Roaring forward? The outlook on renewable energy in the USA

Last November, the American Council On Renewable Energy (ACORE), in conjunction with the Energy Efficiency & Renewable Energy Caucuses of the US Senate and US House of Representatives, convened a national policy forum in Washington, DC, entitled: ‘Phase II of Renewable Energy in America: Market Forecasts and Policy Requirements.’ Mike Eckhart reports on the meeting and its outcomes.

Phase I of renewable energy in America was the period from 1975-2000, centred on Federally-funded research, development and demonstration (RD&D) programmes. After 25 years of effort by the nation’s best scientists and engineers, and approximately US$15 billion spent, the US has an array of new technologies in wind power, solar energy, hydropower, ocean energy, geothermal energy, biomass energy and biofuels. They are ready to be deployed.

ACORE has designated ‘Phase II’ to be the period from 2000-2025, when the focus will be on putting these new technologies into use.

Phase II policies began at the state level with the passage of Renewable Portfolio Standards and economic incentives. Now, it is time to instill the philosophies of Phase II into federal policy. There is a need to recognize the many significant public benefits of renewable energy for domestic energy supply, national security, economic security, environmental protection, global warming, investment opportunities, and job creation. There is a pressing need for stability of policy so that companies have a reasoned basis for making long-term investments in factories, and the financial community can have reasonable confidence making investments in new projects.

Attendees at the ACORE Phase II national policy forum in November, 2006 acore

Phase II encompasses all of the policies needed to make renewable energy successful in America, including but not limited to regulations, mandates, incentives, tax policy, and programme funding. Phase II places emphasis on market pull strategies while also calling for substantially increased RD&D funding to support the pipeline of new technologies to meet market needs.

The key question to address is how much will renewable energy contribute to US energy supply, by when, and what policy framework will be needed to achieve that outcome? This article is presented in three sections, corresponding to the sessions in the conference: government and institutional outlook, industry outlook, and upside potential.

Government and institutional outlook

The outlooks of government agencies and institutions in the renewable energy arena are critical when identifying the future of renewables.

Energy Information Administration
The Energy Information Administration (EIA) presented the base case, assuming ‘all current standards, laws, and regulations remain as currently enacted.’ Under this scenario, total US primary energy consumption is expected to increase from 100 quadrillion Btu (quads) in 2005 to 131 quads in 2030. However, the share of renewable electricity generation is expected to remain at 9%, while coal increases its share from 50% in 2005 to 57% in 2030. Ethanol use is expected to increase from 4 billion US gallons in 2005 to 14.6 billion gallons in 2030, about 8% of total gasoline consumption by volume.

The Menodota Hills wind farm, part of the US’ burgeoning wind industry gamesa éolica

National Renewable Energy Laboratory
The National Renewable Energy Laboratory (NREL) reported that it and other Department of Energy national labs are working together with industry and university partners to ensure that technologies are ready to dramatically expand the contribution of renewable energy to the nation’s energy supply. NREL and DOE have set specific cost reduction goals for wind power, solar energy, and biofuels over the next 20 years.

Electric Power Research Institute
The Electric Power Research Institute (EPRI) is focusing on the challenge of future carbon constraints. Renewable generation, excluding large hydropower, currently contributes about 2% to the nation’s electricity supply. With current energy policies, and considering the adoption of renewable portfolio standards in 23 states, EPRI estimates new renewable energy’s contribution to be 3%-4% of the total electric energy that will be needed in 2020. However, EPRI’s recent modelling results, assuming high-natural gas and high-CO2 costs, show significant growth in renewable energy. These resources, primarily hydro, wind and biomass, could contribute 13% of electricity by 2020 and as much as 33% by 2050. This represents a 10 fold increase in non-hydro renewable generating capacity from 36 GW in 2010 to 360 GW by 2050.

Western Governors’ Association
The Western Governors’ Association (WGA) formed the Clean and Diversified Energy Initiative to look into these areas, involving more than 250 experts in seven task forces, assessing what is feasible by 2020. WGA concluded that ‘48,000 MW of energy efficiency is achievable through broad adoption of best practices.’ WGA concluded that renewable energy can contribute ‘upwards of 68,000 MW, depending on transmission availability.’

