TABLE OF CONTENTS

  Acronyms p  2

Table and  Figures p  3

  Introduction p  4

Chapter I  p  5

  I I Biomass p  5

  I II Geothermal p  6

  I III Solar Photovoltaic p  6

  I IV Wind p  7

Chapter II  p  10

  II I Energy and National Security p  10

  II II Federal Regulatory Mandates p  11

  II III Federal Incentives p  12

  II IV Research and Development p  14

  II V Federal Programs p  14

Chapter III..............................................................................................................................p.  17  17

  III I Promoting Renewables the State s Perspective p  17

  III II State Incentives Programs Policies and Regulations p  18

  III III Promoting Renewables an Assesment p  32

  Conclusion p  36

  References p  38

  Web Sites of Interest p  39

  1  

ACRONYMS

CoSEIA Colorado Solar Energy Industry Association

DOE U.S. Department of Energy

DSIRE Database of State Incentives for Renewable Energy

EERE Energy Efficiency and Renewable Energy Network

EIA Energy Information Administration

EPA Environmental Protection Agency

EPACT Energy Policy Act of 1992

FERC Federal Energy Regulatory Commission

FSEC Florida Solar Energy Center

GLREA Great Lakes Renewable Energy Association

IEA International Energy Agency

IOU investor-owned utility

IREC Interstate Renewable Energy Council

ISP Institute for Sustainable Power

kW kilowatt

kWh kilowatt-hour

MW megawatt

MACRS Modified Acceleration Cost Recovery System

MSW Multiple Solid Waste

MREA Midwest Renewable Energy Association

MSRI Million Solar Roofs Initiative

NABCEP North American Board of Certified Energy Practitioners

NEA National Energy Act of 1978

NREL National Renewable Energy Laboratory

NYSEIA New York Solar Energy Industry Association

NYSERDA New York State Energy Research and Development Authority

OPEC Organization of the Petroleum Exporting Countries

PBF Public Benefit Fund

PURPA Public Utility Regulatory Policy Act

PV photovoltaic

QF qualifying facilities

RPS Renewable Portfolio Standard

REPI Renewable Energy Production Incentive

REPTC Renewable Electricity Production Tax Credit

R&D Research and Development

SBC Social Benefit Charge

SECO State Energy Conservation Office, Texas

UCS Union of Concerned Scientists

2

TABLES & FIGURES

Table 1  Net Generation of Electricity 2000 p  9

Table 2  Overview of Federal Financial Incentives 2003 p  13

Table 3  Overview State Incentives Programs Policies Rules and Regulations  

2003........................................................................................................................p.  18  18

Table 4  Overview Financial Incentives for Renewable Energy by State 2003 p  20

Table 5  Overview Outreach Voluntary Programs 2003 p  21

Table 6  Overview Rules Regulations Policies by State 2003 p  26

Table 7  Overview of Mandatory and Voluntary Public Benefits Funding  

  by State 2003 p  28

Table 8  Overview Renewable Portfolio Standards by State 2003 p  29

Table 9  Total Installed Capacity by Technology Total Installed Capacity  

  Number of Operating Facilities and Fuel Mix Share of Renewables  

  by State 2003 p  34

  Figure 1 United States Biomass Resources p  5

  Figure 2 United States Geothermal Resources p  6

  Figure 3 United States Solar Resources p  7

  Figure 4 United States Wind Resources p  8

  Figure 5 Electricity Generation by Fuel 1970-2025 (billion kWh) p  10

  Figure 6 Energy Consumption by Fuel 1970-2025 (quadrillion Btu) p  11

  Figure 7 R D Funding for Selected Renewable Energy Technologies p  14

  Figure 8 Utility Green Pricing Activities 2003 p  23

  Figure 9 Overview Net Metering Policies and Limit on System Size  

  by State 2003 p  27

  Figure 10 Public Benefits Funding by State 2003 p  29

  Figure 11 Renewable Portfolio Standards by State 2003 p  31

  3  

INTRODUCTION

"America must have an energy policy that plans for the future, but meets the needs of today. I believe we can develop our natural resources and protect our environment." President George W. Bush

