Will the USA take its first big step towards green energy?

The US House of Representatives has recently passed an energy bill that supporters hope will steer the country towards the greater use of clean, sustainable energy sources and greater energy conservation.

One of the most controversial provisions of the legislation is a renewable portfolio standard (RPS), which requires private utilities to source 15 per cent of their electricity from renewable sources, such as solar or wind by 2020. The lead sponsor was Congressman Tom Udall, a Democrat from New Mexico. Interestingly, in the week leading up to the vote Udall lowered the mandate from 20 per cent to 15 per cent in an effort to broaden support – a tactic that clearly worked because it was approved in a 220 to 190 vote. Furthermore, of that 15 per cent states are allowed 4 per cent of that target to come from energy efficiency measures.

What is particularly important about the RPS is that its requirement applies to all states. The situation up to now has been that the investment in renewable energy has been highly variable across the country. As an example, California is currently on track to produce 20 per cent of its energy from renewables by 2010, while states in the Midwest and South have invested very little in this area.

Opposition to the RPS requirement, which came from representatives from Texas, and states in the Midwest and Southeast, feared that it would ultimately raise consumers’ electricity bills. Congressman Rick Boucher, a Democrat from Virginia argued that, “Renewable sources of electricity generation are truly regional in nature, and not every region of the country has them in sufficient quantity.”

However, supporters countered that argument by saying that each state had access to some form of renewable energy whether it be solar, biomass, wind, geothermal or hydropower. Jay Islee, a Democrat from Washington noted that the USA is better located for solar power than Germany, which is rapidly installing solar panels.

It is important to mention that power generation from renewables is not a completely new concept for the United States, and in fact 24 states already have renewable electricity standards. According to the American Wind Energy Association, the US wind energy industry is on track to install over 3000 MW of wind power generating capacity this year, with Texas likely to account for about two thirds of new installations.

This makes the announcement from leading utility Duke Energy that it plans to use its recently purchased Tierra Energy unit to create a wind energy division in its unregulated business all the more interesting, and may be one of the first indications of a sea change in the utilities’ attitude to renewables.

Furthermore, a number of key, large-scale solar energy demonstration projects have been based in the USA. One of the most recent is Acciona Energy’s Solar One project in Nevada, which is a 64 MW solar power plant that uses parabolic trough technology. If the plant functions as well as expected it is likely that its capacity will be expanded to several hundred megawatts.

The energy bill also includes a four-year, capped extension of the wind production tax credit, and extends the 30 per cent solar energy investment tax credit to 2016 – all great news for the sector. However, strong criticism for the energy bill has come from the Republicans, saying that the legislation does nothing to boost the USA’s traditional energy supplies and promote nuclear power.

The fate of the bill, however, is far from assured as President Bush’s senior advisors are likely to recommend he vetos the bill, so this big step towards renewables may well be left blowing in the wind.

Warmest regards,
Heather Johnstone
Senior Editor

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