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Published:May 9th, 2007 04:15 EST
Renewable Energy Industry Vows To Meet More of U.S. Energy Needs

Renewable Energy Industry Vows To Meet More of U.S. Energy Needs

By SOP newswire

Washington -- With congressional and administration support, renewable energy industries promise to meet a substantially larger portion of projected U.S. demand for energy than they currently meet.

Wind, solar, biofuels and other renewable energy industries have the potential to provide up to 40 percent of electricity and a similar share of transportation fuel supplies projected for 2025, a new industry-funded report says.

The focus of the report has the backing of the administration, which has been seeking new alternatives to fossil fuels.  In his 2006 State of the Union address, President Bush said that renewable energy sources “can go a long way toward breaking the [U.S.] addiction to oil."

The expansion of the renewable sector on a scale envisioned in The Outlook on Renewable Energy in America, Volume II: Joint Summary Report would produce considerable benefits, such as reduced dependence on oil and natural gas imports, improved environmental conditions and lower carbon emissions, which are believed to contribute to global warming.

Although some experts view the projections, published earlier in May by the American Council on Renewable Energy (ACORE), as realistic, others consider them extremely optimistic.  All agree that there are both technical and regulatory hurdles to overcome before the full potential of renewables can be tapped. Until that time, U.S. utilities will continue to depend to a large degree on fossil fuels.

One expert, George Douglas, spokesman for the National Renewable Energy Laboratory (NREL) in Denver, described the industry’s goals as both realistic and achievable.

But Brandon Owens of the Cambridge Energy Research Associates (CERA) has doubts that so much electricity can be produced so quickly from renewables. He is a director in CERA’s North American Power Group.

Owens told USINFO that 635 gigawatts of new electricity generation capacity from renewable sources projected for 2025 by the report may reflect the magnitude of “potential" resources the industry can mobilize. But it does not mean that so much electricity actually can be transmitted to where and when it is most needed, he said.

Owens explained that there is a significant geographical mismatch between the areas of greatest demand -- mostly on both coasts -- and those where renewable resources are available. For example, the wind energy industry is concentrated in the Great Plains, in the central United States.

The transmission capacity expansion needed to address the mismatch depends on the complicated market structure shaped by many stakeholders.

“So there is no simple policy solution or incentive which when passed will suddenly make all those transmission lines get constructed," Owens said.

A second problem, he said, is storing electricity for use during periods of peak demand.

Douglas said laboratories such as NREL are working on technologies to make such storage possible.

But he and Owens agree that it will take some time before such technologies will be commercially viable.

POLICY CHANGES CAN MAKE IT HAPPEN

ACORE numbers differ significantly from a 2007 forecast by the U.S. Department of Energy’s Energy Information Administration (EIA). According to EIA, the share of power generation from renewable sources is expected to remain roughly constant at about 9 percent of total electricity supply by 2030 if current law and policies remain in place.

"Renewable energy doesn't amount to much unless you change policy," said ACORE President Michael Eckhart in a May 1 telephone briefing.

The ACORE report assumes additional tax credits, consumer incentives and a large jump in funding for energy research and development.

Some legislation and regulatory changes are likely.

President Bush has proposed to replace 20 percent of the gasoline supply projected for 2020 with biofuels. And several key congressional committees are working on various legislative proposals to promote renewable energy, including biofuels.

However, another expert, Robert Bradley, objects to heavy involvement of policymakers in energy markets. Bradley is the president of the Institute for Energy Research in Houston and a scholar at the Cato Institute in Washington.

“At the point of the gun, we can change our energy mix in just about any way we want to," he told USINFO. But overregulation is not the solution, Bradley said.

“In the marketplace, oil, gas and coal continue to out-compete renewables," he added.

Douglas takes issue with this view.

In the United States all forms of energy, including oil, coal and natural gas, are regulated -- sometimes heavily -- and subsidized at some level, he said.  Douglas also believes that renewable technologies have vastly improved over the last several decades, and renewable power is becoming increasingly competitive as oil and natural gas prices rise.

He further argues that Americans are increasingly open to renewable energy options today because of heightened concerns about energy security and climate change.

Jim Pierobon of ACORE said renewable energy is a winner in the marketplace if all these factors are taken into account.

“Let’s truly get all costs and considerations on the table and let renewable energy compete head to head," he told USINFO.

The full text of the ACORE report can be viewed on the organization's Web site.

For more information on U.S. policies, see Climate Change and Clean Energy.

By Andrzej Zwaniecki
USINFO Staff Writer