U.S. Renewable Energy Leaders: Don’t Count on Carbon Price Alone

Proclaiming “give us a chance, we’ll deliver” and “2009 will be a new beginning,” leaders of several renewable energy groups this week asserted electricity from wind, solar, geothermal, biomass and hydro can help the U.S. make substantial progress toward mitigating the buildup of carbon dioxide in the earth’s atmosphere.

But some, such as Karl Gawell, Executive Director of the Geothermal Energy Association, acknowledged that, “raising the cost of carbon won’t do the job alone…we’re going to need to be using everything we can.”

The briefing, hosted on Capitol Hill by the non-profit Energy and Environmental Institute, was the most recent political rally of sorts by renewable energy interests in the face of tidal waves of advertising from fossil-fuel-fired trade groups and coalitions defending their industries’ tax incentives in the name of low-cost electricity and oil and gas company stock ownership.

The impact that this latest effort will have on the bid to extend the investment and production tax credits remains to be seen. If there was a reason to be more hopeful, it was not evident throughout the 100-plus attendees packing the briefing room in the Russell Senate Office Building. If anything, some industry backers seem to be resigning themselves to a one-year extension of the tax credits, leaving the chance to rebuild them with the next President and the 111th Congress.

Randy Swisher, Executive Director of the American Wind Energy Association, who opened the briefing with the “give-us-a-chance” mantra asserted that one-fifth of America’s electricity can come from wind by 2030, “if we execute a savvy strategy.” He said achieving 20% would essentially end the ever-increasing CO2 emissions from electric generation in the U.S. (See accompanying chart.)

Swisher said wind will continue to shoulder the largest role in mitigating CO2 emissions after a 45% increase in new generating capacity added throughout the U.S. last year compared to 2006. (Updated data is due out later this month on wind’s 2007 growth in the U.S.). It was the third year in a row that wind energy ranked second only to natural gas in new capacity additions among all sources.

Each of the leaders called for “set-asides,” tax-credit equity,” “offsets,” and/or proceeds from any auctions of carbon emission credits as integral, if not critical, to make renewables a major part of any climate change strategy. Feed-in tariffs entered the discussion briefly as efforts by U.S. Rep. Jay Inslee, D-WA, appear to be gaining traction as a vehicle for enabling a cleaner energy future with his proposal for “performance-based incentives” draft legislation.

Ana Cohen, Deputy Staff Director of the House Select Committee on Energy Independence & Global Warming, on which Inslee serves, credited feed-in tariffs in Germany and other countries for positioning companies throughout the European Union to amass significant competitive advantages in U.S. market over the American companies.

“If we don’t take real strong action, projects will be managed by European companies,” Cohen said. She asserted that few policies will work as well as putting a price on a ton of carbon emitted by electric generators and other industrial sources. But she echoed Karl Gawell in asserting a carbon cap or tax won’t be enough. To overcome various market barriers, other measures are needed, including mandates to connect renewables to the grid and stronger state and local building codes.

Chris Miller, Senior Energy Advisory to Senate Majority Leader Harry Reid, D-NV, said the roughly $300 billion in estimated revenue from auctioning carbon emission credits under a “cap and trade” regime would go a long way if much of that money can be funneled to renewables. Once a cap is in place, “we may not need government mandates,” he said.

John Coequyt, Senior Washington Representative in the Global Warming and Energy Program at the Sierra Club, said, “We have to set national goals for these technologies. I don’t want you to think that this is going to be easy. But no one should think that renewables are going to be only a small percentage of the future if we decide that is the future we want.”

One renewable energy advocate who aired his skepticism of the current approach challenged them to “think better.” Andrew Paterson, Director of North American Economics & Finance at Econergy International Corp., said this approach by the renewable industry leaders is “the same thing year after year. We’re tired of the treadmill.”

To which AWEA’s Swisher responded, perhaps with a classic Rolling Stones hit in mind, “You can’t always get what you want…We’re doing what we can in the current political environment.”

Jim Pierobon is a communications consultant based in the Washington, DC area focusing on energy and climate issues.

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