PCAP’s Common Ground Series

This paper is one in a series of issue briefings the Presidential Climate Action Project is preparing for the presidential candidates and the next president’s transition team on issues where there is potential for bipartisan cooperation.


The United States has reached an inflection point in its energy mix and the infrastructure necessary to support it. Several disruptive forces are at work. We are being pulled toward a cleaner energy economy by new and increasingly competitive energy technologies that offer significant environmental, social, economic and national security advantages over the old. We are being pushed into a historic transition of America’s energy economy by a variety of risks and realities, among them the need to significantly reduce CO2 emissions from fossil fuel combustion; reduce the power system’s vulnerability to cyber-attack, service interruptions and extreme weather; protect public health from other energy-related air and water pollution; conserve essential natural resources including fresh water supplies; and respond to the growing desire of consumers to produce their own energy.

This inflection point offers a once-in-a-century opportunity to ensure that the world’s largest economy has the world’s most advanced, secure and sustainable energy system. It is an opportunity for the United States to make the transition to a clean energy economy – a goal that because of the risks of climate change must be accomplished more rapidly than any other major energy shifts in the history of industrial nations.

To seize this opportunity, we need public policies that encourage major private investment in infrastructure modernization, that remove perverse incentives and barriers to system modernization, and that more accurately assess the true benefits and costs of our energy options.

Most important, we need a comprehensive national energy plan to focus investments in energy infrastructure, to guide the diverse state and federal agencies that regulate the energy system, to identify critical needs for research and development, to acknowledge and mitigate risks to energy security, and to provide the policy certainty necessary for all stakeholders to help reinvent the power system.

Toward that end, the President of the United States should lead a transparent bipartisan process with full public participation to develop a national energy plan that has sufficient political support to survive changes in political leadership. Such a plan is not only desirable. The president is required by law to produce it.

Rethinking Electricity

As we rethink our nation’s energy policy,” U.S. Sen. Lisa Murkowski, R-AK, wrote in 2013, “it is important to face questions about the risks of energy and resource development including questions about climate change. We need to discuss these questions openly and find common ground on prudent steps to take in the face of uncertainty.”i

Here are some of those questions:

  • To what extent will our energy security require the continued or expanded use of conventional fossil fuels and nuclear power? What improvements in technologies and public

policies are necessary to accommodate these conventional energy resources in a clean energy economy?

  • Given the costs of infrastructure modernization and the investments in technology necessary to avoid greenhouse gas emissions, will coal and natural gas be able to compete in the marketplace with inherently clean energy technologies?
  • What should the balance be between central-station and distributed power production?
  • How should the anticipated impacts of climate change be factored into infrastructure design, materials, and siting?
  • How should we protect the energy system from risks that range from cyber-attacks to physical attacks, and from extreme weather events?
  • To what extent should important externalities be internalized in our assessments of the benefits and costs of energy options? What are those externalities and how to do we quantify them?
  • Based on true cost analysisii, what energy choices and supporting infrastructure provide the greatest economic, social and environmental benefits at least direct and indirect cost?
  • What types of energy resources and technologies are necessary for the United States not only to remain competitive in the international economy, but also to lead the world by example in designing and building a sustainable energy system?
  • Most important in the near-term, what is our goal and vision for the nation’s energy future? How can we arrive at a grid modernization plan that has sufficient public and political support to remain consistent through our frequent changes in leadership?

Vision and Goals

In the broadest sense, there are two competing visions for the future of America’s power sector: business as usual on one hand and a clean energy economy on the other.

Business as usual: This is the future created by the “all of the above” energy strategy currently supported by leaders in both political parties. We would continue aggressive production of oil, coal and gas for as long as these fuels are technically and economically recoverable. We would repair and expand fossil energy infrastructure. We would build new nuclear power plants and recommission old ones. We would be content to have solar, wind, geothermal and other renewable resources contribute to the grid, but in small numbers and without major efforts to expand their use. In short, we would repair and try to continue operating the electric power system we built in the 20th century.

A clean energy economy: This is the future created by a revolutionary transition to a clean energy resources and technologies. It requires that we either phase out carbon-intensive fuels or successfully mitigate their social, economic and environmental costs. Zero carbon, domestic and renewable resources such as solar and wind power, biofuels, geothermal energy and hydropower would dominate the energy mix for power generation. While clean energy technologies would continue to evolve, the shift to domestic renewable resources would minimize the likelihood that the United States would have to undergo the costs, dislocations and disruptions of another major energy shift in the future.

Western Clean Energy Advocates, a coalition of organizations working to build consensus on the energy future of the American West, describes the challenge that applies not only to the west but also to the entire country:iii

The western United States is at a crossroads. Wise electricity sector investment choices will lay the foundation for a robust, competitive and healthy west for generations to come.  Unwise choices will leave western businesses at a competitive disadvantage in the global marketplace, western consumers with higher electricity bills and westerners of all walks of life with an unhealthy environment…

If no choice is made, investment will be driven by inertia rather than intention and the grid of 2030 and 2050 will look very much like the grid of 2010…Failure to make a wise, intentional choice now could saddle future electricity consumers with stranded costs, damage the natural environment, deprive job seekers of employment opportunities and leave western businesses with a grid that causes a competitive disadvantage in global markets.  The choices made now will also affect the capacity of the West to reduce carbon emissions for decades to come.

A National Energy Plan

In separate issue papers, PCAP will go into greater depth about what America’s energy mix should be and what a national energy plan should contain. In short, we will recommend that the next president discard the “all of the above” energy strategy that leaders of both political parties currently embrace in favor of a “best of the above” energy policy based on intelligent choices and obvious needs – for example, energy supplies that are abundant, domestic, efficient, affordable, clean, environmentally benign, universally available, diverse and secure.iv

In regard to the energy infrastructure to support a clean energy mix, the national energy plan should:

  • Define an energy mix and infrastructure to reduce the nation’s CO2 emissions at least 80% by 2050 compared to 1990 levels, and to get as close as possible to a carbon neutral energy system.v
  • Include the ability to integrate and store electricity generated from non-distributable renewable resources such as solar and wind power.
  • Accommodate distributed generation at multiple scales including the islanding of critical facilities such as hospitals, emergency response centers and water treatment plants.vi
  • Set the goal of doubling the nation’s energy productivity by 2030 and making the United States the most energy-efficient economy in the world by mid-century.
  • Give high priority to moving clean electricity from remote sites where it is generated to populated sites where it is consumed and to capturing the full potential of offshore wind.
  • Include ongoing research and development to reduce the incremental costs of the 80% carbon-reduction scenario.vii

As many of our most prominent energy experts have noted, we already have the technologies and capital to create a clean energy economy; the missing ingredient is the political will to make tough but necessary decisions and to create a national energy roadmap with sufficient support to ensure policy stability through the nation’s frequent changes in leadership.

