Professional Documents
Culture Documents
Where the
Wind Blows
and Sun Shines:
A Comparative Analysis
of State Renewal Energy By Matthew Slavin, Ph.D.
Standards
America’s state governments are at on five selected examples of state RES generation and drives economies of scale
the forefront of efforts to expand initiatives to highlight key features upon that lower the cost of renewable produc-
the nation’s supply of renewable energy. which these programs are founded. States tion such that it is competitive with
Renewable energy standards (RES) use a number of different names for conventional fossil fuel generation.
comprise the cornerstone of these their RES programs including renewable RES mandates vary from state to state.
initiatives. RES is by far the most widely energy portfolios. For simplicity, all will be Each state has designed its RES to account
used mechanism by states to expand referred to as renewable energy stan- for a range of state-specific conditions and
renewable energy production and dards. A primer on how RES is supposed policy priorities. These include available
NORTH AMERICA
consumption. Fully 29 states have to work offers a useful point of departure. wind, solar and other renewable energy
adopted some form of a mandatory RES. potential in a state; reducing greenhouse
RES is also in place in the District of How Renewable Energy gas emissions and mitigating other
Columbia. And Vermont has a goal that Standards Work environmental externalities associated
so far has been voluntary, but which may State RES programs share a basic com- with fossil fuels; and lowering electricity
become mandatory by 2013. mon thread. They place a mandatory costs to consumers. Other goals include
RENEWABLE ENERGY WORLD
What follows is an assessment of obligation on electric utilities to generate diversifying the energy mix to protect
how different states have structured a specified percentage of the electricity against potential fuel interruptions and
their RES programs, what similarities they sell to their consumers from renew- attracting wind and solar farms, product
they share and what differentiates them. able energy technologies. The underlying manufacturers and research and devel-
Renewable energy standards are complex concept is that RES will foster competi- opment facilities to promote economic
instruments and this assessment is not tion, efficiency and innovation to create development and job creation.
intended to be exhaustive. It focuses a market that expands renewable energy Every state with RES includes pho-
Feature 3
*Year signifies when RES first enacted. This may differ from the year RES went into effect.
**Goal is final year target based upon latest revisions to state RES. Many states include requirement
for wholesale suppliers in addition to distribution utilities.
*** Vermont’s SPEED program is voluntary. If the Public Service Commission determines in 2012 that
RENEWABLE ENERGY WORLD
Qualifying Resources:
All States: PV, wind, hydro, biomass, landfill gas, biofuels.
Other resources include anaerobic digestion, fuel cells, geothermal, municipal waste, hydropower,
ocean thermal, wave, tidal, solar space, solar thermal, solar water, distributed generation,
cogeneration.
Source: U.S. Department of Energy, Database of State Incentives for Renewable Energy (DSIRE) as of April 2, 2010.
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GLOBAL WARMING
C
limate change has emerged as an increasing consumption. Low-flow showerheads and front-Ioad- to off-peak hours, accompanied by technology that al-
concern of the American people. So says an ingwashers use less hot water, reducing energy con- lows home computers to monitor energy use in real
October 2007 public opinion poll by CNNI sumption. They also lower overall water usage, im- time, a product of energy efficiency inspired business
Opinion Research Corp., which found that 66 percent portant in a state where, according to the National market innovation.
of Americans believe that the United States should Drought Mitigation Center, 86 of 95 counties are ex-
do what it can to combat global warming. periencing severe to extreme drought conditions. THE GREATEST potential for energy savings and
Virginia took an important step to meet this chal- An example of the potential these types of initia- reduction of greenhouse gas emissions is to be found
lenge earlier this year when the General Assembly tives hold can be found in California, where the Cali- in the transportation sector_Virginia could follow the
set a goal of a la-percent reduction in electricity con- fornia Public Utilities Commission recently approved example of Washington State, which since 1991 has
sumption statewide by 2022 from 2006 levels. Utili- $2.2 billion in what are called utility rate credits Lo required urban-area companies employing more than
ties regulated by the State Corporation Commission expand these and other programs aimed at conserv- 100 to reduce the number of measurable employee
(SCC) are responding by seeking SCC approval to ing energy and expanding renewable energy rush-hour automobile commute trips. Employers do
implement programs that include educating consum- generation.. so by offering incentives - free bus and rail passes,
ers on the value of conserving energy, selling energy- computerized ride matching, shuttles, and work-at·
saving compact fluorescent lighting at discounted TIME OF USE Pricing (TaU) is another approach home opportunities, to name a few .