When in 2000 the negotiations over the Kyoto Protocol were proceeding, the Clinton administration showed severe reluctance to commit to another multilateral environmental regime. George W. Bush eventually pulled completely out of the Protocol - much to the disappointment and frustration of many countries which had supported the process despite their own hesitations. As a result, more attention has been paid to U.S. environmental policies that were announced in the aftermath of the U.S. withdrawal. The Bush administration announced the need for further research on climate change and aslo supported, in general, the promotion of renewable energy, particularly of hydrogen technology.

As a contribution to the International Renewable Energy Conference to be hosted by Germany in Bonn from June 2 to 6, 2004, this paper seeks to examine domestic policies implemented in the United States to promote renewable energy. With respect to the constitutional division of power and differences in political strategies and programs, the paper makes a distinction between federal and state policies regarding renewable energy.

The following discussion will show that, despite a reluctance on the federal level, much progress in promoting renewables on the state level has been made and is likely to continue. While the development on the state level is very promising, a comprehensive federal approach, crucial for a sustainable change in energy supply, is still missing.

Chapter One briefly outlines what definition of ‚renewable energy' is relevant for the paper, and which renewable energy sources are included in the discussion.

After a short description of pertinent alternative energy sources, a discussion of federal attempts to further the development of renewables will follow in Chapter Two.

The paper identifies federal mandates, incentives, research and development and federal programs as the four major fields of federal activity and discusses them accordingly.

Chapter Three gives a comprehensive overview of the state activities regarding alternative energy sources. The paper makes a distinction between financial incentives; rules, regulations and policies; and outreach and voluntary programs to describe activities on the state level.

For further information, the reader will find a comrehensive web site listing of all institutions and programs which are mentioned in this paper. In addition, web sites of the energy offices of the most progressive states, links to representatives of renewable energy industries and major environmental lobbies are provided at the end of the paper.

4

CHAPTER I

-RENEWABLES-

“U.S. geothermal resources alone are estimated at

70,000,000 quads, equivalent to a 750,000-year supply of energy for the entire nation at current rates of consumption.” (Energy Efficiency and Renewable Energy Network, 2003)

Beforehand I start discussing the promotion of renewables on the federal and state level; I will give a short introduction to my understanding of renewables. The following paper defines renewables as a regenerative or virtually inexhaustible energy resource. The definition embraces the alternative energy resources biomass, geothermal, solar and wind and deliberately dismisses hydro power. A distinction must be made between using alternative energy resources for electricity generation or tapping for instance sunpower and geothermal sites to heat water or residential and commercial buildings. The first case directly contributes to the fuel share, in the second case the actual former electricity demand is lowered, due to the replacement with geothermal and solar thermal devices.

Thus renewable technologies serve in a twofold way. They induct clean generated electricity to the grid and lower the demand for conventional produced energy.

I.I. Biomass

Biomass is plant matter such as trees, grasses, agricultural crops (if fast growing, called energy crops) and other living plant material. Biomass includes animal waste and non hazardous debris diverted from landfills. It can be used in its solid form for heating applications and electricity generation through direct-fired and co-fired facilities, or can be converted into liquid or gaseous fuels using biomass gasifiers. Biomass fuels are converted to heat and electricity, using technologies similar to those used when converting fossil fuels, like coal, to heat and electricity and they show a better environmental performance than established fuels. Biogas can be cleaned and filtered to remove impurities before its burning. This paper only refers to biomass

Figure 1 United States Biomass Resources Source: www.eere.energy.gov

5

Biopower could establish a new income source for farmers facing economic hardship and could create new markets for the forestry industry. Approximately 80% of biomass power is produced in the Northeast, Southeast and West Coast regions, due to the close vicinity of biomass resources and lower transportation cost. Yet, unfortunately the full potential of biomass is not tapped, although to date, without further investment, the whole New England region’s (seven states) residential energy demand could be supplied using biopower.

