U.S. Push for Renewable Energy
For years the United States, along with many other countries, have been trying to find alternative sources of power that can rival the price and output of fossil fuels. While solar, wind, and hydropower are all well known sources of power that we have been using for decades, we have never been able to produce the amount of energy that a coal or natural gas power plant could produce for the price. Although, renewables have started to gain a lot of ground in the battle over American power. In recent years, many incentives from the federal government and state mandates and requirements have been put in place to help boost the renewables industry. These incentives and mandates have helped develop new technologies that lower price and increase output. They also help payoff large projects through tax credits and incentives. Along with a growth of large cities like Austin, Texas and Seattle, Washington paying for more renewable energies than non-renewable, there is more demand and incentive for power generation by renewable sources.
In individual states, renewable portfolio standards have set time frames for getting renewable energy put into effect by certain fates. In 1999 governor George Bush signed the legislation to put in place a minimum requirement for renewable energy in Texas. A minimum was set at an additional 400 MW by 2003, 850 by 2005, 1,400 by 2007, and 2,000 by 2009. While these numbers were easily met, extensions were made to help push for greater goals. The latest being a 10,000 MW goal for 2025. 15 years ahead of schedule, that goal was reached with 10,005 MW being installed by the beginning of 2010. By having these standards in place, Texas has been able to push harder to exceed the expectations that were set in place. Though renewable portfolio standards have not fared well in all states, like in Massachusetts, Texas is a state that has proven that it could work with proper implementation and infrastructure. The success that was shown with the Texas RPS has given idea to creating a national RPS with hopes of similar results.
25% of renewable energy by 2025 had been a promise made during the 2008 elections by Barack Obama as part of his campaign to enact a federal RPS to help support clean energy and creating American jobs. Though he did win the election, the legislation never passed to create the RPS to officially set the minimum at 25% due to a party change in the senate, who refused bills attempting the regulation of the power market and cap-and-trade programs.
Another problem that seemed to arise when talking about a federal RPS was the infrastructure. In Texas, the large CREZ lines were put into place to take energy from the more remote locations of the power sources and transport it to the locations of higher demand. The construction took about a decade and cost close to $7 billion. To create a system that is similar to the CREZ lines in Texas on a large scale to fit the United States would be a very time consuming and extremely expensive. With a project as large as this could be, the whole country would run into similar problems as what had happened with Massachusetts; setting a minimum but not having the infrastructure in place to achieve it. Trying to create goals that were too ambitious while trying to build the proper infrastructure was the downfall of the RPS in Massachusetts, which could be a very possible complication for the entirety of the U.S. if a national RPS were to be instated. There are good and bad of having an RPS to help push for more renewable energy, and examples proving that it can work and examples of it possibly failing if not executed properly.
Government incentives have also been in the arsenal of policies attempted to help push the growth of renewable energy. The production tax credit was enacted in 1992 as a part of the Energy Policy Act of 1992. It aimed at giving incentives to renewable projects by giving a certain amount of money back to the owners of the projects per kWh produced. This forced the progression of technology and reliability of wind turbines along with solar panels and other forms of renewable energies. Before the PTC, a tax credit was given based on the initial investment of the project, which caused a large flux of new projects being built, but little to no production of energy from most of these projects. The PTC did help boost the amount of renewables, especially wind, but caused a lot of drama for many companies.
The introduction and the extensions to the PTC all proved to be good for renewables, mostly the wind industry, as with each extension many new projects started to rise. But on the other side of the coin, the years directly leading into the expirations of the PTC saw huge drops in the construction of new projects, up to 92% drops of installation in 1999–2000 and 2012–2013 according to the American Wind Energy Association. This is because the project owners did not want to be stuck in the making of a huge project and not be guaranteed the tax credits from the government. As we know, renewable power is not cheap, and without the PTC, it would take up to twice as long, in some cases up to ten years, for a project to start becoming profitable. The PTC was not signed to another extension, so we will see in a few more years what the resulting impacts this has on the renewables industry.
Going into the future, the U.S. will continue to push for renewables as the demand for power increases and the demand for clean energy increases with it. But to be able to move forward, the country will need to prepare for the amount of strain on infrastructure due to larger volumes of electricity flowing through them, whether it be from renewables or non-renewables, and how the location of the renewables and the location of the major cities that need the power will affect the nation’s three major grid systems.
All these things are possible with great amounts of time, money and planning. As renewables continue to gain popularity by the government and the public, it will only continue to grow, with or without federal administration. The only question left is what legislation will come next and how will it affect the industry?