prices, free home and business energy audits, and Virginia could benefit from. TaU provides an eco- While the Washington program is mandatory, Vir-
buying surplus on-site power generation from private nomic incentive to consumers to shift their energy ginia could achieve the same effect by offering tax in-
industries for resale to other customers. use to off-peak periods and thereby reduce the need centive& to participating companies. In addition to
The General Assembly's action is commendable. for new electrical generating resources. States in the addressing global wanning, this offers the added ben-
The goal of limiting Virginia's contribution to global Pacific Northwest have long used TaU pricing to en- efits of lowering reliance upon imported oil and help-
warming can further benefit from the experiences of courage industrial manufacturers to shift production ing to reduce traffic congestion, perhaps the most in-
other states in reducing energy consumption. Partic- from heavy electricity demand periods to off-peak tractable problem facing Northern Virginia today.
ularly in the western IJ.S., states have'a history of act- times by charging industry a lower cost per kilowatt With a new General Assembly to convene in Rich-
ing aggressively to save energy dating back two dec· hour during non-peak than peak periods. Major com- mond mJanuary 2008, the tiine is right to put into
ades or more. . panies with names like Boeing and Alcoa responded place these and other practices that can combat
Among the steps that Virginia should consider are by scheduling production at airframe manufacturing global wanning and in the process help mitigate traf·
the following, presented in ascending order with re- plants and aluminum smelters to take advantage of fie congestion, bolster energy security, and enhance
gard to greatest energy savings potentia) and com- these cost savings. By lowering business operating economic competitiveness.
plexity of putting them into practice. costs, TOU offers the added benefit of enhancing the
economic competitiveness of these companies. • Matthew Slavin. president olSlavln Consulting Group. has had a
20·year career in energy planning and urban and regional
THE GENERAL Assembly could request the SCC More recently, states as diverse as Oregon, Ari· development. Jason Zeller is assistant chief counsei With the California
tQJ; . . .. . re ates to offer financial reo zona, and Wisconsin have transferred time of use Public Utiltties Commission.
,.' '''.\'
Monday, November 5, 2018 The Daily Journal of Commerce Portland, Oregon
No Grid,
No Gain:
Untangling the
Transmission
Tie-up By Matthew I. Slavin, Sustaingrüp, and Jason J. Zeller,
California Public Utilities Commission
Great strides have been made in would allow wind generated electrons to
enacting state renewable energy be transmitted to major urban markets
standards (RES) in the United States, such as Chicago, St. Louis and Kansas City.
which significantly affect the urgency of Nevada has the highest solar
developing new renewable energy energy potential in the nation. The U.S.
facilities. Also called Renewable Portfolio Department of Energy calculates that 100
Standards and Alternative Energy square miles of Nevada land could supply
Portfolio Standards, over 30 states have all U.S. electricity needs with current
adopted RES mandates. These initiatives commercial efficiency rates. However
are paving a path toward a more econom- as Nevada Economic Development
ically and environmentally sustainable Commission Executive Director Mike
and secure energy future for America. Skaggs has noted, development of
Success to date notwithstanding, one Nevada’s ample solar energy resource is
NORTH AMERICA
primary hurdle facing renewable develop- hindered by the fact that a “significant
ers stems from limitations to the existing portion of the area feasible for renewable
transmission grid. Simply put, efforts to energy generation is not currently con-
integrate renewable generation into the nected to adequate transmission technol-
U.S. energy mix have frequently been sty- ogy.” Nevada’s transmission challenges are
mied by the lack of available transmission not atypical.
