Monday, September 14, 2009

National Renewable Portfolio Standards


Getting to a National Renewable Energy Standard

by Matthew I. Slavin, Ph.D.
Renewable energy executives are rolling up their sleeves for what promises to be a contentious battle 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 battle be? The House of Representatives passed the Waxman-Markey energy and climate bill by the slimmest of 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 poll 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 theNational Renewable Energy Laboratory (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.
The renewables industry would like to see the federal RPS at 25 percent in 2020, with a 10 percent requirement 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 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.
Planet
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.  TheAmerican Wind Energy Association (AWEA) forcefully argues that “wind power is a powerful climate solution, ready to deliver emissions reductions that are large in scale and effective immediately” while the Solar Energy Industries 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 RenewableEnergyWorld.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 to give away rather than 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 to counter the Astroturf campaign against Waxman-Markey being underwritten by the American Petroleum Institute.
Prosperity
Opponents are basing their campaign on jobs and cost. They have an opening here. The Post-ABC poll shows that support for 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 750,00 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.
This said, conflicting assumptions make it hard for most people to sort through competing economic studies. Attention should be paid to putting a human face on the renewable energy jobs story. Recount the tale of Clipper Windpower, which in 2005 took over a former printing press manufacturing plant in Cedar Rapids, Iowa that had been closed for four years and began producing wind turbine blades with employment growing to 400 in 2008. And highlight SolarWorld’s acquisition of a former 480,00 square foot Komatsu manufacturing plant in Hillsboro, Oregon where the 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 Iberdrola 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
Expanding domestic renewables will play an important role in insulating the U.S. from price volatility and supply disruptions linked to imported hydrocarbons. Beyond this, the Department of Defense sees global warming as increasing expenditures for humanitarian interventions in regions that will experience sea level rise, flooding and drought. Hunger and mass migrations of displaced populations across international borders are likely to stoke wars and breed terrorism. Retired Marine General Anthony Zinni summed up the military’s concerns as follows: “We will pay to reduce greenhouse gas emissions today…or we will pay the price later in military terms…and that will involve human lives.”
The Defense Department already derives 10 percent of its power from alternative sources and is looking to expand use of wind and solar energy. The military is a poster child for why we need to tackle global warming and expand renewable energy, so call in the troops. Doing so can be particularly effective in reaching out to skeptics who continue to doubt the role of anthropomorphic emissions in warming of the atmosphere.
Opposition ensures that there will be a lot of heat generated as the energy and climate bill moves through the Senate. Sticking to the strategy of planet, prosperity and protection offers the best path forward for bolstering the role renewable energy plays in mitigating and adopting to global climate change.

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