GHG reductions that lessen fossil fuel demand and promote clean alternatives can mitigate energy price volatility, support local economies, and create jobs (Awerbuch, 2006; Bird et al., 2005; Center for Energy and Environmental Policy (CEEP), 2005). Technologies such as wind and solar rely on 'free' fuel and purchasers incur only capital and maintenance costs. Here's where the paragraph gets to the heart of the matter:
The US electricity industry is increasingly exposed to natural gas price volatility because most new generation has been gasfired, and the amount of electricity generated from this source has increased by 62% since 1997 (Henning et al., 2003; Klass, 2003; Zarnikau, 2005). There's more:
Renewable energy and energy efficiency can serve as hedges against natural gas price variation when integrated into energy resource portfolios because both decouple the cost of energy service from fuel price (Delaware SEU (Sustainable Energy Utility) Task Force, 2007; Biewaldet al., 2003; Rickerson et al., 2005). These risk management benefits were recently brought into sharp focus by hurricanes Katrina and Rita. Hurricane damage to US natural gas infrastructure in the Gulf of Mexico in fall 2005 caused natural gas price spikes that resulted in significantly higher electricity prices and heating costs (US Energy Information Administration (EIA), 2006).There you have it. I couldn't have said it better myself.
John Byrne is Distinguished Professor in the School of Urban Affairs and Public Policy at the University of Delaware, and Director of the Center for Energy and Environmental Policy. He has worked with Sen. Harris McDowell on the creation of Delaware's Sustainable Energy Utility. Byrne served on a working group of the Intergovernmental Panel on Climate Change (IPCC), which was awarded the 2007 Nobel Peace Prize jointly with Al Gore.
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