The Decline of the World’s Greatest Machine

America’s electric system has evolved over 130 years into a truly remarkable achievement. Little more than a century ago, most Americans could only dream about what an electrified nation would be like. Today, our power system has been called the largest interconnected machine on the planet and the “greatest engineering achievement of the 20th century” — high praise in a century that saw revolutionary advances in information technologies, air travel, and human space exploration.viii

By the beginning of this century, the U.S. power system was producing nearly 3,400 terawatts of electricityix in power plants fired predominantly with coal and nuclear fuels. Electricity was moved to consumers through more than 7 million miles of transmission and distribution lines that delivered $400 billion worth of electric power to nearly 140 millionx customers across the United States.

Even great machines age, however. They wear out and become substandard or obsolete when new and better technologies emerge. Eventually, it is no longer practical, optimal or cost- effective to continue repairing, rebuilding and expanding the last century’s power system.

That time has come. Our interconnected power system includes generation plants that became operational more than 30 years ago. By 2002, there was “growing evidence that the U.S. transmission system is in urgent need of modernization,” in the words of then-Energy Secretary Spencer Abraham.xi DOE has concluded that the U.S. electric grid is “aging, inefficient, congested, and incapable of meeting the future energy needs of the information economy without significant operational changes and substantial public-private capital investment.”


Figure 1: The goal of moving toward a low-carbon energy portfolio is consistent with public opinion. In 2015, Gallup asked American adults about the domestic energy resources the United States should emphasize. Clear majorities favored more emphasis on solar and wind power and to a lesser extent, natural gas. Fewer than 1 in 3 Americans wanted more emphasis on coal; 4 in 10 favored oil and about 3 in 10 wanted more emphasis on nuclear power.

The insufficiencies of the current power system can be a drag on the economy, on business and on international competitiveness. The United States experiences more power interruptions than any other developed country, costing U.S. businesses as much as $150 billion each year.xii According to the Congressional Research Service (CRS), outages caused by bad weather alone cost the economy as much as $70 billion annually. Among the things our current system cannot do, as Scientific American points out, “is support the massive shift to low-carbon power that scientists warn will be needed to avoid catastrophic climate change impacts.”xiii The technologies to deliver that low-carbon power – for example, wind turbines and solar photovoltaic cells — are ready for prime time, but our energy infrastructure, regulations, and utility business models are not ready for them.

More than a decade after Secretary Abraham’s assessment, threats to the power sector have increased. “In recent years, record temperatures, droughts, and floods have damaged energy infrastructure and disrupted energy systems, affecting American families and businesses across the country,” Energy Secretary Ernest Moniz said in 2015. “To address the harsh impacts of climate change and extreme weather, we need innovative solutions that will make our energy sector more resilient, more flexible, and more efficient, as we build a cleaner, more climate-friendly energy system.” In short, our electric system must be reinvented to serve an opportunity-filled but carbon-constrained economy that can withstand modern threats.

This will require major capital expenditures. The National Governors Association (NGA) estimates that to fully modernize the grid, utilities would have to increase their investment from approximately $34 billion annually to as much as $50 billion annually through 2030.xiv The American Society of Civil Engineers (ASCE) estimates that government agencies, regulated utilities, private investors, developers and nonprofit cooperatives will have to fill an investment gap of nearly $100 billion by 2020 just for transmission and distribution lines.xv “Determining which entities will bear those costs, including how much of the cost utility customers pay, will be a critical factor in how extensively and rapidly the grid is modernized,” the NGA says.

On the other hand, the NGA estimates that an electric system that increases reliability and resilience, enhances cyber-security, integrates renewable energy resources, and improves the use of data could result in economic benefits of $2 trillion by 2030, “if the interests of consumers, utilities, and state policymakers and regulators are aligned as much as possible” (Figure 1).xvi

In short, the most innovation-driven economy in the world todayxvii is supported by electric infrastructure that is rapidly aging, unable to cope adequately with rising risks, or to keep up with the dramatic progress being made in the performance and price of clean energy technologies. Nevertheless, many stakeholders who remain vested in the 20th century power system and its fuels are pushing back against the public policies that would unleash private investment in the technologies and infrastructure the nation needs today.

There are other barriers, too, including inconsistent policies, bureaucratic and regulatory lag and broken price signals in the nation’s energy markets.

Policy uncertainty: No level of government in the United States has the resources necessary to fund trillions of dollars of work on energy infrastructure. Much of the money must come from private investors, as it does now. However, investors like high certainty and low risk, qualities they cannot find in the polarized public policy debate today.

On-again, off-again renewable energy subsidies have been a case in point. So is the unresolved need for the market correction known as carbon pricing. There is no national renewable energy standard or nationwide energy efficiency standard. There is no national energy roadmap or infrastructure plan that would make government policies more predictable and give direction to the many organizations involved in designing, financing, building and regulating the power system. While the president can use his or her convening authority and bully pulpit to promote such a plan, the federal government has a limited role in financing or regulating the electric system. Utility regulation is the province of the 50 states, each with public service commissioners who are likely to reflect the politics and priorities of the governors who appoint them.xviii

Bureaucratic lag: The Energy Information Administration (EIA) among others projects that the demand for electricity will grow more slowly in the years ahead, caused by consumers adopting more energy efficient technologies along with government policies that encourage greater energy productivity. The EIA estimates that the growth in electricity sales will average only 0.7% annually.

At the same time, the growing costs of power generation and transmission will drive the average retail price of electricity up 18% by 2040, EIA predicts. Ron Lehr, a former utility commissioner in Colorado and now an energy consultant, says these trends mean “utilities will need to deploy capital at an accelerated rate while simultaneously being deprived of the familiar engine of earnings – customer load growth. There is no precedent for this combination of pressures and challenges.” Lehr says the pressure on utilities will be amplified by a dramatic increase in the use of renewable energy.xix EIA estimates that electric generation from renewable resources will increase 72% from 2013 to 2040 and will meet much of the nation’s growth in electricity demand during that period.xx Other experts say the growth of renewable power is likely to be much greater.

