"On reflection we felt the bill should be more aggressive," says Dan Adamson, DOE's Deputy Assistant Secretary for Power Technologies. "We've got information that shows there are more renewables out there at a lower cost than we thought." He cited the California bidding process, which has resulted in substantial projects despite what he termed "pretty modest" incentives. "Renewables are more practical than we previously thought," he adds.
The revised bill will be reintroduced after Congress returns from its spring break on April 12. The Clinton proposal greatly boosts the amount of new renewables that could be installed by 2015 -- 55,500 MW compared to 34,000 MW in the original bill, according to Alan Nogee of the Union of Concerned Scientists (UCS). Without an RPS, 25,000 MW of renewables is foreseen by 2015.
The Clinton bill is still not as aggressive as other RPS proposals from Congress, but is a step in the right direction, says to Jaime Steve of the American Wind Energy Association (AWEA). "We're very pleased. AWEA and the Sustainable Energy Coalition have long promoted a goal of ten percent by 2010. We think [Clinton] took a very strong step," says Steve.
The boost to the federal RPS proposal comes just after the New Jersey legislature adopted an RPS as part of its deregulation package. There, the renewables obligation will increase from 0.5% in 2001 to 4% by 2012, on top of 2.5% from hydro and waste incineration. And just last month, the Texas Senate adopted legislation containing a 3% RPS by 2009, legislation that requires the development of between 1500 and 2000 MW of new renewables within ten years..
Capping credit price
The Clinton bill also suggests setting a price cap of $0.015/kWh for renewable energy credit trading, to be overseen by the federal Department of Energy (DOE). If the market for green credits offers less than one-and-a-half cents for each kilowatt hour the credit represents, retailers would buy from each other; if it is higher, they would buy proxy credits from DOE at that price. DOE would then use any resulting profit for public benefits projects, which could include a wide range of programs not necessarily related to green power.
A UCS analysis of the program finds that if the RPS market mechanism works effectively it will push down the price of renewables sufficiently for Clinton's target to be met. The price cap, however, could put the RPS goal out of reach within the existing time frame. "We think our modelling of renewable energy credit prices is conservative," Nogee says. "If the RPS market mechanism works effectively, competition among renewables may reduce the price of renewable energy credits sufficiently for the target to be met."