Acting Secretary of Energy Daniel Poneman spoke at the Bloomberg New Energy Finance Summit in April. Poneman, who will resume the deputy role once a secretary is named, said the DOE is focused on modernization after storms in the Northeast this past winter exposed the grid’s soft underbelly. In addition, Poneman said access to capital remains a challenge, although the DOE is ready to invest in technologies that make sense even if they have to wait lengthy periods for a return.
Below are some of the highlights from his remarks.
“One of the areas that we’re focusing on a lot recently is grid modernization. This has huge implications. Now whether you’re talking about, globally, the transformation of our energy economy precisely to integrate increasing amounts of variable power generation, solar, wind and so forth and the input side of the grid or whether you’re looking at a much more variable load at the other end because of smart meter because of the growth of electrical vehicles and vehicles that not only draw from the grid but feed back into the grid. But there’s a whole other set of reasons why we need to modernize the grid.”
“Our grid has not kept up, and that means, as we’ve discovered time and time again as we have more violent storms how fragile it is. Those of us who for weeks tried to restore power to New York and New Jersey have redoubled our efforts to make our grid more resilient and resistant to natural disasters… We’re very aware that we have to work closely with the private sector who owns the mandatory assets to be successful in that venture.”
“Classically, [the Department of Energy] we have made a difference at the earliest stages. The technologies that no one can expect an investor to wait 20, 30, 40 quarters for a return. One I like to talk about are these obscure technologies horizontal drilling and hydraulic fracturing between 1978 and 1992. The Department of Energy invested $137 million and there was not a lot of commercial interest in those days.”
“The President is right to focus on research and development, but we have to do one other thing which this group assembled here can make a unique contribution. We’ve got to lower the cost of capital for energy investments. In particular, those that we do not have commodity risks and commodity costs for the capital assets that support them will be make or break in terms of their ability to compete in a modern energy economy.”