Reinventing the Great Machine

Despite obstacles like these, the future is battering at the barricades of the old energy system. “It’s become cliché to suggest that the utility industry is on the brink of a massive transformation,” one power industry newsletter observes. “Analysts told us this would happen — the traditional electric utility model would be upended, and utilities would need to adjust their business models to operate in a new energy future. Now, with plummeting prices for renewables and energy storage, the finalization of the nation’s first carbon regulations, and the proliferation of distributed energy resources, changes are taking hold faster than many expected. The electric sector is no longer simply anticipating a revolution — depending on where you are, it is embroiled in one today.”xxi

Solar and wind energy are leading the revolution as they reach grid parity.xxii In parts of the United States and the world they already have. Market analyst GTM Research reports that residential solar energy systems have reached grid parity in 20 states. Under business as usual conditions that number will double in the next four years, GTM says.xxiii By the end of February 2016, 1 million solar electric systems graced the nation’s roofs and fields, enough to power 6 million homes according to the Solar Energy Industries Association.

As the cost of low-carbon energy technologies continues to decline, there will be more rooftops equipped with photovoltaic cells and more independent power producers who want to generate and sell clean power. Electric infrastructure planning and investment must take into account that the growing popularity of these distributed technologies will add to pressure on utilities and on the grid.

Understanding & Mitigating Climate Risks

By far the most important environmental factor affecting TS&D (transmission, storage and distribution) infrastructure needs now and going forward is global climate change,” according to DOE. “Sea-level rise, thawing permafrost, and increases in weather extremes are already affecting TS&D infrastructure in many regions. The need to mitigate global climate change by reducing GHG emissions, moreover, is accelerating changes in the mix of energy supply options and end-use patterns, and over time, it is likely to become the dominant such influence.”

Some of the risks associated with climate change are unfamiliar to the energy sector and its stakeholders. In October 2010, the National Infrastructure Advisory Council reported:xxiv

Electric utilities are very experienced in emergency response and recovery, and have evolved risk management models that help predict the impact of weather, unforeseen equipment failure, and natural disasters, enabling them to more effectively prepare… An evolving risk profile and new threats to grid resilience, however, are causing grid operators to prepare for risks outside of their traditional experience and responsibilities. Grid resilience is entering an area of joint responsibility where a coordinated industry and government approach is imperative.

The American Society of Civil Engineers (ASCE) says that local climate risks are not well understood by many of the civil engineers who plan, design, construct, operate and maintain energy infrastructure. In 2015, the ASCE published an analysis of the challenges civil engineers must contend with in adapting their practice and projects to climate change.xxv The analysis notes that new infrastructure is expected to remain functional, durable and safe for long periods, typically 50 to more than 100 years, even though much of it is exposed to the climate effects DOE cites. It goes on to identify these issues:

  • There is significant uncertainty about the location, timing and magnitude of climate impacts over the lifetime of infrastructure. “There is a gap between climate science and engineering practice that must be bridged,” the ASCE says. “It is only when engineers work closely with scientists that the needs of the engineering community become fully understood, the limitations of the scientific knowledge become more transparent to engineers, and the uncertainties of the projections of future climate effects become fully recognized for engineering design purposes.”
  • Engineers should develop a new paradigm for engineering practice in a world in which climate is changing, but cannot be projected with a high degree of certainty…Engineers should seek alternatives that do well across a range of possible future conditions.

The biggest uncertainty facing the oil, gas, coal and utility industries – the elephant in the room – is the so-called “carbon budget” defined in 2013 by the Intergovernmental Panel on Climate Change (IPCC).xxvi The IPCC calculated how much carbon fuel can be burned before global warming exceeds 2oC, the limit beyond which international scientists have concluded that climate disruption would become catastrophic.xxvii

Unfortunately, industrialization used most of the budget during the last 200 years. The latest science tells us that to keep from going over budget, as much as 80% of the world’s proved reserves of fossil fuels must remain unburned between now and 2030.xxviii If that finding were enforced, oil, gas and coal companies would end up with trillions of dollars of stranded assets (by some estimates more than $20 trillion). The carbon budget calculation adds considerable risks and uncertainties to decisions about the energy infrastructure we need.

Former Treasury Secretary Henry Paulson is among the prominent thought leaders who have drawn attention to this issue, in his case in an op-ed published by the New York Times.xxix Paulson pointed out that because of the carbon budget, the fossil energy industry’s underground reserves are vastly overvalued. He called this the “carbon bubble” and compared it to the credit bubble that triggered the worldwide economic recession in 2008.

For too many years, we failed to rein in the excesses building up in the nation’s financial markets,” Paulson wrote. “When the credit bubble burst in 2008, the damage was devastating. Millions suffered. Many still do. We’re making the same mistake today with climate change. We’re staring down a climate bubble that poses enormous risks to both our environment and economy. The warning signs are clear and growing more urgent as the risks go unchecked.”

Investor concerns that the climate bubble will burst are exacerbated by the failure of many oil and gas companies to adequately and regularly assess their climate-related risks, as they are advised to do by the Securities and Exchange Commission (SEC). Ceres, an investor organization, has found that corporate compliance with the SEC’s guidance it is woefully lacking.xxx As one Bloomberg analyst explained about the oil and gas industry’s vulnerability to investor worries, “What we’re talking about is a miscalculation of risk. We’re talking about a business model that is predicated on never-ending growth, a business model that is predicated on being able to find unlimited supplies of capital.”xxxi

Since we cannot expect Mother Nature to increase the carbon budget and because we have not yet found, and may not find, a cost-competitive, risk free and scalable way to keep fossil energy emissions out of the atmosphere, the danger of exceeding the carbon budget must be mitigated by transitioning to carbon-free fuels and the energy system to serve them.

Some of the world’s larger oil companies may now be accepting that conclusion. Companies including Shell, Total and Statoil of Norway have begun investing in renewable energy technologies and enterprises “to hedge their bets that markets for oil and gas will exist decades from now,” according to an industry analyst.xxxii

Storage: The future of fossil energy and intermittent resources such as sunlight and wind will depend largely on the issue of storage. The solar and wind energy industries are anticipating improvements in batteries to store their power for use when the sun isn’t shining and the wind isn’t blowing. The electric utility and fossil energy industries are counting on another type of storage called carbon capture and sequestration (CCS) technology. It is an engineered method to trap CO2 and permanently store it in underground geological formations. CCS reportedly could capture as much as 90% of CO2 at fossil-burning facilities. Despite years of effort on R&D, however, the ability to apply CCS at commercial scale remains uncertain. Cost is among the barriers. DOE has estimated the technology would add 80% to the price of electricity from a new pulverized coal plant and about 35% to the cost of power from a new advanced coal gasification plant. There has been little discussion about how electricity from power plants equipped with CCS could compete against renewable energy technologies whose costs are rapidly declining and whose “fuels” are free.