RENEWABLE ENERGY WORLD
facilities. For example, the Midwest has How bad is the transmission tie
been colloquially called the “Saudi Arabia up? A white paper jointly issued by the
of wind” because of tremendous wind American Wind Energy Association
resources in the Great Plains. However, (AWEA) and the Solar Energy Industries
this most windswept region of the nation Association (SEAI) estimated that in 2009
tends to be overwhelmingly rural and up to 300,000 MW of wind projects faced
lacks the transmission facilities that potential deployment delays due to an
Transmission 3
inability to connect to the grid. For utility- work operated by California’s RTO (the
scale solar in California alone, the figure Independent System Operator) ties into Transforming the
was estimated at 13,000 MW. a system still regulated exclusively by
Transforming the nation’s existing Nevada. By law, Nevada regulators cannot nation’s existing
transmission system so that it can accom- consider the impacts of investments in the transmission system
modate the needs of renewable developers state transmission system upon California’s
is a significant challenge. For clean energy, access to sun, wind and geothermal energy so that it can
it’s clearly a case of no grid, no gain. farmed in the Silver State. The inability of accommodate the
these two key players to uniformly plan and
Tied in a Knot manage transmission impairs the ability needs of renewable
That transmission access for utility-scale of the California to draw upon Nevada’s developers is a
renewable energy is tied in a knot is not renewable energy resources to meet its RPS
surprising given that America’s electricity target of acquiring 33 percent of its electric- significant challenge.
transmission system is a legacy of a period ity from renewable resources by 2020.
in which large vertically integrated utilities Then there is the issue of finance. While to such maneuvering. The effect of such
planned, developed, owned and financed procedures vary, grid interconnection phantom projects, however, can be to delay
generation. The system grew up within the procedures in general require a renew- and raise costs for more feasible green
regulatory framework of state public utility able energy project developer to apply for energy projects.
commissions that approved transmission a queue position for system impact and Reflecting upon the grid connection
system planning and financing. Often, facilities studies, sign interconnection conundrum, AWEA and SEIA concluded
generation was located near urban areas agreements and then pay for new transmis- “Our nation’s obsolete patchwork of an elec-
where demand is concentrated. Coal plants sion capacity or system upgrades necessary tric grid, while adequate for the era in which
could be near rail lines in out-of-the-way to carry the full generation output to mar- it was designed…have failed to keep up with
places like the Four Corners Region of ket, even if needed upgrades are network significant changes in the structure of the
Arizona, Utah, Colorado and New Mexico. improvements. electric industry.” The question is, what can
Transmission lines were built to move coal- Within this context, two problems stand be done to pave a pathway to getting the
fired generation to load centers. However, out. First, prior to wholesale electric power nation’s green energy assets onto the grid in
unlike footloose coal plants (which can market deregulation, utilities planning new a timely and cost-effective manner?
receive coal from remote sources via rail) generation could act with the assurance
wind and solar must be farmed where the that their costs for building new generation Getting Green Energy on the Grid
wind blows and sun shines. And many of would eventually be rate based by their In October 2009, the Federal Energy
these renewable sites are located where respective public utility commissions. Regulatory Commission (FERC) issued a
existing lines are either absent, undersized However, wholesale market deregulation Notice of Proposed Rulemaking (NOPR),
or already over-subscribed. gave rise to independent project develop- kicking off a broad stakeholder initiative
Within this legacy framework, transmis- ment, meaning that renewable energy aimed at easing integration of renew-
sion system planning evolved along state developers must incur not only the up-front ables into the grid. A good place to start
lines, governed by laws requiring state cost of financing new renewable generat- is with a proposal by AWEA and SEPA
public utility commissions to use a lowest- ing plant planning and construction, but to develop a system of “National Green
cost-to-consumer test when approving also the up-front cost of financing new Power Superhighways.” The proposal aims
transmission improvements. The Energy transmission capacity. This was true even to build a network of new transmissions
Policy Act of 2005 sought to broaden though it may take from three to five years lines capable of moving up to 5,000 MW
system planning to a regional basis by or more from project inception to energy of power from rural solar and wind energy
NORTH AMERICA
enabling groups of three or more states to production for the developer to begin farms to load centers in large urban areas
form regional transmission organizations collecting revenues. As with other form of in the Southwest, Midwest and along the
(RTO). However, the nation’s grid remains a construction, delays in starting a renewable eastern seaboard. Implicit are changes in
