Renewables industry officials said Tuesday that wind, solar and other green energy technologies are poised for astonishing growth rates over the next two decades if Congress and the White House can agree on policies that provide a stable environment for growth.
At a press event sponsored by The Energy Daily and BP America, the officials said the Energy Department budget provides adequate funding in some cases but does not address key issues slowing the deployment of all renewables, such as the absence of a national standard for interconnecting solar and other distributed generation to the grid.
President Bush’s fiscal year 2007 budget proposal included $148.4 million for solar research, a 78.5 percent increase over previous-year funding levels. If approved by Congress, the proposal could boost the solar industry to install roughly 5 to 10 gigawatts of installed capacity by 2016-a huge jump from the nearly 600 megawatts now installed, said Rhone Resch, executive director of the Solar Energy Industries Association.
“So what we’re talking about is a 20-fold increase in the use of solar in the next decade,” Resch said.
But federal support for renewables over the past decade has been consistent only in its inconsistency. Until last year’s congressional decision to extend for three years a 13-year-old tax credit for energy produced by certain renewables, federal lawmakers have allowed the production tax credit to expire several times before they renewed it, sending unmistakable signals to Wall Street that the investment climate for the technologies was anything but certain.
“[Fiscal] 2006 was actually a real down year for wind,” said Rob Gramlich, policy director for the American Wind Energy Association, explaining that Congress last year cut President Bush’s $43 million proposal for wind research by $5 million, and allowed lawmakers to insert about $13 million in earmarked projects.
“That brought us to $26 million, which is almost a 10-year low,” Gramlich said. “So restoring the program is absolutely essential, and focusing the program on the key priorities is critical.”
But clear signs are emerging that at the state level, at least, lawmakers are recognizing the multiple benefits that can result from a concerted, long-term effort to speed deployment of renewable technologies while lowering their costs.
In January, the California Public Utilities Commission approved a $2.9 billion incentive program to install as much as 3,000 megawatts of solar generating facilities in the state by 2017.
In addition, the Western Governors Association is poised to consider this spring an array of options for bringing on-line 30,000 megawatts of clean energy by 2015, increasing energy efficiency 20 percent by 2020 and providing adequate transmission for the 18-state western region.
That Western political leaders are thinking long term about solar, wind and other renewables may be the most favorable portent of good things to come for the clean energy technologies, said Michael Eckhart, president of the American Council of Renewable Energy.
“The Western Governors Association has basically done what the Congress has been unable to do,” Eckhart said.
Eckhart minced few words in criticizing the Bush administration’s fiscal year 2007 budget, which he said does not reflect the benefits of renewables in addressing the twin threats of America’s dependency on imported oil and global warming.
“Oil imports and climate change are the two issues driving our industry today,” Eckhart said. “In the last five years, the scientific community has completely galvanized and proved climate change is indeed happening, but where is this administration’s response to that? Zero response. Secondly, energy prices have doubled, even in our homes. Where is the administration in terms of new technology funding?”
Eckhart added that energy markets are distorted in ways that favor fossil and nuclear generation at the expense of renewables. Coal prices, for example, do not include external costs of global warming and some air pollution, while the price of nuclear generation does not reflect the cost of federal insurance on catastrophic accidents, he contended.
At the same time, while the Federal Energy Regulatory Commission has established policies and rules to establish a competitive wholesale electricity market, the absence of a national interconnection standard blocks many solar installations and small wind farms from connecting to the grid.
Congress in the 2005 Energy Policy Act included a requirement that states consider interconnection standards, but states that have already acted often have approved rules that are incompatible with those of other states. Resch said Congress needs to step in and require a uniform set of rules to allow small electricity producers to connect to the grid.
Combined with net metering requirements that allow green energy consumers to sell unused power back into the grid, a national interconnection standard would address the intermittent generation problem faced by wind, and to a lesser extent, solar, by allowing the transmission system to act as a storage medium for electricity generated by these technologies, Resch said.
“Right now we don’t compete in a number of places because there is no national interconnection standard,” he said. “We would like to see the states required to open up the grid to all forms of electricity.”
Gramlich said he was hopeful about the fledgling reform movement taking shape in Congress to address the exponential growth in appropriations earmarks that divert research money to demonstration projects favored by individual lawmakers.
Gramlich said that the wind industry would like Congress to approve a long-term extension of the production tax credit as well as a national renewable portfolio standard-a requirement that generators obtain a specified percentage of their electricity from qualified renewable resources.
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