A less expensive way to store carbon is to increase the capacity of “carbon sinks” — soils, wetlands, grasslands and forests — to absorb CO2 that is already in the atmosphere. The ecosystems are always in flux, but when they are well managed and healthy, nature serves as an important part of the energy system, particularly if we want to reduce atmospheric concentrations of greenhouse gases to more tolerable levels. These natural “carbon sinks” currently offset about 16% of the United States’ anthropogenic carbon emissions.

The U.S. Department of Agriculture launched a program in 2015 to increase the size and performance of carbon sinks by working with ranchers, farmers, foresters and others on the management, restoration and preservation of these ecosystems. Many other federal agencies have related tools and missions, from the U.S. Forest Service to NASA. Research and policy projects are underway in the private sector, among them an initiative by the nonprofit organization Forest Trends and the Nicholas Institute at Duke University to develop a policy roadmap for more intensive use of bio-sequestration in the United States.

Natural carbon sinks have limits, however. Their capacity to store carbon changes as a result of aging, disease, seasons, and human incursion. Many experts anticipate that the carbon storage performance of natural sinks will begin to decline in a decade or so, largely due to the aging of forests. Experts in the White House and private sector hope that the decline can be prevented with better care and management of ecosystems, but PCAP has encountered no one who believes that natural sinks can by themselves compensate for the amounts of CO2 pollution in a business as usual future.

Additional Considerations

Journalist and energy analyst Gavin Bade has listed his version of the top 10 disruptive forces in the energy sector today. They all have implications for the nation’s electric infrastructure. In reverse order, they are the decline of coal power; the rapid growth of natural gas; renewable energy technologies reaching grid parity; load defection as more customers install solar energy systems; utilities moving into solar energy; debates over rate design that properly values distributed resources; the need to upgrade and modernize transmission and distribution grids; the need for energy storage; greater attention to customer expectations; and the pressure to change traditional utility business models.xxxiii

Other disruptive forces are at work, too, among them growing concerns about energy security and growing international competition in the fast-moving global clean energy sector.

Energy security: In a prescient report to the Pentagon in 1982, energy experts Amory and Hunter Lovins gave a disturbing assessment of America’s energy infrastructure:xxxiv

The United States has for decades been undermining the foundations of its own strength,” they wrote. “It has gradually built up an energy system prone to sudden, massive failures with catastrophic consequences. The energy that runs America is brittle—easily shattered by accident or malice…This danger comes not from hostile ideology but from misapplied technology. It is not a threat imposed on us by enemies abroad. It is a threat we have heedlessly—and needlessly—imposed on ourselves.

The U.S. power system is vulnerable to threats both domestic and foreign. In April 2015, DOE’s first Quadrennial Energy Review (QER) focused on energy transmission, storage and distribution infrastructure. It reported that in the previous five years, cyber-security threats to the grid had “become more numerous and sophisticated”.

After a cyber-attack was launched against the Ukrainian electric system in 2014, new concerns grew in the United States about our vulnerability. The Department of Homeland Security (DHS) downplayed the risks of a major cyber-attack here, but conducted a series of briefings on the dangers for U.S. companies involved in electric power infrastructure.

So far, however, physical attacks on the power system are a greater threat than cyber-attacks. In August 2014, Inside Energy used DOE data to construct a list of 15 years of power outages in the United States. The data showed 1,652 outages between 2000 and 2014, an estimated 20% of them caused by vandalism and physical attacks.xxxv

In February 2014, a report by security officials in New Jersey detailed multiple incidents of apparent sabotage or vandalism in their state and at electric system components in Arizona, Arkansas, and California. Those appear to be the tip of a malicious iceberg. DHS reports that the U.S. power grid is hacked or physically attacked an average of once every four days, including 331 such attacks from fiscal year 2011 to 2014.xxxvi

We don’t need saboteurs, cyber-attacks or ISIS to bring down our power systems, however. The systems are so “brittle” that tree branches can do the job. In July 1996, for example, an overheated power line sank onto a tree in Idaho, interrupting power for two million people. A month later untrimmed tree branches touched a power line in Oregon, causing a short circuit that took out electricity for 7.5 million customers in seven western states and two Canadian provinces. Inadequate tree trimming also was a factor in August 2013 when 50 million people in eight northeastern states and Ontario went without power for up to four days. Extreme weather events and disasters are much larger threats than trees, but these examples illustrate just how fragile our power system can be and why resilience is such an important factor in modernizing it.

These and related vulnerabilities have drawn considerable attention from the

Pentagon. Military bases are creating micro-grids so that they can keep operating when the civilian grid goes down, and the Department of Defense has directed the armed services to obtain 25% of their energy from renewable resources by 2025. In the same way that the military has introduced many other technologies that later were adopted by the civilian world, it is likely that micro-grids eventually will be used by hospitals, first responder facilities and critical government functions.

In another issue paper, PCAP discusses the national security impacts of climate change in detail.

International competition: Clean energy is the fastest growing energy sector in the world todayxxxvii. Global investments in wind, solar and hydroelectric energy reached $286 billion in 2015, setting a new world record. It was more than double the amount invested last year on fossil-fired power plants. xxxviii

Based on an analysis of 74 nations, the U.S. International Trade Administration (ITA) concludes that the global import market for renewable energy will reach $195 billion cumulatively in 2016 and 2017.xxxix We can expect it to keep growing. The International Energy Agency (IEA) projects that renewables will dominate the world energy market at least until 2020.xl The potential is huge. More than 1 billion people do not have access to electricity. It is significant that in 2015, renewable energy investments in developing economies rose 19% faster than the growth in the developed world.

Emerging and developed economies both intend to use clean energy technologies to reduce their greenhouse gas emissions. In preparation for the Paris climate agreement at the end of 2015, nearly all advanced economies and 40% of developing economies submitted plans to increase their deployment of renewable energy. Ninety countries included some form of carbon pricing in the plans they submitted to the United Nations; 39 nations already have put a price on carbon.