patchwork with some transmission capac- generation project can add to its cost. the way new transmission for utility scale
ity collaboratively planned and managed Second, the current system encourages renewable energy is planned and permitted
by RTOs while elsewhere, grid ownership free-ridership, which encourages project and how costs are allocated. A regulatory
RENEWABLE ENERGY WORLD
remains the province of individual utilities developers to try to avoid upfront network- system to govern new large transmission
that range in size from small rural coopera- wide grid improvement costs. Such facilities needed to expand the nation’s
tives to large multi-state systems such as jockeying may account for the proliferation clean energy portfolio would only apply to
Pacificorp and Southern Co. of so-called “phantom projects,” which, new interstate high-voltage transmission
The obstacles posed by this patchwork although entered into the queue, are never and renewable energy feeder lines. In the
can be seen at the California-Nevada built. The relatively low $100,000 cost typi- balance of this article we look at what a
border, where the transmission net- cal for entering the queue may contribute new approach to ensuring adequate grid
YOUR SOURCE FOR NATURAL GAS VEHICLE MARKETS, TECHNOLOGY AND POLICY
MARCH 04, 2015 LEADING NEWS
IN THIS ISSUE LNG tax equalization bill approved Texas NGV incentives generate
LNG tax equalization bill approved by by Senate Finance Committee almost $500 million in economic
Senate Finance Committee ……...….1
output, support 3,000 jobs by
The U.S. Senate Finance Committee has
Texas NGV incentives generating
approved S 344, a measure designed to 2018
millions in economic output,
eliminate the federal excise tax penalty
thousands of jobs…………………....1 imposed on LNG when sold as a transportation The growing number of NatGas fueling
fuel in the U.S. Sponsored by Sens. Michael stations being built is allowing the industry to
Scoping LNG fleet deployment at get a better hand on the economic impacts of
Bennet (D-Colo.) and Richard Burr (R-N.C.),
Oregon’s Fred Meyer stores…….......3 deploying NGVs, developing NGV
the measure is modeled on a companion bill
introduced in the House of Representatives by infrastructure, and the incentives that state
BUS STOP Reps. Mac Thornberry (R-Texas) and Rep. governments offer to help underwrite NatGas
John Larsen (D-Connecticut), HR 905, the fueling station development and fleet
Houston’s METRO negotiates sole LNG Excise Tax Equalization Act of 2015. deployments of NGVs.
source fuel contract for 200 CNG
buses ………………………………..4 Federal Excise Tax on NatGas and Petroleum A case in point is a study recently completed
Fuels by the Institute for Economic Development at
POLICY FOCUS Now With the University of Texas at San Antonio
Change (UTSA). The study examined the economic
Bill introduced to lower sales tax on
LNG/DGE $0.413 $0.243 impact of fleet deployment and NatGas fueling
NGVs in California ……………...…5
Diesel/Gal $0.243 $0.243 station incentives offered under three programs
CNG/GGE $0.183 $0.183 administered by the Texas Department of
Latest updates on NGV bills in current
Gasoline/Gal $0.183 $0.183 Environmental Quality (TCEQ). The Institute
state legislative sessions …………....5
concluded that $52.9 million in grants awarded
Currently, the federal government taxes LNG by the three TCEQ incentive programs
COMMENTARY generated $79.1 million in gross state products
based on the volume of fuel sold, measured in
gallons. The federal excise tax on diesel is also and supported 927 full-time jobs in Texas in
Should you convert to natural gas 2014. According to the analysis, the incentive
assessed volumetrically. Both fuels are taxed
vehicles now that oil is cheap?…...…8 programs are generating significantly rising
by the federal government at a rate of 24.3
cents per gallon sold. But because LNG has economic and job impacts on a year-over-year
NEWS BRIEFS basis (see table page 2).
lower energy content than diesel – It takes 1.7
gallons of LNG to produce the same amount of
Recap of all the NGV news of the past
energy as a gallon of diesel fuel – current The three TCEQ incentive programs are the
two weeks……...………………....…9
federal law results in a gallon of LNG being Clean Transportation Triangle (CTT) Program,
taxed at an effective rate 70 percent higher than the Alternative Fueling Facilities Program
BY THE NUMBERS that at which a gallon of diesel is taxed. (AFFP) and the Texas Natural Gas Vehicle
Program (TNGVP), and the analysis focused
NGV Benchmarking: Station Counts, Enacted into law, S 344 and/or HR 2202 would on investments in NGV infrastructure and fleet
Price Spread Charts………….…….11 revise the federal excise tax on LNG so that it deployment in counties in the Texas Clean
is levied on the basis of LNG’s energy content, Transportation Triangle. This region
PLUS: Funding, RFPs, Events at a rate of 24.3 cents per energy equivalent of encompasses the most heavily populated parts
a gallon of diesel, equalizing the excise tax on of Texas adjoining the major road networks
LNG with that of diesel. Federal law already that connect the Dallas-Fort Worth Metroplex,
taxes CNG on an energy content basis, at a rate San Antonio, and Houston metropolitan areas
of 18.3 cents per the energy equivalent of a (see map page 3).
gallon of gasoline. So the bills would also
harmonize the way the federal government (continued on Page 2 )
taxes LNG with the way it taxes CNG, in terms
of energy equivalency.
