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Renewables option fully economic

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An aggressive federal Renewables Portfolio Standard (RPS) could result in wind capturing 10% of the United States power market by 2020, with annual sales of $18.6 billion, according to a new study by the Union of Concerned Scientists (UCS). The study, "A Powerful Opportunity: Making Renewable Electricity the Standard," says the US can raise the share of renewable power to ten times current levels over the next two decades and still see a 13% drop in electricity bills. A federal RPS would also stabilise utility carbon emissions at year 2000 levels.

"Congress has a powerful opportunity to clean up America's electricity by making renewable energy the standard," says Steve Clemmer, senior energy analyst at UCS and lead author of the report. "Our report shows that even the strongest proposals in Congress are very affordable and will make major strides in improving the environment."

The RPS, an explicit minimum standard for the proportion of renewables in a supply portfolio, has been included in utility restructuring bills proposed by the Clinton administration as well as by Senators Jim Jeffords and Dale Bumpers, and Representatives Dan Schaefer, Ed Markey and Dennis Kucinich. In addition, six states have adopted the measure in state level restructuring legislation (Windpower Monthly, April 1998). Although Schaefer and Bumpers have retired from Congress, the Jeffords and Kucinich bills are expected to be reintroduced in the next session. The Clinton administration is currently making small revisions to its bill.

The most aggressive federal proposal, from Jeffords, would increase non-hydro renewables to a 20% share of new generation by 2020, or 10% of the total national market for power. The UCS analysis shows that wind would likely capture a quarter of the market for new generation capacity, or about 137,000 MW of capacity by 2020 (table).


The UCS study, performed with the help of wind consultant Michael Brower, uses energy cost and demand projections from the Energy Information Administration (EIA) and technology cost projections from Electric Power Research Institute and the federal Department of Energy. Growth in wind capacity is intentionally constrained in the model by using a number of factors and by eliminating 60% of windy land area, as well as obvious urban and environmentally sensitive areas, to reflect siting constraints.

If growth proceeds under current conditions, the EIA expects wind to gain no more than 1.6% of new generation capacity between now and 2020, with gas and coal capturing 95% (table). Under the Clinton Administration's RPS bill, wind garners 3%. In the Markey proposal, wind and biomass leap to over 9% of new capacity each, while coal falls to 6%. Wind booms under the Jeffords 20% proposal, however, capturing its new capacity mostly at the expense of gas and coal. Here, new investment in coal disappears, while gas still captures 54% of new capacity.

The EIA expects power prices to fall 18% by 2020 under current conditions. According to UCS, the increased development of renewables under the Jeffords bill would reduce the savings to about 13%, while having the offsetting effect of reducing natural gas prices by slowing the growth in demand for gas. And there would be a negative cost. Overall, an RPS would save a typical household $0.13 on its combined gas and electric bill in 2020 compared with not having an RPS.

UCS also analysed the effects of three RPS proposals in the 13 North American Electric Reliability Council regions. Under the Clinton RPS, regional variations are quite pronounced, with California and the Northwest dominating national markets for renewables. Geothermal production is especially prominent on the west coast, while biomass dominates the east. Under Markey's proposal, calling for a 10% share of renewables by 2010, much of the additional capacity is captured by wind in the Midwest. Seven regions exceed 10% renewable power production.

best case

Under the Jeffords RPS bill, renewable development is more widespread, with five regions getting more than 20% of their power from renewables, and ten regions getting more than 10%. Wind power does especially well in two large regions. In the Southwest Power Pool (Kansas, Oklahoma, Arkansas, western Missouri and Louisiana), wind power capacity would reach 40,000 MW, providing 37% of the region's power. In the Mid-Continent Area Power Pool (Iowa, Minnesota, Nebraska and the Dakotas), wind capacity would grow to 22,000 MW, contributing to 40% of that market. Jeffords's RPS also creates significant markets for wind in California, ERCOT (Texas), ECAR (West Virginia, Ohio, Indiana, Michigan, and Kentucky), and MAAC (Pennsylvania, New Jersey and Maryland).

UCS has also released a companion policy report, "Powerful Solutions," and a set of federal energy principles drafted by the High Plains Sustainable Energy and Economic Development Coalition, which is comprised of 32 grassroots environmental groups across the upper Midwest. Among other initiatives, the principles support a 20% federal RPS by 2020, fair access to transmission lines for wind plants and other intermittent renewables, and a public benefits fund to support renewables research.

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