The United States could fare better in the growing international competition to capture clean energy markets. We led the world in PV solar technology at the turn of the century. Today, we rank only fifth in the world in “PV manufacturing attractiveness”xli, behind China, Singapore and Taiwan. The world’s first wind turbine was introduced in Ohio in 1888. California pioneered the evolution of the wind power industry in the 1970s and 1980s. But by 2000, Europe was the world leader in turbine manufacturing. Last year for the first time, a Chinese company became the world’s largest manufacturer, with Denmark second and the United States third.xlii

Unfortunately, U.S. exporters are relatively ill-positioned to benefit from rising demand globally,” the ITA says. It projects that U.S. exporting companies “will capture just 5.6% of the global import market through 2017” because of “missed opportunities in certain key markets where renewable energy is growing rapidly.”xliii

What of the research and innovation necessary to build a clean energy economy and compete internationally? The United States ranked only fifth in the world last year, based on the capacity of our universities to do leading research, the extent to which government policies encourage it and economic benefits of its results.xliv

* * *

These pushes and pulls are disruptive but they are not necessarily negative. They are pressuring the United States and the rest of the world to go in the direction we must go. It may be coincidence or it may be good fortune that a suite of clean energy technologies is becoming cost-competitive just as we must modernize our electric power system. Either way, the benefits of this inflection point far outweigh the cost of doing nothing or of trying to sustain an energy infrastructure that is vulnerable, obsolete, uncompetitive and unworthy of the world’s largest economy.

What’s the Cost & Who Will Pay?

At the end of the day, the whole discussion begins and ends with: How do we finance this?” observes Lesa Mitchell, who leads innovation at the Kauffman Foundation. “Somebody is going to come along and figure out the for-profit angle. But

[right now,] the only people at the table are big government and big companies…. One would hope that the more one [can shed light on] the topic, people who have an entrepreneurial bent will see the opportunity. But if we don’t [act] soon, we’re going to be in a world of hurt.”xlv

The “somebody” is likely to be private investors since 80-90% of America’s infrastructure is operated privately.xlvi

Experts cited by the Wharton School of the University of Pennsylvania point out that upgrading America’s infrastructure “holds tremendous business opportunities.”xlvii Although the necessary investments are large, sufficient capital is believed to be available, but many investors are waiting on the sidelines because they regard infrastructure projects as “costly, complicated and often fraught with risk.”

Assessing global needs for infrastructure capital, principals at McKinsey & Co. write:xlviii

Contrary to popular belief, there is no shortage of capital; in fact, there will be more than enough as both governments and investors increase their focus on infrastructure…The pool of capital available is deep. Across infrastructure funds, institutional investors, public treasuries, development banks, commercial banks, corporations, and even retail investors, we estimate that more than $5 trillion a year is available for infrastructure investment.

The EIA reports that private companies and investors spent more than $14 billion on transmission infrastructure in the United States between 1997 and 2012, a five-fold increase that ended a three-decade investment decline. DOE invested $4.5 billion on grid modernization (15.5 million smart meters, 10,000 automated capacitors and more than 7,000 automated feeder switches) through the American Recovery and Reinvestment Act of 2009 (ARRA). The Rocky Mountain Institute, an energy think tank in Colorado, estimates the U.S. grid needs about $2 trillion in upgrades between 2010 and 2030, about $100 billion every year.

The question is not whether energy companies, investors and taxpayers should spend the money for grid modernization. If the United States is to have a modern power system, we must. The question is whether we will invest in the right things at the right time.xlix McKinsey advises “marrying investors to assets will require more effort, more innovation, and more thoughtfulness on the part of government and business.”

Bank on it: One financing option is a National Infrastructure Bank (NIB), an idea proposed in Congress since 2007. Most conversation about a NIB has been in the context of raising capital for transportation infrastructure. In most proposals, an NIB would rely on a combination of federal funding and bond financing and would leverage public-private partnerships to finance and run public infrastructure. A NIB could be a quasi-public organization not unlike the Federal Deposit Insurance Corporation.

However, not everyone considers a NIB to be a long-term solution. Dennis Lytton of the American Public Transportation Association has argued:

While a National Infrastructure Bank would be an improvement over the status quo, it would not solve long-term public funding shortfalls in infrastructure. In fact, a successful bank would further burden the already strained public financing mechanism. To solve the U.S.’s infrastructure crisis and get the most value out of public-private partnerships like the NIB, federal revenue sources need to be increased and spending brought up to the mean level of the OECD. A phased raising and indexing of the gas tax coupled with a new, more robust surface transportation authorization…are the likely paths forward.l


Figure 2. Investments in transmission infrastructure by Investor-Owned Utilities from 1997 to 2012 (Credit: U.S. DOE Quadrennial Energy Review)

Others advocate the development of Green Banks, similar to Infrastructure Banks but focused on green technologies. The Coalition for Green Capitalli describes them as quasi-public institutions that offer long-term, low-interest loans, revolving loan funds; loan guarantees or loan-loss reserves and other financial products to attract private investment. New York State, Connecticut, California, Hawaii and Rhode Island have created Green Banks. New York and Connecticut used system benefit charges and revenues from carbon trading to provide the initial capital. Hawaii issues bonds to private investors to finance clean energy projects. Other potential sources of government seed capital include revenues from the repeal of fossil energy subsidies and ARRA funds that states have not yet spent.

Some analysts believe that the power of states and localities to issue bonds is one of the principal ways to finance energy infrastructure in place of the “on again, off again” federal production and investment tax credits and the “limited set of 15 to 20 tax equity investors” such as J.P. Morgan, US Bank and Bank of America.lii

Now that clean energy can actually drive sustained growth,” Jeffrey Schub, Executive Director of the Coalition for Green Capital has written, “Green Banks are needed to attract and deploy the capital necessary for the massive energy infrastructure investment opportunity in front of us.” Among other things, Schub says, Green Banks can capitalize on the investment opportunities created by President Obama’s Clean Power Plan and the Paris climate agreement.

Consumer costs: For many years, an argument against renewable energy technologies has been about cost – the contention that clean energy will dramatically and regressively raise consumer energy bills and harm the economy. For example, the Manhattan Institute published a report that contends:

There is growing evidence that the costs may be too high, that the price tag for purchasing renewable energy, and for building new transmission lines to deliver it, may not only outweigh any environmental benefits but may also be detrimental to the economy, costing jobs rather than adding them.liii

Actually, there is growing evidence to the contrary. Solar and wind systems now have operated long enough to demonstrate that they do not significantly raise the cost of electricity. Solar and wind energy technologies are achieving economies of scale that are lowering their price, thanks largely to the renewable energy portfolio standards in 29 states.

A study by the New York Independent System Operator, Synapse Energy Economics and NREL concludes “increased renewable energy generation has the potential to save American ratepayers tens of billions of dollars a year over the current mix of electric power options. This does not mean this transition will be without costs—such as upgrading infrastructure and retiring existing power plants—but rather that the benefits to U.S. consumers potentially outweigh these costs.”