I.II. Geothermal

Geothermal energy is subterrestrial natural heat brought to the surface as steam or hot water. Geothermal energy can be used directly for heating devices or be converted to electricity. One has to distinguish between two types of geothermal resources. Hydrothermal fluid resources are reservoirs of hot water or steam, which can be tapped for electricity generation by drilling wells.

Figure 2 United States Geothermal Resources Source: www.eere.energy.gov

installed altogether a

2,800 MW capacity of geothermal power to produce electricity. Although geothermal usage for generating electricity is still limited to the western United States, direct heat and heat pump devices totaling a capacity of some 19,300 MW i.e. for agricultural greenhouse operations and heating systems are applicable across the nation. The largest markets are in the Midwestern states of Indiana, Kentucky, Michigan, Missouri, Minnesota and Ohio. Recalling the chapter’s introductive quote, progress has been made, but the produced kWh outcome remains a drop in the ocean.

I.III. Solar & Photovoltaic

Common sense acknowledges the earth’s dependence on light and thermal radiation, sent out from the sun, to allow the existence of our environment, as we know it. Sunlight is an inexhaustible resource and considering available technology a clean way to generate electricity.

PV modules covering 0.3% of the land in the United States, one fourth of the land occupied by

roadways, could supply all the U.S. electricity consumed. Currently, two major approaches can be found in the United States to tap sunpower.

6

Figure 3 United States Solar Resources Source: www.eere,energy.gov

Solar Thermal devices do not produce electricity. The power of the sun is used to heat water and air in commercial and residential buildings. Solar thermal technology is more efficient than PV. Although usage is optimal in the Southwest regions, systems operating in the majority of the states are still cost effective.

Unfortunately, electricity generation in solar power plants accounted for only some 380 MW in 2001 and plays a minor role in electricity generation.

I.IV. Wind

In thinking about renewables, wind turbines are the technology, which first comes to mind. Wind turbines convert kinetic energy in the wind into mechanical energy and then into electricity.

In the United States, wind generated energy technology is the fastest-growing sector of alternative energy generation. The total installed capacity equals to date 8000 MW. Wind technologies can be best applied in the Great Plaines, reaching from Montana east to Minnesota and south to Texas. The greatest number of turbines erected can now be found in California, and Iowa, Minnesota, Texas, Wisconsin and Wyoming show a significant increase in wind energy used. The potential of wind generation is as striking as geothermal, solar and biomass technologies. This potential has, however, been barely touched, although the lowering of production costs has made wind energy the most cost-competitive of renewable energy technologies.

The short overview proves the underlying potential of renewable energy resources. The United States’ physical diversity enables the employment of the whole alternative technology range. Renewables can contribute directly to electricity generation or installed locally, can be a fine solution replacing conventional energy. In addition, locally generated energy reduces the dependence of rural areas and customers on centralized utilities and it makes cost intensive power line extension obsolete as well.

7

Figure 4 United States Wind Resources Source: www.eere,energy.gov

Despite the capacity now achieved of renewable energy generation; the major potential is left unexploited. Germany, the size of Oregon, for instance surpassed the United States’ capacity of wind generated electricity in 2002. Renewables are still at the periphery of the fuel share of the United States.

Table 1 below lists the produced kilowatt-hours from various renewable fuels and nonrenewables, including hydro power. Biomass is the most used renewable source, accounting for over 1% of total net electricity generation, followed by geothermal, wind and solar resources. The figures leave no doubt that the share in electricity generation of all renewables,

2.21 % in total, compared to an overwhelming 97.97 % of nonrenewables and hydropower,

makes renewables to the neglected stepchild of electricity generation.

8