U.S. Demand for Renewable Energy Exceeding Supply

State-level Renewable Portfolio Standards (RPS) and voluntary green power markets are generating unprecedented demand for renewable energy in the U.S., which could create significant near-term shortages of renewable energy, according to a new report from the National Renewable Energy Laboratory (NREL).

The NREL report compares the pace of renewable energy development with the demand from procurement obligations of the 26 RPS programs as well as the voluntary green power markets in the U.S. through 2010.

The authors find that under a “base-case” scenario, generators will fall short by 28 million megawatt-hours (Mwh) of renewable electricity by 2010. Under a “high-case” scenario, generators will fall short by about 8 million Mwh of renewable electricity by that date. According to the report, market demands are already beginning to outpace installed capacity.

Higher demand for renewable electricity is a good thing. But if demand continues to exceed supply, prices will slgnificantly go up, possibly hurting voluntary markets. The authors of the report recommend that in order to counteract this looming problem, increased federal support for renewable energy—such as tax incentives and loan guarantees—is necessary to ensure stable production over the medium- to long-term. The authors project that the issue should subside past 2010 with the proper government support.

To read the full 15-page report, follow the link provided below.


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