(continued on Page 2 )
___________________________________________________________________________
© 2014 AFV Intelligence LLC. All rights reserved.
STRATEGIC PLANNING
Coal plants be gone. Power plant repurposing projects around the nation As new rules to protect
highlight the compelling case for redevelopment and use of cleaner energy.
These projects also offer points of reference for policy makers, public manag- public health spur
ers, business leaders, and community stakeholders to retire power plants in the closure of some
their localities by fostering enterprises focused on clean energy.
150 coal-fired power
Industry analysts predict that environmental and economic factors,
including new federal regulations, will lead to the retirement of dozens of plants, creative site
aging coal-fired power plants in the coming decade. Many old generating redevelopment projects
plants occupy strategic locations in urban areas, often with access to valuable
waterfront. These sites present tremendous opportunities for new civic and
generate civic pride and
private uses such as riverfront housing, shops, and offices, as well as museums, business rather than
parks, and other community amenities. dirty power.
Useful examples for redeveloping early 20th century power plant sites
include an impressive large-scale redevelopment of the Seaholm Power Plant
in Austin and the grand vision for redeveloping Station B in Sacramento
by 2013. The Homan Square Power House in Chicago achieved a powerful
fusion of mission and design. The redeveloped Pennsylvania Railroad Pow-
erhouse in Queens, New York, and the Station L Power Plant in Portland,
The PowerHouse Condominiums were built on the site of a Queens New The PowerHouse Condominum is a Queens building structured to evoke
York plant that supplied steam to electrify the Long Island and Pennsylva- the old chimneys of a power plant that for decades electrified the Long
nia railroads. Island and Pennsylvania railroad.
Photo: CGS Developers Photo: CGS Developers, The PowerHouse Condominiums
The Wharf at Rivertown is along the Delaware River outside Philadelphia In 2013 Pacific Gas & Electric Station B is slated to re-open as the
and utilizes some of the building of the old Chester Power Station. Powerhouse Science Center in Sacramento, California.
Photo: The Wharf at Rivertown Photo: Andrew Frolows/Powerhouse Museum
developers also can take advantage of smaller opportuni- Community Involvement and
ties to reduce costs. Implications
Where a project includes a museum, power plant In many communities, aging coal-fired generating sta-
equipment not sold for scrap metal can be reused for tions are part of local history and development. These
exhibits. In fact, every detail is fair game: as part of the plants have played a role in the surrounding economy;
Lucky Strike redevelopment, Odell Associates reused projects to redevelop and repurpose them should
as a wall an original door; during the building phase support community goals by delivering civic value,
at Chester Power Station, creative construction teams increasing local government revenues, and fostering job
reused cranes and the existing switchgear. growth. For example, at the renovated Ottawa Power
46 WWW.THEPUBLICMANAGER.ORG
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LEEDS RETROFITS
News 810g Podcast Video Finance Companies Products Jobs Events Magazines Expo About
Renewable Energy Solar Energy Wind Energy Geothermal Energy Bioenergy Hydropower
The President's pronouncement, the essential role solar and wind energy have to play in the fight against global
warming, the critique that renewables are overly reliant upon govemment assistance and congressional debate
over a national cap and trade energy and climate bill make this a good time to take stock of how renewables stack
up in terms of federal energy subsidies. A short primer on the different types of federal energy subsidies at work
Article Tools provides a useful point of departure.
Share ThiS Story Federal energy subsidies come in many different shapes and sizes. However they can be broadly divided into
three main categories.
Add 10 Bookmarl<s
Tax credits constitute the largest source of federal assistance to the energy sector. According to a 2006 study
Pr1nter Fnendly Version prepared by Washington D.C. consulting group Services Inc (MISI), tax credits
11 Comments accounted for an estimated 45 percent of all federal energy support between 1950 and 2003. An analysis by the
Texas Comptroller of Public Accounts put this number at 65 percent for 2006. Tax treatment also comprises one of
the earliest ways by which the federal government subsidized energy development and production, dating to 1917.