The objective of the electric power industry should be to connect all Americans to abundant, affordable, clean, efficient and reliable electric power anytime, and virtually anywhere. For the benefit of the economy as well as the American people, the United States should strive to provide the best and most secure electric services available anywhere in the world.

Although the federal government’s role in the electric grid is limited, federal agencies can assist in the modernization of the power system. The federal government is America’s largest energy consumer; its policies and purchases can influence markets for clean energy technologies and resources, which in turn can affect infrastructure decisions. The government can demonstrate best infrastructure practices on public and military lands and in federal Power Marketing Administrations and the Tennessee Valley Authority. Federal policies regarding energy efficiency and renewable energy ultimately influence the loads and type of electricity carried by the grid.

The U.S. military is already demonstrating the use of micro-grids to distribute locally produced solar and wind energy. In regard to electric infrastructure, the Federal Energy Regulatory Commission regulates the transmission of electricity in interstate markets; reviews siting applications for transmission projects and establishes reliability standards for high-voltage interstate transmission systems.

DOE and its national laboratories conduct valuable research on renewable energy technologies, on the future of the power system, and on next-generation fuels and infrastructure. DOE has begun producing Quadrennial Energy Reviews with vital information about the state of and challenges confronting the nation’s energy sector. The first installment of DOE’s first QER, issued in April 2015, addressed the condition of the nation’s energy infrastructure and offered recommendations. DOE now is working on a second installment, which it describes as a “comprehensive review of the nation’s electricity system, from generation to end use, including a more comprehensive look at electricity transmission, storage, and distribution infrastructure.”  Some of the nation’s needs already are obvious, however, including these:

1. Facilitate the development of a politically sustainable national energy plan.

As we discussed earlier, an immediate priority for the next Administration should be to facilitate the development of a national energy plan (NEPP) that includes guidance on America’s necessary energy mix and the infrastructure to deliver it to consumers.

Current federal law requires that each president send Congress a NEPP every two years after gathering input from the public, businesses, and other stakeholders. This bottom-up process can increase the political durability of the plan, particularly if the president works with key members of Congress to conduct public hearings in their districts.

DOE has used a similar process to obtain public and stakeholder input for the first QER. The insights it is gathering for the second installment of the QER can help inform the NEPP. liv In the future, in fact, there may be benefit in dovetailing the QER and NEPP processes.

Among other things, the NEPP should address the possibility of radical changes in the electric system during the years ahead. RMI predictslv, for example, that distributed solar electric systems coupled with batteries may result in large-scale grid defection, where customers become independent of traditional utilities and utilities must contend with large revenue losses that undermine their ability to invest in and maintain infrastructure. In the future, RMI says, customers rather than utilities will generate the majority of America’s electricity:

Our analysis shows that grid-connected solar-plus-batter systems become economic for large numbers of customers, and those systems have the potential to supply greater and greater portions of customers’ electricity. Assuming customer adoption follows optimal economics, the magnitude of potential kWh defection from the grid is large.

Efforts in some states to roll back net metering and other pro-renewable energy policies may make these changes more difficult, but it will not prevent them. Policies meant to slow the growth of clean and renewable energy will only delay the inevitable, RMI says.

2. Leverage private investment in clean energy infrastructure.

In addition to a National Infrastructure Bank, there are several ways that Congress and/or the Administration can encourage investors to move capital off the sidelines and into clean energy infrastructure.

  1. Current law allows oil and gas companies to obtain tax advantages by using Real Estate Investment Trusts (REITs) to finance pipelines. During the Obama Administration, the Internal Revenue Service (IRS) expanded the use of REITs to include some types of solar energy equipment. The IRS should now consider allowing additional types of renewable energy infrastructure to qualify for REITs.
  1. In 1977, Congress passed the Community Reinvestment Act (CRA) to discourage redlining and to help meet the needs of low- and moderate-income neighborhoods. Banking institutions that receive FDIC insurance area evaluated by federal banking agencies, which rate local lenders and develop written reports that become part of each institution’s supervisory record. During President Obama’s tenure, the Comptroller of the Currency made clear that local banks can earn credit for financing energy efficiency and renewable energy improvements in low-income neighborhoods. The next Administration should promote these lending practices and the benefits banks can receive under the CRA.
  1. In his or her legislative package, the president should propose that Congress:
  1. Extend the tax benefits of Master Limited Partnerships (MLPs) to renewable energy project developers.
  1. Repeal outdated and unnecessary fossil energy subsidies and allocate the new revenues to a national Green Infrastructure Bank, or to competitive matched grants for states to create Green Infrastructure Banks.
  1. Make clear that energy efficiency and renewable energy projects have public benefits that qualify them for financing with tax-exempt Private Activity Bonds. The tax exemption would result in reduced financing costs for qualified clean energy projects.
  1. Permit the use of Qualified Public Infrastructure Bonds (QPIBs) to leverage more public/private partnerships for energy infrastructure investments. President Obama proposed QPIBs in January 2015, but focused on investments in ports, roads, bridges, water systems and broadband networks.
  1. The president also can request that FERC initiate a rulemaking that enables utilities to recover costs of infrastructure investments that improve system resiliencelvi and use the bully pulpit to explain to the American people how a clean energy system accomplishes the goals that public opinion research shows are most important to the American people, including economic stability, public health, consumer choice, electric service reliability, greater protection from terrorism, and job creation (the Obama Administration estimates that smart investments in America’s TS&D infrastructure have the potential to create 1.5 million new jobs.lvii)

3. Increase Transparency and Information Sharing

The president can:

  1. Ensure that the NEPP and QER processes are fully transparent and open to the public input.
  1. Direct the Global Change Research Program to develop regular communications with the American Society of Civil Engineers, system operators, policy makers and regulators to keep them fully informed about anticipated climate change impacts at the sites of proposed infrastructure projects.
  1. Direct DOE’s national laboratories to regularly share information about emerging energy technologies, opportunities and issues with the National Association of Regulatory Utility Commissioners (NARUC).
  1. Direct NREL to build on the work of jurisdictions such as the State of Minnesota and the Austin Energy to develop a model national methodology for quantifying the full direct and indirect value of solar and wind energy to the grid and to all electric customers.
  1. Encourage the SEC to more strictly enforce its guidance that publicly traded energy companies annually assess and disclose their climate-related risks, including risks to oil, gas and electric infrastructure and to investments in the infrastructure that supports the fossil energy sector. (Because the SEC is an independent agency, the President cannot direct it to make this change.)
  1. Direct the Office of Management and Budget to develop, regularly update and require agencies to use a methodology for identifying the true social, economic and environmental costs and benefits of federal regulations, projects and funding.

