Outlining his American Recovery and Reinvestment Plan, which could see spending of up to US$775 billion and the creation or saving of three million jobs, Obama says energy is one of his priorities:
“To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernise more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills.
“In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain,” Obama said.
He also addressed the need to upgrade the American transmission system pledging to start building a new smart grid. According to a report from consultancy KEMA, an investment of US$16 billion in smart grid incentives over the next four years could work as a catalyst in driving associated smart grid projects worth up to US$64 billion. It also predicts that by the end of 2009, over 150,000 of the 280,000 new direct jobs will have been created.
The recovery and reinvestment package will not come cheap, however, and Obama acknowledged this saying: “I understand that some might be sceptical of this plan. Our government has already spent a good deal of money, but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy. That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems – we’ll invest in what works.”
There is not much time for legislators in Washington to reach agreement on this, however, as the budget has to be ready by mid-February, and the road will be bumpy.
According to the Associated Press, Republicans warn against increased spending and both parties say they want their stamp on the economic recovery effort. The one thing they all agree on, is the need for action.
The worry is about the deficit, which according to the Congressional Budget Office (CBO), could reach US$1.2 trillion in 2009, and as the Economist puts it: “Mr Obama faces three sceptical constituencies: Republicans, fiscal conservatives in his own party, and the markets.”
The renewables industry in America welcomed Obama’s plans with the American Council on Renewable Energy (ACORE) President Michael Eckhart, saying he has a strong belief that the President-elect is committed to implementing a new energy strategy for the nation, melding it with goals for national security and economic recovery, as well as traditional ties to the environment and climate conditions.
“President-elect Obama called for growth of manufacturing in the United States, employing Americans in the production of solar panels, wind turbines and equipment associated with energy efficiency, electric power transmission, smart grid, and advanced vehicles,” says Eckhart. “Our industry can lead the way on economic recovery and growth with immediate results.”
The American Wind Energy Association (AWEA) also welcomes Obama’s speech with CEO Denise Bode saying: “The wind energy industry looks forward to delivering on the President-elect’s call to double renewable energy production over three years – but we can do so only if Congress makes an immediate, temporary change to the existing federal incentive of wind to make it effective in the current economic and financial context.
“The industry also looks forward to working with the President-elect on the ambitious new energy policy agenda that he has outlined, including an early-action national renewable electricity standard, and investment in clean energy transmission ‘superhighways’ to cost-effectively bring renewable energy to customers.”