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Kentucky Significantly Can Ramp Up Use of Distributed Energy Today, new report finds.

by Nancy Reinhart — last modified Jun 26, 2012 11:45 AM

In a KySEA-sponsored webinar on June 21st, Rory McIlmoil of Downstream Strategies discussed the findings of the report “The Opportunities for Distributed Energy in Kentucky,” which illustrate Kentucky’s potential for small-scale renewable energy.

If pursued to its fullest potential, small-scale renewable energy could provide up to 34% of Kentucky’s electricity demand by 2025, the report found.

The report recommends that the state institute policies that encourage distributed renewable energy. The report defined distributed energy generation as “the generation of electricity and heat, or the capture and reuse of waste heat, at or near the point of consumption.”

“The broad overarching purpose of this report was to not only provide a detail of what’s available in Kentucky but to kind of throw out a counter argument for public opinions when it comes to renewable energy,” McIlmoil said.

People often imagine renewable energy as large, centralized solar plants. However, small-scale renewable energy is possible and a practical option in Kentucky. Rather than relying on large power plants, distributed energy generation would allow for on-site energy supplies and local ownership. Local ownership of energy supplies creates more jobs and allows more money to stay in local communities, which would be of great benefit to Kentucky’s economy.

Although it would require many policy changes to reach this potential, transitioning to increased use of these energy resources is possible. Renewable technology is already being used throughout many states, and in Kentucky there are electric co-ops that illustrate the possibility for small-scale renewable energy. “These aren’t technologies of the future,” McIlmoil said.

According to McIlmoil, Kentucky has a greater solar resource than New Jersey, the state that leads the east coast in solar energy, and Germany, which leads the world. Harnessing more of the sun’s power through solar panel installations, for example, would create more jobs by allowing for local labor, as well as installers and engineers.

Although Kentucky has a lot of coal and has the fourth cheapest energy of any state, “that doesn’t equate to low household expenses,” said McIlmoil. Energy costs in Kentucky have risen significantly over the past several years, which McIlmoil claims is because “the price of electricity has been pegged to the price of coal.” Kentucky’s continued dependence on coal will only lead to higher energy prices.

However, distributed renewables would add diversity to Kentucky’s energy portfolio and help stabilize prices, according to McIlmoil. KySEA supports policies that keep energy affordable, and small scale renewable energy has the potential to curb energy costs in the future. This would ultimately help Kentuckians and prevent low-income Kentuckians from dealing with the rising costs of coal.

In addition to improving the economy and environment, a transition to distributed, or decentralized, renewable energy democratizes energy production and generates more participation from Kentuckians, said McIlmoil.

Among the incentives and policy recommendations detailed in the Downstream Strategies report were instituting a renewable energy portfolio standard and a feed-in tariff. These two policies in particular would help make distributed energy possible.

A renewable energy portfolio standard requires that a certain amount of Kentucky’s energy come from renewable resources. The KySEA-supported Clean Energy Opportunity Act, a bill currently in Kentucky’s house, would make this possible by requiring 12.5% of electricity sales to come from renewable energy by 2022, and includes a solar set-aside of 1%.

A feed-in tariff would create a standard rate for electricity. Utilities companies then purchase surplus energy from households and communities at a stable price. This dependability would reduce risk and promote individual and small-scale energy production. The Clean Energy Opportunity Act would institute such a policy.

“Large scale investments in renewable energy would create thousands of new employment opportunities in manufacturing, sales, installation and other industries,” said Andy McDonald, Director of the Kentucky Solar Partnership, a KySEA member organization. “Kentucky should take advantage of the great opportunities outlined in this report to advance solar in our state.”

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