The Waxman-Markey bill would require that 20% of the nation’s power supply come from clean energy (15%) and efficiency (5%) by 2020. But wouldn’t the U.S. have reached those mild targets without any government intervention, through natural market growth? Would the bill’s mandates have any effect at all?
A spate of recent analyses have argued that the bill’s Combined Efficiency and Renewable Energy Standard, or CERES, would induce no new deployment of renewable energy over and above the business-as-usual scenario. In other words, Waxman and Markey might as well not have bothered.
(For such analysis, see the National Renewable Energy Laboratory (PDF), the Southern Alliance to Save Energy, and Jesse Jenkins.)
There’s not a ton you can do to shine this turd (pardon my French). Southern and midwestern legislators just don’t believe they have viable, scalable low-carbon alternatives other than CCS, which is a long way off. So they’ve whittled the target down and will probably whittle it down further.
If there’s any silver lining hidden in the cloud, it’s here in S610b1:
For each of calendar years 2012 through 2039, not later than March 31 of the following calendar year, each retail electric supplier shall submit to the Commission an amount of Federal renewable electricity credits and demonstrated total annual electricity savings that, in the aggregate, is equal to such retail electric supplier’s annual combined target ...
Consider: the bulk of renewable energy growth in the business-as-usual scenario is going to happen in specific regions, mainly in states that have passed RES’s of their own. Think California sun, Texas wind, that kind of thing. But the national RES doesn’t require that the nation get 20 percent of its power from R&E. It requires that every utility get 20 percent from R&E, or at least every qualifying* utility. Even utilities that under business-as-usual would continue getting basically all their power from coal will have to start developing clean alternatives. (Worth noting: without the RES many utilities would satisfy any cap entirely by shifting to natural gas.) Think Southern Company and AEP.
That’s a bigger deal than it seems. Regulated utilities in the South and Midwest have been playing the electricity game a particular way for generations. There’s a cozy old boy’s network of regulators and legislators around many of these utilities that does not engage in much outside the box thinking. Forcing them to start looking for clean generating capacity, even if in the beginning it’s only biomass and some desultory efficiency, involves a cultural shift which isn’t entirely captured by the numbers.
So even if, when 2020 rolls around, national R&E numbers are where they would have been without an RES, it will nonetheless have prodded the nation’s stodgiest, most hidebound utilities to start taking some action, to break out of old habits, to ... God forbid ... innovate.
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* Apparently there are squirrely issues around utility exemptions—the standards were loosened in committee. John Wilson at SACE has been all over it. Some 50% of TVA’s holdings will be exempt from RES standards. Blargh.
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Comments
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Clifford Wells Posted 2:50 pm
16 Jun 2009
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Jesse Jenkins Posted 3:42 pm
16 Jun 2009
The scenario you paint is one plausible scenario and would indeed be "a faint silver lining" to this otherwise pretty farcical RES. Unfortunately, the bill could also result in nothing but transfer payments from states with low clean energy deployment to those with higher clean energy deployment (like Texas, California, etc. driven by state RESs). John Wilson at SACE gets into this somewhat, and so does UCS (in their low deployment scenario).
The problem: under the federal RES, two renewable energy credits/certificates (aka RECs) are created for every megawatt-hour (MWh) of renewable electricity produced. One can be used for compliance with a state RES and one for federal compliance with the RES. If a utility in California or Texas, for example (or any other state with a state RES higher than this federal standard) needs 15 state RECs to comply with their state RES, they'll produce 15 units of renewable electricity. They'll also get 15 federal RECs for the same electricity MWhs. Now say they only need 10 to comply with the federal RES. They now have 5 federal RECs they can sell to utilities in Tennessee or Georgia or Oklahoma and let those utilities off the hook from their federal requirements too.
That's a clear case of double counting but as the bill stands, it's up to each state with a state RES to decide if they want to let their utilities do this, or if they will require retirement of the excess federal RECs that match the state RECs required by their RES. If they don't do that, states with RESs higher than the federal standard will only be helping other states w/out RESs comply with the federal standard. It won't result in additional renewable electricity generation.
Why the heck would a state want to allow that? Well, because their utilities will net the proceeds of those REC sales - hence the transfer payments from South and East to West and Midwest. Their utilities will argue vociferously (as they did in Oregon when I was a renewable energy advocate there and had to deal with this issue the last time an RES was debated in Congress in 2007 and 2008) that they will use the proceeds to cut their customers' utility bills and that not opting to do this effectively means states are requiring higher rates for their customers (and they'd be bad bad people for doing that, right?!).
This is a fairly compelling argument that will have to be fought off in every state that has an RES exceeding the federal one (which is most of them). In many of those states, it will likely be a losing battle, since Public Utility Commissions often put rates before any other priority (that's usually their top priority).
This turd stinks any way you step on it.
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ids Posted 5:08 pm
16 Jun 2009
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ed abbey Posted 5:00 am
19 Jun 2009
the beginning it’s only biomass..." Whoa! Reality check: they've expanded the definitions in Waxman-Markey that would allow massive clearcutting of our CARBON SEQUESTING forests to feed big bimass incinerators. Also, many on those incinerators will be burning C&D waste containing toxins, as well as burning toxic trash. "Clean generating"? We don't think so!
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