On December 30th we were visited by Bruce Biewald, a Continuum client and the President of Synapse Energy Economics of Cambridge. For the past thirty years Biewald has advised state agencies, consumer and environmental advocates, utilities and others on the production and consumption of energy. As the co-author of more than one hundred reports for several different state and environmental agencies, he is a highly-respected voice in the on-going discussion of energy consumption, sustainability and the future of power. Bruce presented his perspectives on the technical, economic and regulatory challenges for reducing greenhouse gas emissions to the thirty or so who gathered in our great room.

What I took away from Biewald’s visit was the idea that consumers can and should modify their behavior to consume less energy, but that sound policy and government regulation is needed to truly minimize the environmental impact of power generation. Current regulation models fail to provide adequate incentives for innovation within the power industry. For example, since carbon emissions are not currently regulated, proposed power plant plans rarely include future costs of carbon in their financial models, despite the existence of cost estimation models.

Surely, no one can predict the future of carbon costs with any more certainty than the price of oil. But, omitting carbon costs in financial plans can lead to misguided technology and poorly made capacity decisions. We need to provide better incentives, improve policy, upgrade older facilities, and accurately represent the financial and environmental impact of new facilities when assessing power generation technology.