United States

United States

United States: Policy Priority - But Future of RES remains Unclear

US: The wind industry has kicked into high gear in its lobbying for clear federal policy supporting renewable energy. In early March, 120 company executives descended on Washington to argue their case for a federal renewable electricity standard (RES) that would require 25% of the US's electricity to come from renewables by 2025.

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How close Congress will get to that target, or whether it will get there at all this year, is an open question. The House of Representatives has already passed comprehensive climate and energy legislation that sets a cap on carbon and establishes a 20% RES by 2020, but the debate stalled in the Senate amid concerns over a projected multi-billion-dollar deficit, bitter divisions over healthcare reform and the failure to reach an internationally binding agreement at climate change talks in Copenhagen, Denmark in December.

"Carbon legislation seems dead this year," said Keith Martin, a partner at law firm Chadbourne & Parke.

Finding alternatives

A trio of senators, including one from the centre-right Republican Party, one from the centre-left Democratic Party and an Independent, have been trying to salvage the situation by working on a compromise climate and energy bill to bring to legislators this spring. Another hope on the Senate side is that the Energy and Natural Resources Committee has already cleared a stand-alone energy bill that does not limit greenhouse gases but does include a RES of 15% by 2020. "We know we have to do something with energy," Senate majority leader Harry Reid, a Democrat from Nevada, told reporters in Washington. "The issue before us is how do we do it."

However it moves forward, the industry consensus at a recent industry event was that an RES is critical to dragging the wind market out of the current demand slump. "If we could get some form of the RES through, that in itself may not stimulate things immediately," said Hunter Armistead, executive director of renewable energy firm Pattern Energy. "But at least it will define a direction so that people will maybe start to come off the sidelines."

Kevin Walsh, managing director of GE Energy Financial Services, agreed: "In the absence of that, with low gas prices and with power demand being off, I think we're going to get stymied."

Without RES

There is also concern within the industry over what the policy future holds if an RES does not get passed this year.

"Many Washington lobbyists say it's do or die this year for a renewable energy standard at the federal level. If it doesn't pass this year, they're not optimistic about the future for it," said Martin.

But Tristan Grimbert, chief executive of renewables firm Enxco, was far less pessimistic: "Do it now or die? I'm sure in six months it will be completely different. US politics has a very, very short cycle and it will come back."

For more see 'America faces up to PPA customer drought'

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