Artlde Tool Sponsor when income tax credits were established to encourage oil drilling.
Investment and production tax credits for solar, wind, and geothermal energy fall into this category as do tax
incentives for ethanol and other biofuels. So does the oil depletion allowance, established by the Revenue Act of
1926 that allows downstream fossil fuel producers to make deductions from their gross income and the Foreign
Tax Credit, the largest single energy subsidy, which allows U.S. oil and gas companies to claim a credit against
revenues derived from overseas production that would be taxed at a higher rate if produced domestically
Another type of subsidy encompasses direct cash grants, loan guarantees and similar targeted disbursements.
These accounted for about 20 percent of federal energy support from 1950 through 2003 and 29 percent in 2006.
The renewable energy cash grants authorized under the American Recovery and Reinvestment Act (ARRA) ,fall
into this category.
Also included is federal spending that began in the 1930s to construct the Columbia-Snake River and Tennessee
Valley hydroelectric systems and the $1 billion authorized under ARRA for FutureGen, the coal-carbon
sequestration pilot project slated for construction in Illinois with uncertain prospects for success.
A third subsidy platform revolves around regUlation: creating a regulatory climate that encourages energy
investment. Regulatory subsidies are as old as tax incentives, dating to 1917 when the U.S. Fuel Administration
moved to ensure sufficient oil to fuel America's entry into World War I by creating a petroleum quasf.cartel that
boosted oil prices and profits only six years after the breakup of Standard Oil. Shortly thereafter the oil industry
formed the American Petroleum Institute to lobby for additional federal largess.
Some critics argue that regulation should not be characterized as a subsidy. However, a key feature of government
subsidies is that they influence investment behavior by lowering risk or by raising demand, and in this, regulatory
provisions playa substantial role. The $10 billion cap federal law imposes upon corporate liability for a commercial
nuclear generating accident is an example of a regulatory subsidy. This cap insulates the nuclear energy industry
1 of 5 4/30/10 4:28 PM
Getting to a National Renewable Energy Standard I Renewable Energy World Page 2 of 6
Renewable energy executives are rolling up their sleeves for what promises to be a contentious batlle this fall to
gain Senate approval of the American Clean Energy and Security Act, including establishment of a mandatory
national renewable energy standard (RPS).
How difficult will the batlle be? The House of Representatives passed the Waxman-Markey energy and climate bill
by the slimmest ot margins. with 219 votes in favor and 212 against. The House bill provides for 20 percent of the
nation's electricity supply to come from renewables by 2020, with energy efficiency improvements allowed to
account for a quarter of this. Although a recent Washington-Post-ABC news polt shows fully 91 percent of survey
respondents support expanded wind and solar generation, the bill reported out of the Senate Energy and Natural
Resources Committee (ENR) in July set the 2020 RPS at only15 percent. According to the Nallonal Renewable
Artiele Tools Enetgy Laboralory (NREL), this standard will deliver no more new renewable capacity than what is likely to come to
market in the absence of a federal RPS.
email This Story The renewables industry would like to see the federal RPS at 25 perCent in 2020, with a 10 percent requirement
D Sham This Slory beginning in 2012, as opposed to the 6 percent in the House bill and 4 percent in the Senate ENR version.
According to Roby Roberts, Senior Vice President for External Communications at Vestas, strategy for
Add 10 Bookmarks strengthening the renewable standard will focus upon the 3 principles of climate, jobs and security, or planet,
prosperity and protection. Here are some suggestions to sharpen the point.
Printer Fnendlv VerSIon
Planet
A _ Tool
Cap-and-trade is the centerpiece of the bill the Senate will consider, and renewable energy advocates are keenly
aware of the tie between global warming and RPS. The Amellcan Wind Energy hsoclatlon (AWEA) forcefully
argues that "wind power is a powertul climate solution, ready to deliver emissions reductions that are large in scale
and effective immediately" while the Solar Energy Induslrles AssOCiation (SEIA) points to the need for a "carbon
constraint optimized for solar deployment" so that solar energy can provide a 'clean-energy wedge' in reducing
green house gas emissions.
