Navigant Research Blog

Ohio’s Freeze on Renewable Mandates Encourages Clean Energy Foes

— June 20, 2014

In an ominous first for renewable energy policy, Ohio Governor John Kasich signed a bill that freezes Ohio’s Alternative Energy Portfolio Standard (AEPS) and energy efficiency measures for 2 years.  The AEPS has been in place since 2008 and called for all investor-owned utilities to source 25% of their electricity from alternative sources, including 12.5% from renewables, by 2025.  These policies, which are more generally called renewable portfolio standards (RPSs), have been enacted in 29 states and Washington, D.C. and play a key role in driving demand for renewable energy.

Any policy that detracts from the status quo-entrenched fossil fuel interests is an attractive target.  RPS laws have been under sustained attack over the past few years, with no fewer than 15 attempts to scrap them at the state level.  The popularity and dropping cost of renewables have helped fend off these attacks, but this result in Ohio reflects the first time that opponents of renewables have succeeded in rolling back an RPS.  Enactment of the 2-year freeze is likely to be followed by a readjustment of the requirement downward, or the scrapping of it altogether.

There were some localized issues that propelled the attack.  A new generation of wind turbines optimized for lower wind speeds has allowed the expansion of wind energy from its traditional home in the more sparsely populated heartland to the more densely populated eastern Midwest markets like Ohio.  This led to increasing NIMBY (not in my backyard) and BANANA (build absolutely nothing anywhere near anyone) opposition.

Domino Effect?

Entrenched fossil fuel interests worried about competition fanned these flames.  And to be sure, the accompanying energy efficiency measures appeared to be a legitimate problem for large industrial users who were not given credit for improvements in process efficiency.  The energy efficiency issues, in fact, may have provided the most momentum behind the RPS attack.

But beyond the state-specific critiques, opposition to renewables comes from fossil fuel interests and conservatives who oppose any government support for alternative energy.  The Energy & Policy Institute has illuminated an increasingly orchestrated nationwide effort that includes the American Legislative Exchange Council (ALEC), with financial backing from the Koch brothers.  ALEC was reportedly active in helping gain support among state lawmakers in Ohio for pushing back against the renewable energy mandates.

Emboldened by victory in Ohio, attacks on state RPSs are likely to increase.   It will be hard to slow the clean energy momentum, though.  Renewables deployments have grown so fast in the United States (and globally) that analysis by Navigant Consulting director Bruce Hamilton shows that around 15 states with RPS mandates, or RPS goals, have already achieved 100% compliance in recent years and another 8 are at 75% to 99%.

Government support remains essential for the future of renewable energy in the United States – but the thousands of wind turbines and solar panels installed in recent years provide a strong foundation of fuel-free energy resources, and today’s increasingly popular and cost-competitive renewables will drive continued deployment whether politicians demand it or not.

 

China’s Cleantech Gap With U.S. Grows

— January 18, 2012

Following the announcement of a major renewables-plus-energy storage project in Hebei Province, the Chinese government has released its “Second National Assessment Report on Climate Change,” which concludes that “global warming fed by greenhouse gases from industry, transport and shifting land-use poses a long-term threat to China’s prosperity, health and food output.”

Among the consequences of climate change in China, the world’s largest emitter of carbon dioxide, will be declines in grain production of 5 to 20 percent by 2050, “severe imbalances in China’s water resources,” with catastrophic flooding in some areas countered with severe drought in other regions, and increased public health problems from air pollution, particularly in the country’s coal-producing regions.

“China faces extremely grim ecological and environmental conditions under the impact of continued global warming and changes to China’s regional environment,” concludes the 710-page report.

The United States released a similar report, Global Climate Change Impacts in the United States, in 2009, with an update scheduled for 2013. That report’s findings are equally grim, but have mostly been muted by a political environment in which a sizable components of the Republican Party, including all of the candidates for president save the front-runner, Mitt Romney, continue to deny that global warming is even real. We live in interesting times, when the leaders of a nominally Communist government that restricts its citizens’ access to the Internet are more candid and realistic on the issue of global climate change than the leaders of one of the two major political parties in the United States.

China’s efforts to slow climate change also contrast starkly with the near-complete inaction of the U.S. government. China’s struggle to limit the disastrous effects of its burgeoning coal power industry was detailed in this Atlantic feature by James Fallows. “In the search for ‘progress on coal,’ like other forms of energy research and development, China is now the Google, the Intel, the General Motors and Ford of their heyday—the place where the doing occurs, and thus the learning by doing as well,” Fallows wrote.

“You can think of China as a huge laboratory for deploying technology,” a U.S. official posted in China told the Atlantic. China has also moved to the forefront in developing new nuclear power reactors, including liquid-fuel reactors that use thorium, rather than uranium, as their primary fuel, as I detailed in this report on Wired.com.

The “cleantech gap” between China and the United States recalls the so-called “missile gap” between the Soviet Union and America in the late 1950s and early 1960s, a scientific and technological divide that was crystallized by the Sputnik launch. The missile gap turned out to be an invention. The cleantech gap becomes more real by the month. The reasons are manifold, and they include the capability of a command economy, which China’s to a large degree still is, to move quickly on major projects like clean coal and advanced nuclear plants. Free markets are, according to theory, more nimble and responsive than centrally planned ones. But when it takes a decade just to get a permit for a new nuclear plant (much less build one) in the U.S., and a couple of years to go from conception to completion in China, economic theory doesn’t hold up.

China’s climate change dilemma, particularly around increasing use of coal, is stark, and it may not be solved without wrenching environmental and social changes that could tear at the fabric of society. But at least they’re trying to do something about it.

 

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