4. Seek New Legislation and Appropriations

In his or her first budget submission to Congress, the president should incorporate the funding recommended in the first QER, including:

  1. $300-$350 million over five years for states to promote and integrate TS&D infrastructure investment plans for electricity reliability, affordability, efficiency, lower carbon generation, and environmental protection. 
  1. $3.5 billion over 10 years for DOE to make strategic investments in foundational technology development, enhanced security capabilities, and greater institutional support and stakeholder engagement, all of which are designed to provide the tools necessary for the evolution to the grid of the future. 
  1. $3.5 billion over 10 years for DOE to establish a competitive grant program for states to accelerate pipeline replacement, enhance maintenance programs for natural gas distribution systems and make cost-effective improvements in the safety environmental performance of the systems. Funds would be used to offset incremental costs to low-income households and for enhanced direct inspection and maintenance programs.
  1. $500 million over 10 years for DOE to support the updating and expansion of state energy assurance plans, and to establish a competitive grant program to promote innovative solutions to enhance energy infrastructure resilience, reliability, and security.  Direct DOE to help states and localities to identify potential energy disruptions, quantify their impacts, share information, and develop and exercise comprehensive plans that respond to and prevent energy system disruptions.
  1. $5 billion over 10 years for DOE to provide competitively awarded grants to states to demonstrate innovative approaches to TS&D infrastructure hardening and enhancing resilience and reliability.  A major focus of the program would be the demonstration of new approaches to enhance regional grid resilience, implemented through the states by public and publicly regulated entities on a cost-shared basis.
  1. $300 – $350 million over 5 years to help states promote and integrate TS&D infrastructure investment plans for electricity reliability, affordability, efficiency, lower carbon generation, and environmental protection.  In making awards under this program, DOE should require cooperation within the planning process of energy offices, public utility commissions, and environmental regulators within each state; with their counterparts in other states; and with infrastructure owners and operators and other entities responsible for maintaining the reliability of the bulk power system.  
  1. $2 – $2.5 billion in competitive grants over the next 10 years to mobilize $4 – $5 billion in non-Federal investment in shared energy transport systems.  The program should be established and supported at the U.S. Department of Transportation (DOT), in close cooperation with the DOE.  It should be dedicated to improving energy transportation infrastructure connectors.
  1. $10 million to improve the quantification of emissions from natural gas TS&D infrastructure and update Greenhouse Gas Inventory estimates of methane emissions from natural gas systems.  The DOE and EPA should undertake a coordinated approach, building on stakeholder input, to ensure that new research and analysis is targeted toward knowledge gaps unaddressed by other researchers.

The president can also recommend that Congress:

  1. Authorize and fund the Interagency Infrastructure Permitting Improvement Center in the DOT, as set forth in Section 1009 of the Administration’s draft legislation for the Grow America Act.
  1. Fund DOE’s State Energy Program to provide financial assistance to states to promote and integrate TS&D infrastructure investment plans for electricity reliability, affordability, efficiency, lower carbon generation, and environmental protection. In making awards under this program, DOE should require cooperation within the planning process of energy offices, public utility commissions, and environmental regulators within each state; with their counterparts in other states; and with infrastructure owners and operators and other entities responsible for maintaining the reliability of the bulk power system.
  1. Allocate additional resources to federal agencies involved in siting, permitting, and reviewing infrastructure projects. Federal agencies responsible for infrastructure siting, review, and permitting have experienced dramatic appropriations cuts and reductions in staff. Many of the components of the overall effort to improve the Federal siting and permitting processes have been stymied in recent years by appropriations shortfalls.


As challenging as it may be in a period of political division, the United States must create a bipartisan plan for modernizing the nation’s electric system. Without one, we are likely to see disorganized, duplicative, and insufficient investments in the quality of electric service the American people and the business community expect and deserve. We also are likely to see shareholders in oil, gas and coal companies end up with stranded investments if traditional energy companies focus on repairing and expanding last century’s electric system rather than building for the future.

Current law provides guidance for a transparent and open process to create a national energy infrastructure plan – a process that can help make sure the plan is sustained through changes in political leadership. Such a plan would provide a measure of energy policy stability that does not exist today, but that could unleash the private sector investment needed to bring our electric system up to 21st century standards.lviii

The United States must take advantage of this inflection point in the power system to better manage and minimize the risks of global climate change, costly power disruptions, and the erosion of its international competitiveness. If the current power system is the greatest engineering achievement of the 20th century, then re-visioning and reinventing that system should become one of the greatest achievements of the 21st.

The Presidential Climate Action Project is a nonpartisan initiative to identify public policies that address global climate change and America’s transition to clean energy in ways that are consistent with progressive and conservative values. PCAP is advised by a national committee that includes several of the nation’s most distinguished thought leaders from both political parties. For more information about PCAP and to obtain other reports in this series, visit www.pcap2016.org or contact Executive Director William Becker at beckerncs@gmail.com.

Posted Aug. 25, 2016

i Energy 20/20 – A Vision for America’s Energy Future, Sen. Lisa Murkowski, U.S. Senate Committee on Energy and Natural Resources, Feb. 4, 2013.

ii By “true cost analysis”, we mean a combination of life-cycle and full-cost assessment – a methodology that considers all impacts of an energy option, direct and indirect, internal or external in market prices, from the resource’s production and consumption to the disposition of its wastes and byproducts.

iv These attributes are common to vision statements at the U.S. Department of Energy, the Senate Energy and Environment Works Committee and many other stakeholders. The U.S. Department of Energy’s vision for 2030 is an electric system that “connects everyone to abundant, affordable, clean, efficient and reliable electric power anytime, anywhere, and provides the best and most secure electric services available in the world.” Grid 2030: A National Vision for Electricity’s Second 100 years, U.S. Department of Energy Office of Electric Transmission and Distribution, July 2003.

v Note that this goal is based on 1990 emissions consistent with international practice rather than the 2005 base year used by the Obama Administration. The Administration’s commitment to reduce GHG emissions 26-28% by 2025 compared to 2005 equates to a reduction of only 12-19% compared to 1990 levels. Its commitment to cut emissions 17% by 2020 is equivalent to 3- 8% of 1990 emission levels.

vi Islanding is the practice of using distributed power generation and micro-grids that allow facilities to be grid-connected, but to detach from the grid and operate independently when there are sustained power outages.

vii The National Renewable Energy Laboratory (NREL) cautions that to achieve the 80% scenario, the electric system would have to overcome “institutional challenges that are often more formidable, and less studied, than the technical challenges”.

viii This was the judgment of the National Academy of Engineering, which ranked what it considered the greatest engineering advances of the last century.