University of California at Berkeley
The Energy Research Group (ERG) at the University of California at Berkeley has developed the analytics behind a range of new proposals for programmes like the WGA’s and California’s initiatives, concluding that, to make real progress, the USA will need to:

  • make energy and the environment the core area of education in the US
  • establish a set of energy challenges worthy of federal action
  • make the nation the driver for clean vehicle deployment
  • expand international collaboration that benefits developing nations
  • recognize the value of energy investment in the economy including job creation
  • begin a serious discussion of market based mechanisms to make the price of carbon emissions reflect its social cost.
Industry outlook

The trade associations for wind power, solar energy, hydro and ocean power, geothermal energy, biomass power, biodiesel fuel, and ethanol fuel provided the outlooks, technology by technology, for renewable energy in the USA.

American Wind Energy Association
Wind power markets are increasing in capacity around the world. The American Wind Energy Association (AWEA) concludes that ‘to supply 20% of the nation’s electricity by 2030, we would need to increase wind capacity from 10.5 GW in operation today to 350 GW.’ AWEA’s preliminary assessment indicates this is feasible and affordable. However, significant new transmission will be needed to access this wind resource. There would be widespread benefits, with 42 states having substantial installed capacity, and the creation of 3 million jobs.

Some of the more positive estimates suggest that solar could provide up to 110 GW of new electricity by 2016 altpower

Solar Energy Industries Association
The Solar Electric Industries Association (SEIA) estimates that, under robust growth scenarios, ‘solar can provide 110 GW of new annual power needs by 2016.’ This includes solar PV, concentrating solar power for utilities, and solar water heating. This would be enough electricity to power 28 million homes, create 260,000 jobs, and save consumers over $100 billion in energy costs.

National Hydropower Association and Ocean Energy Council
This original source of renewable energy on the grid contributes approximately 75,000 MW of capacity today, representing 9% of the nation’s electrical capacity. More can be added. According to the National Hydropower Association (NHA), over 23,000 MW of identified potential can be developed immediately. Ocean energy – tidal, current and thermal conversion – could hold the potential to supply a large share of US electricity requirements, according to NHA and the Ocean Energy Council.

Geothermal Energy Association
The Geothermal Energy Association reports that there are 62 new geothermal energy projects in development today. Hydrothermal and new discoveries at identified sites could produce approximately 15,000 MW by 2025. By adding deep resources, co-production, direct uses and heat pumps, GEA estimates that geothermal energy could supply 38,400-98,400 MW by 2025.

Biomass Co-ordinating Council and US Combined Heat & Power Association
The outlook of the Biomass Co-ordinating Council (BCC) and the US Combined Heat and Power Association (USCHPA) is one promising ‘an increase of ten times the current installed base of 10 GW of biomass power, resulting in 100 GW of new biomass-fired distributed generation by 2025.’ To achieve these results, USCHPA seeks a 10-year eligibility period for the Production Tax Credit (PTC), a 20% national renewable portfolio standard, and application of these policies to combined heat and power and recycled energy to recognize that improved efficiency is a complementary element to resolving climate change issues.

A motorist fills up with E85 ethanol blend. By 2030, the EIA estimated that ethanol is expected to make up around 30% of gasoline by volume nrel / american lung association of minnesota

National Biodiesel Board
The National Biodiesel Board (NBB) reports that US production is on track to increase from 25 million US gallons in 2004 to 150 million gallons in 2006. The number of plants has increased from 22 in 2004 to 85 today, with another 65 under construction. NBB estimates that low-level biodiesel blends could displace 5% of petroleum diesel in the near to mid-term future, with much more upside potential.

Renewable Fuels Association for Ethanol
The Renewable Fuels Association (RFA) reports that there are 109 ethanol refineries in 19 states, plus 53 new projects in development that, together, will have a capacity of 9.4 billion gallons per year, more than 100% growth in three years. RFA states that, with continued growth in grain-based ethanol expected to reach 14 to 15 billion gallons by 2025, and anticipated commercialization of cellulose ethanol over time, the President’s objective of 30% of US motor fuel being derived from renewables by 2030 (60 billion gallons) is clearly achievable.

Upside Potential

While the industry associations and government research agencies try to provide forecasts, the outlooks of research institutes, non-profit groups, and policy campaigns will challenge the United States to do better – outlining what needs to be done.

Worldwatch Institute
The recent report by Worldwatch Institute and the Center for American Progress, entitled American Energy, presented a broad-based policy argument for renewable energy. It said: ‘Energy transitions take time, and no single technology will solve our energy problems, but renewable energy technologies combined with substantial improvements in energy efficiency have the potential to gradually transform the US energy system in ways that will benefit all Americans.’ It cited a range of benefits. Dependence on Persian Gulf oil would decline. Trade deficits would fall. The air would be cleaner. Emissions of global warming gases would decline. Hundreds of thousands of new jobs would be created. Rural communities would be revitalized.

