An Energy Bill for 2009

This year’s energy bill has been much anticipated for its expected green hue.

Those in the green community have long waited for democratic leadership to usher through a bold cleantech agenda.

First hints at what 2009’s energy bill would look like emerged on the campaign trail, as Obama called for cap-and-trade, doubling our use of renewable energy, and drastically improving energy efficiency and transmission.

The bill recently released to the House Energy and Commerce committee more than gets that ball rolling. And the Senate has promising plans in the works as well.

With a nascent industry like cleantech, favorable policy can do much not only to ensure its survival, but increase competitiveness and adoption rates as well.

If the provisions in the proposed energy bill pass, it will be a clear sign that cleantech has government support, and stock prices will respond in kind.

It’ll be some time before any legislation is passed and signed, but getting ahead of the curve and staking your position early will guarantee investment success.

Energy Bill 2009: The Proposals

In the House, Henry Waxman and Ed Markey have floated a bill that calls for both cap-and-trade and a renewable energy standard (RES).

Per that bill, emissions would have to be reduced 20% below 2005 levels by 2020 and 83% by 2050. The RES portion mandates that we get 25% of our energy from renewables by 2025.

Statements from Waxman and Markey confirmed they’d like to vote on the measure, called the “American Clean Energy and Security Act of 2009,” by Memorial Day — something I predicted in these very pages.

In the Senate, the Natural Resources committee has begun marking up several different pieces of energy legislation, none of which include cap-and-trade or an RES.

But not to worry.

Senate Majority Leader Harry Reid has said he’d support a one-bill strategy, meaning the energy bill he brings to the floor should contain both provisions. And Jeff Bingaman, chair of the Natural Resources Committee, has put forward an RES plan that calls for 16% by 2019 and 20% by 2021.

That would have the same outcome as the House version, with only a slight tweak to the numbers.

Whether it’s 20% by 2021 or 25% by 2025 the same thing has to happen: the use of renewable energy has to be significantly expanded.

The Stars Align

Don’t get overly excited, the bills still have to be debated and passed in each chamber. There will plenty of room for excitement when that happens.

At this point, though, it will pay off more to be prepared than excited.

Here’s what I mean. . .

The majority of cleantech proponents are caught up in the giddiness of the moment. They’re just happy that Congress is finally taking a step in the right direction.

But taking a step back and realizing the enormity of the situation will give more than just a warm feeling inside, it can also add to your bottom line.

Consider that renewable energy currently only provides about 2.5% of our electricity needs — a scant 105.2 million megawatt hours per year of the 4.2 billion megawatt hours we consume.

Mandating that renewable energy makes up an increased percentage of that mix will ensure rapid growth in the industry.

It would be as if the government mandated that a certain increased percentage of wireless customers use Sprint exclusively.

A 20% RES would require renewables to generate well over 840 million megawatt hours per year — well over 800% growth from current levels.

So you see, it’s the 800% growth that gets me excited, not the 20% target.

Growth like that will ensure profits from all renewable sectors. And the cap-and-trade aspect of the bill will only boost those profits further.

And I’ll be here to help you capitalize the entire time.

In fact, this pending legislation is one of the reasons we founded Clean Energy Sector. We knew the energy market would soon be revolutionized in a very profitable way.

To green energy and green profits,

Chris