Sticking to the need to limit carbon emissions as a path to a stronger RPS is a necessity. While the cost of new
renewable capacity continues to come down, it is still higher than conventional coal generation. Short of a carbon
tax or adoption of the type of feed-in tariff described by Dan Martin In AenewableEnergyWorlr;l com. cap and trade
offers the best avenue to forcing a price on coal generation that reflects its environmental externalities and levels
the playing field for renewables.
Geothermal Energy Association Executive Director Karl Gawell sees a scenario in which climate and energy might
be broken into two separate bills if the going over cap and trade gets too tough in the Senate. Possibly, but
according to Congressman Earl Blumenauer, Vice-Chair of the House Committee on Energy Independence and
Global Warming "Climate change is the glue that holds the Waxman-Markey bill together. The whole is greater than
the sum of its parts."
Breaking the bill apart could further estrange the renewable industry's environmentalist allies whose support for the
legislation is already frayed due to the decision 10 give away rather Ihan auction carbon credits. Industry strategists
should keep this in mind that at a time when "rally round the rotor" unity is needed, and environmentalists have a
key role to play in organizing rallies 10 counler the Astroturt campaign against Waxman-Markey being underwritten
by the American Petroleum Insillute.
Prosperity
Opponents are basing their campaign on jobs and cost. They have an opening here. The Post-ABC poll shows that
support tor the energy and climate bill drops from 58 to 29 percent if household electricity costs rise from $10 to
$25 per month.
Opponents cite studies that show that cap-and-trade will result in job loss, that the energy and climate bill will cost
the average American household as much as $1,900 per year and lower gross domestic product. Climate and
energy advocates will counter these, starting with the Pew Center on Global Climate Change study shOWing that
modernizing our energy sector will create 1.7 million new jobs and the 2008 report by Navigant Consulting Group
projecting that an expanding solar energy sector could employ 440,000 and lead to the creation of an additional
750,000 jobs in 2016. Analyses by the Congressional Budget Office and Environmental Protection Agency puts
household costs in the much more likely range of $140-$175 per year than the numbers put forth by opponents.
RENEWABLE
ENERGY This said. conflicting assumptions make it hard for most people to sort through competing economic studies.
W-RLD Affention should be paid to pUlling a human face on the renewable energy jobs story. Recount the tale of Cllppel"
Windpo.....er. which in 2005 took over a former printing press manufacturing plant in Cedar Rapids, Iowa that had
Mvtllnse ).'Im uS been closed for four years and began producing wind turbine blades with employment growing to 400 in 2008. And
highlight Sola,Wnrld's acquisition of a former 480,000 square foot Komatsu manufacturing plant in Hillsboro,
Oregon where 1I1e company produces solar cells with employment that may reach as high as 1,000.
Attention should also be directed towards tying European-based renewable energy firms more closely to the
domestic U.S. market. For example, Spain's lbertlrola won 5 of the 10 renewable energy cash grants totaling $500
million that were announced during the first week of September and authorized under the ARRA recovery act. At a
time when economic insecurity is stirring protectionist instincts, following Toyota's example by making a
commitment to increase the share of domestically produced components that go into renewables technology sold in
America would be a good step.
Protection
from the financial risk of a catastrophic accident. Absent this, sufficient capital could not be attracted to build
nuclear plant Ethanol additive requirements likewise constitute a regulatory subsidy, as will a federal renewable
energy standard (RPS) when one comes into effect
Cap and trade would place a steadily declining ceiling on GHG emissions, allowing power plants, refineries, and
other large tndustrial emitters to trade allowances that give them nexibility in meeting GHG reduction targets and
provide capital to fund development of new low carbon technologies. It seeks to price fossil fuels at a level that
renects the externalized cost of their GHG emissions upon the environment. This approach combines a regulatory
and a market-based mechanism to promote climate friendly technologies and create increased demand for clean
renewable energy.
Evaluating federal energy subsidies is something akin to alchemy. The myriad of ways in which they are funded,
managed, and monitored, and year-to-year changes in legislation and budgets make an exact accounting difficult.
This said, the Environmental Law Institute (ELI) completed a study for the period 2002 through 2008 in
conjunction with the Woodrow Wilson International Center for Scholars which, coupled with the MISI study,
illuminates how federal energy subsidies affect renew abies and other competing fuels.
