ClimateWorks Foundation

Sector Overview
Best Practice Network: Regulatory Assistance Project

Sector Overview

The power sector is the ClimateWorks Network’s largest target for reducing carbon dioxide emissions. Power generation, which accounts for 20 percent of global greenhouse gas emissions, will see some $20 trillion in capital investments over the next two decades. If these investments focus on energy-efficiency measures and emissions-free power sources, we can dramatically increase our chances of avoiding dangerous climate change.

Experience has shown that the best way to steer investments to low-carbon options is to reform the regulations that govern utilities. The ClimateWorks Network employs several interlocking strategies to:

• End the use of unabated coal-fired power plants
• Promote energy efficiency 
• Expand market share for clean energy technologies that reduce or eliminate carbon emissions

Unabated coal power is our main adversary. Current business-as-usual models forecast a doubling of coal-based generation by 2030. But to avert dangerous climate change, we must prevent this escalation. One of our core strategies is to engage policymakers with deep analysis that points to alternatives to coal power, such as the cleaner, and typically cheaper, option of energy efficiency.

Effective utility policies can:

• Enable utility-scale investments in energy efficiency
• Encourage stable incentives that allow renewables to compete with fossil fuels
• Promote large-scale investments in clean energy technology
• Improve the power grid to enable broader deployment of renewable energy

Research and investment in carbon capture and storage (CCS) is also necessary to determine if this promising technology can help reduce emissions from fossil fuel generation.

The Regulatory Assistance Project

The Regulatory Assistance Project (RAP) is ClimateWorks’ Best Practice Network for the power sector. RAP is a global, nonprofit team of experts that focuses on the long-term economic and environmental sustainability of the power and natural gas sectors, providing technical and policy assistance to government officials on a broad range of energy and environmental issues.

Formed by a group of veteran utility regulators, RAP has deep expertise in regulatory and market policies that promote economic efficiency, protect the environment, ensure system reliability, and fairly allocate system benefits among all consumers. RAP has worked extensively in the U.S. since 1992 and in China since 1999, and has assisted governments in nearly every U.S. state and many nations throughout the world. RAP is expanding operations with new programs and offices in Europe, and plans to offer similar services in India in 2011.

RAP has contributed to innovative market mechanisms and regulatory reforms that have led to increased investment in renewable energy and end-use efficiency resources.  Among these ideas are the efficiency power plant; cap-and-invest (directing revenues from the auction of emissions allowance to clean energy investments); “clean first” grid access policies; revenue-based rate making that breaks the link between utility sales and profits; and reforms that enable the participation of demand-side and distributed resources in wholesale markets.