White House, Job Creation Keys to a Stronger Renewable Energy Standard

Jul 7, 2009

During the presidential campaign, Barack Obama advocated for a renewable electricity standard that would require utilities to obtain 25% of their power from renewable resources by 2025.

By the time the climate bill got through the U.S. House, though, the RES had been watered down to 20% by 2020, with loopholes allowing states to get away with as little as 12%, and even less if they can make carbon capture technology work. Several independent analyses and the EPA have concluded that such a tepid law would spur about as much growth in renewable energy as no federal law at all.

Now, the climate ball is in the Senate's court, and industry, environmental and trade groups are digging in in an attempt to resuscitate the RES to its full potential as a force that can shift the energy industry's focus from coal to wind, solar and other renewable sources.

"Right now, as written, the House bill is below business as usual," says Marchant Wentworth, Washington representative for clean energy for the Union of Concerned Scientists.

"It's below the level of renewables that you would get from just the state renewable electricity standards that are now in place and the additional renewables deployment that was put in place as part of the stimulus package. Those two things yield a certain percentage, probably about 9.3 or 9.4 percent, and the House bill comes in at 8.8 percent percent."

Wentworth sees potential for support for a stronger standard emerging from the Senate, with 60 Democrats in the chamber and Maine Republicans Olympia Snowe and Susan Collins likely on board.

The challenge, just like in the House, will be securing the votes of enough Democrats from rural and Southern states that rely heavily on coal power. Supporters have their eye on about 15 Democrats who could tip the scale — and who are likely to demand more industry concessions for their votes, concessions that won't include a stronger RES. The Senate Energy and Natural Resources Committee already offered a weaker version — 15% by 2021 — accompanied by more off-shore oil drilling.

The key to restoring the renewable electricity standard may be getting the White House to flex some muscle, advocates say.

In this case, the president has an increasingly good reason to beef up the standard: his promise to America to provide millions of new, green jobs to turn around the economy. Vice President Joe Biden acknowledged over the weekend that the economic crises was worse than anticipated, with unemployment at 9.5 percent, and he promised: "The second hundred days, you're going to see a lot more jobs created."

A stronger RES and energy efficiency requirements can create green jobs right away, and save consumers money, Wentworth says. A Union of Concerned Scientists study in March found that a 25% by 2025 RES would create almost 300,000 U.S. jobs in manufacturing, construction, maintenance, agriculture, forestry and other sectors, plus add $263 billion in investments in new technology.

"It's the cheapest, quickest, easiest way — combined with energy efficiency — to get your trifecta. The trifecta is, you create jobs, save consumers money and then there's this little thing called climate change," Wentworth says.

Most advocates lobbying Capitol Hill for a stronger RES are keeping their strategies close to the vest, but groups like the newly formed RES-Alliance for Jobs, backed by 22 renewable energy companies and associations, are already hitting the Washington airwaves and publications with ads spelling out how much the country could benefit from a stronger standard.

The proposed federal RES could be strengthened in several ways, with the most obvious improvement being strengthening of the bill's renewable energy targets and ramp-up.

"The number one issue is the percentages and how they are proposed. They will maintain status quo through 2012, if not decrease the amount of renewables, because the American Wind Energy Association and other trade groups have demonstrated that we're going to lose jobs if we don't promote an RES that's more effective," says Bob Cleaves, president of the Biomass Power Association.

"Our number one focus is on increasing the rate at which renewable energy is mandated in the law."

The current bill would aim for 6% electricity generation to come from renewables by 2012; Cleaves's organization is pushing for 12% by 2012.

The Union of Concerned Scientists is also advocating to remove a less prominent provision, slipped in during the House negotiations, that would allow new nuclear and carbon-capture power to count toward reducing a utility's renewable electricity target.

Another change in the House bill to secure votes limited the RES to applying only to large utilities, those selling more than 4 million megawatt-hours per year; previously, the bill had only exempted those selling less than 1 million. The difference: originally, about 460 billion kilowatt-hours of power was exempted; under the change, 830 billion kilowatt-hours would be exempted from the RES.

Renewable energy companies argue that a strict RES — renewable energy only — is crucial for them to compete with cheaper fossil fuel-based power.

"The renewable energy such as wind and solar as it stands today is not cost competitive with fossil fuels," says Frank Middleton, vice-president of marketing at Opel International, a solar product supplier.

"A renewable electricity standard is the kind of thing that it's the government's job to do — [to invest in] necessary infrastructure to build the economy."

Twenty-nine states have made that investment with their own renewable electricity standards, some of them stricter than the proposed federal law. The stimulus package approved earlier this year is also giving renewable energy a big boost that the Energy Information Administration estimates will quadruple wind generation from its current 52 billion kilowatt-hours a year to 200 billion in 2013 and increase biomass from 40 billion kilowatt-hours a year to 65 billion by 2013, by the EIA estimate.

Taking those numbers into consideration, the EPA determined that the House-passed American Clean Energy and Security (ACES) bill would produce less renewable energy generation than a business-as-usual scenario. The EPA projected that ACES would produce 39 gigawatts of new renewable energy capacity by 2020, compared to 40 in the business as usual estimate, and 41 GW by 2025, compared to 43 in the business as usual projection.

The American Wind Energy Association and wind power manufacturers recently sent a letter to Congress members laying out the business argument for a high target, noting in particular competition from countries like China, which just announced it would construction this month on a 20 gigawatt wind farm with a goal of 100 gigawatts of wind power by 2020.

The AWEA's letter stated:

"With an RES, investors can reasonably estimate whether a proposed new manufacturing facility will be profitable over a 10-year or longer time horizon. The U.S. cannot expect manufacturers to continuously commit to new manufacturing facilities and take the risk of investing billions of dollars in wind facilities when the U.S. itself is not willing to commit to renewable energy."

 

See also:

ACES Low for the Solar Industry?

Climate Bill Effectively Zeros Renewable Energy Standard

Renewable Energy: 'An Opportunity America Can't Afford to Miss'

Letter to Pelosi: 20 Environmental Groups Call for Stronger Climate Bill

Democrats on the Waxman-Markey Fence Worried about RES, Allocations

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