bingaman’s colleagues are co-sponsoring the bill, including Sens. Wyden (D-OR), Sanders (I-VT), Mark Udall (D-CO), Franken (D-MN), Coons (D-DE), Kerry (D-MA), Whitehouse (D-RI) and Tom Udall (D-NM).  Links to the bill and other related documents are found on the Senate Energy Committee website.  Join the conversation on Twitter via #CESBill.

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