Renewable Energy: Tax Credit, Budget,and Electricity Production Issues
Summary
High gasoline and natural gas prices have rekindled interest in the role thatrenewable energy may play in producing electricity, displacing fossil fuel use, andcurbing demand for power transmission equipment. Also, worldwide emphasis onenvironmental problems of air and water pollution and global climate change, therelated development of clean-energy technologies in western Europe and Japan, andtechnology competitiveness may remain important influences on renewable energypolicymaking.The Bush Administration’s FY2007 budget request for the Department of Energy’s (DOE’s) Renewable Energy Program seeks $359.2 million, which is $84.0million, or 30.5%, more than the FY2006 appropriation. In support of the President’sproposal for an Advanced Energy Initiative (AEI), the request includes major fundingincreases for solar energy (to support the Solar America initiative) and biomass (tosupport the Biorefinery Initiative). The main increases are for Solar Photovoltaics($79.5 million) and Biomass ($59.0 million). Some significant cuts were alsoproposed, and the request sought to eliminate earmarks.Appropriations actions by the House and the Senate Appropriations Committeehave approved most of the requested FY2007 funding increases for AEI and greatlyreduced earmark funding. Compared with House-passed funding, the SenateAppropriations Committee recommendation seeks an increase of $66.1 million (5%).
Table 3
shows other differences, most notably those for Biomass & Biorefinery,Geothermal, Hydro, and Weatherization programs.Important regulatory issues have surfaced for wind energy. A major debate haserupted over the safety and economic and environmental aspects of a proposal byCape Wind Associates to develop an offshore wind farm near Cape Cod,Massachusetts. The parties to the debate are waiting for the results of a Departmentof Interior (DOI) environmental impact statement and a Coast Guard study of navigational safety aspects. Also, concern that large wind turbines may disrupt radarsystems led to federal actions to halt several wind farm developments, pending theresults of a study by the Department of Defense (DOD) that was due in early May2006. In late June 2006, the Sierra Club filed suit to compel completion of the DODradar study. An agency of the United Kingdom has studied modifications to turbinesand radar systems that may help solve the problem.Also, high gasoline prices have stimulated a DOE proposal for aggressivedevelopment of cellulosic ethanol as an alternative to gasoline and corn-basedethanol. The focus is on using biotechnology to simplify processes and reduce costs.This report replaces CRS Issue Brief IB10041,
Renewable Energy: Tax Credit, Budget, and Electricity Production Issues
, by Fred Sissine. It will be updated asevents warrant.
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