These studies connnm conventional wisdom that fossil fuels have been the primary beneficiary of federal energy
subsidies. Oil and gas garnered 60 percent of an estimated total of $725 billion in federal assistanoe between 1950
and 2003, with oil alone taking 46% of the total. Coal took 13 percent. Next was hydroelectric at 11 percent and
nuclear at 9 percent. not counting the liability cap sl!bsidy which is an implicit avoided cost and impossible to
quantify. At the back of the pack are wind, solar, geothermal. and bio-fuels, recipients of only 6 percent of total
energy sector spending during this period.
Given the recent vintage of renewable technologies, use of a 1950 baseline for breaking down how federal energy
subsidies have been parceled out may not paint a fair picture. However, the more recent 2002 - 2008 period
continues to show fossil fuels as dominant. According to ELI, subsidies to fossil fuels totaled $72 billion, with most
going to oil and then gas.
Support for coal-carbon capture and storage received $2.3 billion of this total. Fossil fuels took almost two-and-
a-half times more in subsidies than renewables, which received $29 billion. Furthermore of this $29 billion, $16.8
billion went to com-based ethanol whose climate friendly credentials are increasingly open to question.
Only $12.2 billion. or 16.6 percent of what fossil fuels received went for wind, solar, geothermal. hydropower, and
non-corn based biofuels and biomass. This is better than in preceding years but much less than what is needed in
the face of global warming, a point understated by ELI Senior Attorney John Pendergrass when he introduced the
Advertise wilh us ELI study's results by saying "These figures raise the pressing Q.uestion of whether scarce govemment funds might
'be bette·r allocated to move the United States towards a low-carbon economy."
Featured Total JOIn Tolal Acce,;s MarkehngRejoinder to the Rap Against Subsidies for Renewables
Access Partners
Critics argue that renewable energy technologies cannot compete on price with fossil fuels without public
subsidies. It's true to date that renewables' return per dollar of federal assistance remains higher than for fossil
fuels. According to the U.S. Energy Information Administration (EIA), federal subsidies for conventional coal
generated electricity production in 2007 equaled $0.44/MWh (megawatt-hour). The equivalent figure for wind was
$23.37 and for solar, $24.34 per MWh.
But these critics miss the mark. Commercial scale federal subsidies for renewables are less than twenty years old,
dating to production tax credits enacted under the Energy Policy Act of 1992 to bolster national energy security in
the aftenmath of the first Gulf War. Furthermore, production tax credits for renewable energy have been subject to
on again, off again congressional approval. This contrasts with fossil fuel subsidies, recipients of largely continuous
and predictable subsidies since 1917.
Nor are the costs of subsidies for renewables out of line with other emerging and evolving clean energy
technologies. For example, federal subsidies for refined coal technology that removes moisture and certain
pollutants from sub-bituminous and lignite in 2007 equaled $2981/MWh. If refined coal and FutureGen are any
indication, yet untested clean-coal carbon sequestration will require vast federal expenditures on a scale probably
surpassing what has been directed to wind and solar.
Renewables do not export environmental externalities such as drinking water contamination stemming from coal
mining in West Virginia and other states, as recently reported in the New York Times. There is no need for a liability
cap with wind and solar of the sort needed to fuel investment in commercial nuclear generation.
The reality is that federal subsidies for renewables have played an important role in generating economies of scale
and investment capital for improved technology that have driven down the cost of photovoltaic solar energy by 50
percent to about $3 per watt in the past decade and dropped the cost of wind generated electricity to as low as 4
cents/kWh per in some areas today. These costs wilt only decline further as the market for renewables grows and
technology improves.
Former longtime Saudi oil minister Sheik Zaki Yamani once famously said "the Stone Age did not end for lack of
stone, and the oil age will end long before the world runs out of oil". Now would be a good time for critics of
renewable energy subsidies to get the rocks out and for the U.S. to put in place long tenm federal subsidies that will
provide the stable and predictable investment climate needed to accelerate America's transition to a modern and
clean renewable energy economy.
The information and views expressed in Ihis article are those of the author and nol necessarily those of
RenewableEnergyWortd.com or the companies thaI advertise on ils Web site and other publications.
2 of 5 4/30/104:28 PM
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Monday, August 5, 2019 The Daily Journal of Commerce Portland, Oregon