x Based on Energy Information Administration data on ultimate electric customers served in 2004.

xi National Transmission Grid Study, Spencer Abraham, U.S. Department of Energy, May 2002.

xii Economic Benefits of Increasing Electric Grid Resilience to Weather Outages, Executive Office of the President, August 2013.

xiii U.S. Electrical Grid Undergoes Massive Transition to Connect to Renewables, Scientific American, Jennifer Weeks, April 28, 2010.

xiv Other estimates are much higher. The Rocky Mountain Institute, cited later in this paper, believes annual investments will have to be about $100 billion yearly between 2010 and 2020.

xv It is unclear whether these estimates are based on repairing and expanding infrastructure for carbon-intensive fuels, reinventing the system to support clean and renewable fuels, or a combination of both.

xvi Governor’s Guide to Modernizing the Electric Power Grid, National Governors Association, March 2014.

xvii The Best and Worst Economies in the World, Sauler et.al., 24/7 Wall Street, Sept. 30, 2015.

xviii Governors appoint utility commissioners in all but 12 states.

xix Utility and Regulatory Models for the Modern Era, Ronald Lehr, America’s Power Plan, p. 4, 2013.

xx Annual Energy Outlook 2015, U.S. Energy Information Administration, April 14, 2015.

xxi The top 10 trends transforming the electric power sector, Galvin Bade, Utility Dive Demand Response Newsletter, Sept. 17, 2015.

xxii Grid parity is the price point at which solar, wind and other alternative resources produce electricity at a cost equal to or less than conventional resources such as coal, natural gas and nuclear fuels.

xxiv A Framework for Establishing Critical Infrastructure Resilience Goals: Final Report and Recommendations by the Council, Berkeley and Wallace, National Infrastructure Advisory Council, Oct. 19, 2010.

xxv Adapting Infrastructure and Civil Engineering Practice to a Changing Climate, Committee on Adaption to a Changing Climate, J. Rolf Olsen, American Society of Civil Engineers, 2015.

xxvi This calculation is contained in the IPCC’s Fifth Assessment Report. A more detailed explanation of the calculation can be found in the article, Carbon briefing: Making sense of the IPCCs new carbon budget, published by Climate Brief.

xxvii This constraint on the use of fossil fuels is based on combustion without carbon capture and sequestration or other technologies that might compensate for CO2 emissions by removing them from the atmosphere. Scientists identified the limit as early as 1975. At the international climate conference in December 2015, however, nations agreed that 2oC now is probably too high. They adjusted the global goal to keeping warming well below that level, and even down to 1.5oC, compared to preindustrial levels.

xxix The Coming Climate Crash: Lessons for Climate Change in the 2008 Recession, Henry M. Paulson Jr., New York Times, June 21, 2014.

xxx Ceres: U.S. Oil and Gas Companies Are Not Adequately Disclosing Climate Risk, Gina-Marie Cheeseman, Triple Pundit, Jan. 25, 2016.

xxxi Ibid.

xxxii Green really is the new black as Big Oil gets a taste for renewables, Terry Macalister, The Guardian US Edition, May 21, 2016. Several major oil companies invested in renewable energy technologies in the past, but later reduced or eliminated those investments.

xxxiii The top 10 trends transforming the electric power sector, Gavin Bade, UtilityDIVE, Sept. 17, 2015.

xxxiv Brittle Power: Energy Strategy for National Security, Amory Lovins and L. Hunter Lovins, Brick House Publishing 1982.

xxxvi As reported by Fox Business, Washington Moves to Thwart U.S. Power Grid Attacks, Elizabeth MacDonald, Feb. 2, 2016.

xxxvii The data supporting this statement do not include nuclear power. The World Nuclear Association reported in April 2006 that nuclear power capacity was increasing rapidly with more than 60 reactors under construction in 15 countries, most of them in Asia. Plan upgrades and life extensions are also contributing to capacity.

xxxviii Global Trends in Renewable Energy Investment 2016, United Nations Environment Programme, March 2016.

xxxix 2016 Top Markets Report: Renewable Energy, International Trade Administration, April 2016.

xl Renewables to lead world power market growth to 2020, International Energy Agency, Oct. 2, 2015.

xli This ranking, published by gtmresearch in October 2015, is based on factors such as direct manufacturing incentives, business environment and access to demand.

xlii Top 10 Wind Turbine Makers for 2015: ‘The Year of China’”, North American Windpower, Feb. 23, 2016.

xliii Ibid.

xliv According to a study by Cornell University, the World Intellectual Property Organization and INSEAD

xlv America’s Aging Infrastructure: What to Fix, and Who Will Pay? Wharton-University of Pennsylvania, Nov. 10, 2010.

xlvi Investor-owned utilities own more than 50% of net generation and nearly 80% of transmission in the United States. Publicly owned utilities and cooperatives, along with the federal power agencies, account for approximately 25% of net generation and nearly all of the remaining transmission. Independent power producers are responsible for the remaining 25% of net generation.

xlvii America’s Aging Infrastructure. This section of the paper draws heavily from this analysis.

xlviii Making the most of a wealth of infrastructure finance, Duvall et.al., McKinsey & Co., June 2015.

xlix See the McKinsey & Co. interview with Joaquim Vieira Ferreira Levy, the managing director of the World Bank Group, for lessons Brazil has learned about the importance of openness and “de-risking” for infrastructure investments.

l The National Infrastructure Bank: A Cure-All for America’s Infrastructure Woes? Dennis Lytton, Georgetown Public Policy Review, Feb. 26, 2014.

li What is a Green Bank?, Coalition for Green Capital, undated. See a more complete explanation of state-created green banks from the Center for American Progress.

lii Clean Energy Finance Through the Bond Market: A New Option for Progress, Milford et.al., Brookings-Rockefeller Project on State and Metropolitan Innovation, April 2014.

liii The High Cost of Renewable-Electricity Mandates, Robert Bryce, The Manhattan Institute, Feb. 28, 2012.

liv DOE should also draw from the many private-sector and trade-association recommendations for the 21st century power system, including those from America’s Power Plan, NARUC, the Hurricane Sandy Rebuilding Task Force, the Electric Power Research Institute, the Powering Forward report developed by the Center for the New Energy Economy, DOE’s Renewable Electricity Futures Study, the National Infrastructure Advisory Council and other expert organizations.

lvi Certain federal agencies are independent entities over which a president has limited influence. FERC, the IRS and the SEC are among them. As a result, a president can encourage these agencies to take certain actions, but he or she does not have the authority to direct them.