FEATURE
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Renewable Energy
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4 9 4 A • DECEMBER 1 , 1999 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS
© 19§9" A m e r i c a n Chemical Society
upporters of the Federal Energy Regulatory Commission's (FERC) 1996 order to deregulate the nation's electricity industry envisioned a robust, competitive marketplace where small, independent power companies hawked their products to homeowners and corporations alike. The idea was to move electricity into the modern-day capitalist economy: remove the rules straight-jacketing electricity producers and allow consumers to choose the energy service they preferred. And most renewable energy enthusiasts believed that deregulation would boost renewable-energy technologies, as consumers chose to support the cleaner, less polluting energy sources. In the slowly developing competitive energy market, the future of renewable energy technologies is not as clear as it was under the old regime. Congress is considering nixing the national law that requires utilities to purchase a certain percentage of renewable electricity. The success of renewable technologies, such as wind, solar, and biomass, depends on a mix of factors linked to how the states "structure" their deregulated market and whether government benefit programs, including subsidies and tax incentives, remain in place. Renewable-energy technologies in the United States produced about 450 billion kilowatt-hours (kWh) of electricity in 1996, or about 12% of the national total, according to the U.S. Energy Information Administration (EIA) (i). As most people believe, large hydroelectric plants provided the most, or 10% of the total. Although the definition of renewable energy includes conventional hydroelectric plants, they are known to have adverse envir o n m e n t a l impacts, including water quality degradation and habitat destruction. When most people speak of "green energy," they are referring to nonfossil fuel-powered energy, such as wind, solar, biomass, geothermal, landfill gas, and small hydroelectric sources (see Figure 1). Although the producers of renewable energy, excluding large hydropower, range in size, large, investor-owned utilities produce only 9% of the nation's renewables (2). Washington state, with its abundant water resources, generates the most renewable energy (26% of the national total in 1996). However, California is far and away the state with the most renewable sources. In 1995, the Golden State had 4772 megawatts (MW) installed at nonutility-generating facilities (2). An average U.S. household, including the small proportion of electric heat customers, use about 10,000 kWh per year (i). A typical household, excluding electric heat users, consumes approximately 6000 kWh annually.
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Deregulation? Renewable energy use is on an upswing, but proponents worry that it will lose out in a strictly competitive energy market. CATHERINE M . COONEY
DECEMBER 1, 1999 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS • 4 9 5 A
FIGURE 1
Renewable power-generating capacity A total of 17,147 MW of installed electric powergenerating capacity was available from U.S. nonutilitygenerating facilities in 1996. Data indicated are in units of megawatts.
Source: Energy Information Administration, 1998.
FIGURE 2
Renewable electric power costs The average price paid by U.S. electric utilities in 1995 for renewable electric power purchased from nonutility facilities varied by source, averaging 8.78 cents/kWh.
a think tank in Washington, D.C. In a 1999 survey, RFF compared the actual performance of each technology against projections made by policy makers and found that the price of renewable technologies has steadily declined. Relative to projections made about their future costs, in almost every case, actual costs have equaled or been below projections. This is good especially when compared with conventional technologies, such as coal-fired and nuclear power plants, whose cost projections have been underestimated. "According to this measure, renewable technologies have met the goals set for them, and could emerge 3.s tin important contender in an ongoing struggle toward sound policy," the RFF researchers wrote (3) With the exception of niche markets, such as homes off grid, the fairly young renewable energy industry will not be competitive with fossil fuel-fired or nuclear power without some government support. The cost for renewable technology varies (see Figure 2). The nationwide average cost paid by electric utilities in 1995 for renewable power was 8.78
