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Study: National Renewables Mandate Could Help Make U.S. Competitive with China

25% Federal RES by 2025 Could Generate 274,000 Domestic Jobs

By Stacy Feldman

Feb 5, 2010

A federal mandate for renewable electricity could ensure U.S. competitiveness with China on clean fuels and create thousands of home-grown jobs by wooing manufacturers that have been turned off by America's unsteady support for the industry, according to a new study commissioned by an alliance of 19 energy firms and trade groups.

"China is absolutely killing us," said Don Furman, a senior vice president for wind energy company Iberdrola Renewables, a member of the .

"America owned this industry 20 years ago," he told reporters. "And we have given it away because we haven't had a coherent national policy supporting renewables."

A renewable electricity standard (RES) would force utilities to get more renewable power on the grid.

Applied nationwide, the law would "guarantee" a long-term market for renewable energy, according to the , prepared by Chicago consulting firm Navigant. That's in contrast to the years of short-term tax credits that have characterized Washington's clean power commitment to date.

"While tax credits continue to play a critically important role in preserving the viability of existing facilities, an RES is needed in order to support both near- and long-term investments," the alliance .

According to the group, companies are more likely to build factories for solar panels or wind parts where the market for the product is and will exist long term.

"The jobs are not going to come here unless manufacturers see long-term certainty," said Furman.

The study found that a strong RES of 25 percent by 2025 would create 274,000 jobs over doing nothing, with every state seeing job creation. Of those jobs, 50,000 would be solar related and 116,000 would be in the wind industry.

"This total is significantly higher than the expected jobs supported in the current House and Senate provisions under consideration in Congress," the alliance said.

Under the Waxman-Markey cap-and-trade bill that narrowly passed the U.S. House in June, utilities would be required to meet a goal of 20 percent renewable energy by 2020. Energy efficiency improvements could count for up to 8 percent of that target, a loophole that dents the measure's green jobs potential, the study said. Currently, the bill remains a long shot for passage in the Senate.

Other reports have shown as much. According to by the Union of Concerned Scientists released last year, a 25 percent by 2025 RES would create 297,000 new jobs. Under its analysis, the policy would also lead to $263.4 billion in new capital investment and save consumers $64.3 billion in lower electricity and natural gas bills.

Navigant said that without a such a nationwide RES, some states would actually lose clean electricity-supported jobs to overseas competitors; California, for instance, would shed over 20,000 jobs.

Currently, about 30 have renewable portfolio standards in place.

So far, "states have actually created the demand" for clean power, said Furman. But the work suggests that this current patchwork of policies is not enough to drive the kind of growth that has been seen in China.

 

China Rising

For the last two years, China has been the world's number one producer of solar cells, and in 2009, it became the largest manufacturer of wind turbines. The nation also doubled the amount of power generated from wind last year, according to the Global Wind Energy Council.

"China is scaling faster than anybody else is today," said Charles Gay, president of Applied Solar at Applied Materials.

Why RES?

Is this kind of central-planning regulatory paradigm our best response to China's challenge? For an alternative perspective, see the recent SolveClimate article "".

Can't feed-in tariffs and

Can't feed-in tariffs and renewable electricity standards work in tandem? I don't see any reason a state couldn't have both.

Why both?

Sure, a state could do both, but why would they? What would the RES accomplish? As California is finding, simply dictating a 20% or 30% RES does not guarantee that it will happen. Markets do not respond well to executive decrees. At least not here. Maybe in China.

Besides, if the RES can be achieved, why stop there? What point is there in setting a predetermined limit on emission reductions?

renewable electricity standard

I believe this is a good start to helping to "kick start" the renewables market.

However, I would suggest that it not be written around electricity generation alone as other applications of renewable methane should also be qualified. Too often the authors of this legislation think only in terms of electricity rather than the total renewables spectrum. As an example, methane produced from biomass sources can be used for a variety of energy replacements such as natural gas, compressed natural gas for mobile applications, etc..

I think it should be written to include BTU's rather than just KW's.

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