U.S. Energy Policy Gives Strong Recognition to Renewables

The United States will use improved technology to ensure that it leads the world in the development of clean, natural, renewable and alternative energy supplies.

WASHINGTON, DC, US, 2001-05-18 <SolarAccess.com> “While the current contribution of renewable and alternative energy resources to America’s total electricity supply is relatively small – only 9 percent – the renewable and alternative energy sectors are among the fastest growing in the United States,” says the proposed national energy policy unveiled by U.S. Vice President Dick Cheney. Non-hydro facilities generate 2 percent of electricity, but those sites grew by 30 percent in the past decade, and “continued growth of renewable energy will continue to be important in delivering larger supplies of clean, domestic power for America’s growing economy.” Solar, wind, geothermal and biomass diversify energy supplies, and do so with few adverse environmental impacts, notes the report. The U.S. has “significant potential” for development of non-depletable renewables, which are “domestically abundant” and “can provide a reliable source of energy at a stable price” while also generating income for farmers and land-owners. The sixth chapter of the policy, ‘Increasing America’s Use of Renewable & Alternative Energy,’ contains a number of recommendations: – a review of federal funding for research in renewables should be undertaken, which would result in “appropriate funding” for programs that are performance-based and rely on public-private partnerships; – legislation should be passed to provide a new 15 percent tax credit for residential solar energy property, up to a maximum credit of $2,000; – the recent budget should be increased by $39.2 million for additional research into renewables; – legislation should divert $1.2 billion in lease revenue from oil drilling rigs in the Arctic ANWR site toward research into wind, solar, geothermal and biomass; – government agencies should re-evaluate access limitations to federal lands in order to increase production from renewables; – legislation should be passed to extend and expand tax credits for electricity generated from wind and biomass (the recent federal budget would extend the 1.7c/kWh production tax credit for wind and biomass, and expand the eligibility of biomass to include power generated from biomass co-fired with coal); – delays should be reduced for geothermal leases as part of the permitting review process; – a new renewable energy partnership program should be developed to help companies buy renewable energy and receive recognition for the environmental benefits of that purchase, and to promote consumer choice programs about the environmental benefits of purchasing renewable energy; – the current exemption from excise tax for ethanol should be continued; – the government should develop hydrogen and fusion energy, including an education campaign on the benefits of those sources; – legislation should be passed to provide a tax credit for new landfill methane projects; – integration of current programs on hydrogen, fuel cells and distributed energy; – legislation should be passed to re-authorize the Hydrogen Energy Act; – legislation should be passed to provide an income tax credit for the purchase of new hybrid or fuel-cell vehicles between 2002 and 2007; – encouragement should be given to the development of combined heat and power (cogeneration) units. “Wind energy accounts for 6 percent of renewable electricity generation and 0.1 percent of total electricity supply,” says the policy. “However, advances by research labs, universities, utilities, and wind energy developers have helped cut wind energy’s costs by more than 80 percent during the last 20 years. The industry is poised for growth.” In some regions, wind can generate electricity at prices comparable to other technologies, and the U.S. has many areas with abundant wind potential. While solar energy technologies have undergone technological and cost improvements and are well established in high-value markets, “continued research is needed to reduce costs and improve performance.” “Distributed energy systems have the distinct advantage of being brought on line faster than new central power plants,” explains the National Energy Policy Development Group. “Photovoltaic solar distributed energy is a particularly valuable energy generation source during times of peak use of power.” “A number of impediments and competing policy objectives discourage the wider application of integrated electricity supply and demand solutions, many of which reflect the relative newness and lack of familiarity with these technologies,” it says. A lack of standards on interconnection to the grid impedes development and current air quality regulations do not take into account the additional energy savings from many distributed energy technologies. “As we look to the long-term future of alternative energy technologies, there is significant promise in these technologies to meet an ever-growing portion of our nation’s energy needs,” it adds. “Between 1990 and 1999, renewable energy generation grew by 29 percent, and renewable energy is projected to continue to grow.” “The success of renewables is, in part, the result of over 20 years of research, development, and demonstration conducted by the public and private sectors,” concludes the chapter. “This work has dramatically improved these technologies and has reduced their costs by as much as 90 percent.” “Perhaps the greatest barrier to growth of renewable energy is cost,” and the cost of generation from renewables “frequently exceeds the costs of conventional electricity generation.” The costs of renewables have declined “substantially” in recent years, and the report notes that the cost of wind energy has declined 80 percent and is increasingly competitive with other sources. “Wind, biomass, and geothermal are all increasingly competitive with conventional electricity generation.” The national energy policy was developed by Cheney and the National Energy Policy Development Group, which was created by President George Bush to address the growing concern over energy in light of the situation in California. “America in the year 2001 faces the most serious energy shortage since the oil embargoes of the 1970s,” it warns. “A fundamental imbalance between supply and demand defines our nation’s energy crisis” and this imbalance, if it continues, will inevitably undermine the U.S. economy, standard of living and national security. Over the next 20 years, oil consumption in the U.S. will grow by six million barrels a day, while oil production could decline by 1.5 million barrels per day. Natural gas consumption will grow by 50 percent over that period, while production will grow by only 14 percent. To meet projected demand for electricity, the U.S. must build 1,300 to 1,900 new plants, much of which will be fired by natural gas but nuclear “can play an expanding part in our energy future.” “The President’s goal of reliable, affordable and environmentally sound energy supplies will not be reached overnight,” concludes the report. “It will call forth innovations in science, research, and engineering. It will require time and the best efforts of leaders in both political parties. It will require also that we deal with the facts as they are, meeting serious problems in a serious way. The complacency of the past decade must now give way to swift but well-considered action.”

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