Block’s Indicator of Sustainable Growth

by Ray Block

The US$789 billion fiscal stimulus plan, which Republicans fought so bitterly to derail is now law. Nearly $20 billion is earmarked for renewable energy  and $11billion to modernize the American electricity grid.

This is a great leap forward for the US, at a time when the banks were knocking back new loans for renewable energy projects. And this is, despite the fast growth the US industry has made in wind energy to become the world leader, and equally the speed in expanding its lead in solar thermal, whose future is unlimited.

The $11 billion to be spent on the electricity grid is urgently needed. While it’s not nearly enough, it’s a start.

THIS is a great step forward, at a time of deep world recession, when the banks were knocking back new proposals for renewable energy.

As this blog pointed out on December 29 2008, (Smart Grid and Storage, the big thing in venture capital in 2009), there was an urgent need to bring up to date the creaking North American electricity grid, with about 150,000 miles of high voltage transmission system, sustaining large losses and inefficiencies, and adding greatly to costs.

Referring to a study prepared by Global Smart Energy, the American electricity grid was “never designed to ship the large amounts of power across the country. But that’s precisely what it is forced to do. …..Transmission losses, which occur partly due to congestion, have jumped from 5 per cent in 1970 to 9.5 per cent in 2001.” And those losses, with the increased demand would be much greater in 2009.

So, good on President Obama. They may have started late in carbon abatement, with the global warming sceptics in the Bush White House, but they have made great strides in recent months. It’s good to see real American leadership at work.