N.C.'S NEXT STEPS ON ENERGY; INSTITUTE FOR EMERGING ISSUES LOOKS AT CHALLENGES AND OPPORTUNITIES

BYLINE: Anita R. Brown-Graham

From Anita R. Brown-Graham, director, Institute for Emerging Issues:

Population growth will transform North Carolina over the next 25 years. We must plan now to meet the energy needs that will emerge.

The 2007 General Assembly took a significant step by enacting the Renewable Energy Portfolio Standard.

But several policy angles must be further explored to make our state a leader in innovative energy policies.

Efficiency: Our state must find ways to reduce its energy demands. Greater efficiency in electricity use should be encouraged across residential, commercial, industrial and government sectors. Policy mechanisms that have worked in other states include appliance efficiency standards and tax credits for commercial green buildings. Clearly, the state of North Carolina should lead by example by adopting high-energy efficiency standards for its public buildings.

In the transportation arena, efficiency policy mechanisms that could help increase gas mileage and reduce miles traveled include tailpipe emission standards, land-use policies that incorporate smart transportation, state transit funding and financial incentives for buying green vehicles.

Renewables: We must further develop the state's renewable energy resources. The production of wind energy in the mountains and on the coast has untapped potential. Tax incentives and modifications of the Ridge Law, which prohibits construction of wind turbines in the mountains, could make electricity generated from wind resources price-competitive. North Carolina also has the potential to produce a significant amount of energy from biomass. In fact, many to refer to our state as "The Saudi Arabia of Biomass."

With solar energy, North Carolina has useful locations for some types of collector systems, but these require integration into the existing grid, and solar power remains relatively expensive. Hydropower represents a small percentage of the state's electricity generation. This source probably has limited potential in our state.

Alternative fuels in transportation will receive increasing attention. In 2003, there were nearly 11,000 alternative-fueled vehicles in North Carolina - 2.1 percent of the U.S. total. Ethanol as an alternative fuel meets barely 1 percent of the energy demand in the transportation sector. According to the State Energy Plan, to achieve a 10 percent increase in ethanol use in North Carolina, corn production must increase by 130 percent and acreage for corn must increase by 10 percent from current levels. The REPS bill did not set specific goals for alternative fuels. That's a challenge we must confront soon.

Opportunities: The new energy economy will create many economic development opportunities. To benefit from them, North Carolina must support the economic competitiveness of related businesses and industries. Last session, state legislators considered a bill titled "The North Carolina Green Business Fund," which would have distributed $15 million to support biofuels, green building and green entrepreneurship on a recurring basis. The General Assembly provided $1 million for FY 2008 to begin the process of spreading economic development opportunities more widely through the support of energy-related enterprises. As a state with more than 80 rural counties, this is an important first step. Local firms such as Cree, Novozymes and Megawatt Solar should be lauded as models of investment in local talent and technologies capable of turning a profit, while strengthening the community and environment.

While passage of the REPS bill is a step in the right direction, we still face significant challenges as we look toward our energy future. The Institute for Emerging Issues is exploring these challenges through working groups leading up to the 2008 Emerging Issues Forum Feb. 11-12 as our state strives for a secure energy future.

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For The Record offers commentaries from various sources. The views are the writer's, and not necessarily those of the Observer editorial board. To learn more about the Institute for Emerging Issues go to www.ncsu.edu/iei/index.php.