Apollo Alliance
Founded three years ago, the Apollo Alliance has challenged the US to achieve energy independence in our generation. Apollo Alliance has a four-part plan for state leadership: to achieve independence from imported oil, invest in renewable energy, encourage energy-efficient buildings, and make investments in transit and smart growth. At the federal level, the Alliance is proposing a Clean Energy Investment Authority. Taken together, the Apollo Alliance plan would create more than three million jobs, generate $1 trillion in economic activity, reduce oil imports, reduce carbon emissions, and position the US as a world leader in renewable energy technology.

Union of Concerned Scientists
A recent UCS analysis, entitled Renewing America’s Economy, found that a National Renewable Electricity Standard (RES) of 20% by 2020 will create jobs and save consumer money. The USA would increase its total homegrown renewable power by more than 10 times – from 17,000 MW in 2003 to 180,000 MW by 2020 – powered primarily by the US’ wind, bioenergy and geothermal resources. The 20% national standard would create over 355,000 jobs in the US by 2020, while lower energy prices and saving consumers up to $49 billion on their energy bills. It would also boost rural economies, conserve natural gas resources, provide environmental benefits, and create a cleaner, safer energy future.

Energy Future Coalition’s 25 x ’25 Campaign
The Energy Future Coalition’s 25 x ’25 campaign is a bold new vision for the United States’s energy future – a goal that the US’ farms, ranchers and forests could provide 25% of the country’s total energy needs from renewable resources by the year 2025, while continuing to produce abundant and affordable food, feed, and fibre. More than 300 endorsing organizations are working together on a plan for reaching the 25 x ’25 goal. The campaign concludes: ‘If we can harness our collective creativity, spirit and resources, this broad, politically diverse and influential coalition will chart a new course and create, for the first time in a generation, the basis for a comprehensive and sustainable national energy strategy.’


An increasingly clear picture – from a spectrum of outlooks – emerges from the base case forecasts of government and institutional sources, estimates by the trade associations for their respective technologies, and the policy-driven campaigns. It is a spectrum in which differences in outlook appear to be tied, more than any other factor, to assumptions about public policy.

It is apparent now, that without a decisive set of policies that favour renewable energy, its share in the United States’ energy mix will remain constant. The official forecasts tell us so. This will not generate the potential benefits of renewable energy to the United States’ domestic energy supply, national security, environmental health, economic development, or job creation, or mitigation of global climate change. The status quo is not an acceptable outcome.

Based on the assessments in this report, it is critically clear, that if the United States has the courage to commit to change, to make real change in policies that drive market economies and decision making, it will be possible to achieve as much as 25% of national energy supply from renewable energy sources by 2025, and much more by mid-century. In the electric sector, the assessments total 500-700 MW of new renewable energy capacity that can feasibly be added in the next 20-25 years. In the fuels sector, the assessments show that the production of biofuels is rapidly increasing, suggesting a positive future.

The key factors for policy that were stated repeatedly at the Phase II conference, and summarized in the papers, include:

  • The urgent need for a national strategy that reflects the regional diversity of renewable energy resources, economics and opportunities, and that helps and rewards state and local governments for bold action in these areas;
  • The need for real mechanisms that affect market dynamics and the decisions of companies, financiers, and individual people
  • The need to develop a national transmission system, in the same way as there is a national highway system, to access all domestic renewable energy sources
  • The need for long-term and stable policy commitments that in turn allow industry, the financial sector, and individual Americans to make long-term investments in factories, biorefineries, renewable power plants, and more efficient homes
  • The need for an accelerated national R&D programme, with investments strategically balanced between research to improve current systems and manufacturing processes and long-term research to develop the next generation of technologies that will be needed to enable renewable energy to dramatically increase its contribution to our energy supply
  • The need to act with resolve and decisiveness in favor of renewable energy as a solution, ending decades of public policy that supported all forms of energy equally and simultaneously. It is no longer simply a matter of producing more of everything.

Mike Eckhart is President of the American Council on Renewable Energy

This article is based on the Outlook Report from the ‘Phase II of Renewable Energy in America: Market Forecasts and Policy Requirements’ conference, which features detailed outlooks from leading government agencies, research institutions, associations, policy campaigns and non-profit organizations. To obtain the full report with complete summaries, please visit


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