WASHINGTON - The renewable energy
mandate in the climate change bill approved by the U.S. House
of Representatives last week does not go far enough for green
power proponents, but the proposed national standard is likely
as strong as it will get.
Aimed at combating global warming, the House bill requires
at least 15 percent of electricity generated by utilities to
come from sources such as wind and solar by 2020, up from 2007
levels of around 2.5 percent.
U.S. President Barack Obama and clean energy advocates have
called for a much higher national renewable electricity target
of 25 percent by 2025, but House Democrats softened the goal to
appease lawmakers from coal-dependent states.
Displeased with the concessions, two dozen renewable energy
companies and trade groups ratcheted up lobbying efforts two
weeks ago to spur Congress to boost the green energy target.
But experts say green power advocates probably will not be
able to squeeze any more out of lawmakers, who fear saddling
voters with higher energy bills in a recession.
"I think the less aggressive proposals show a concern by
legislators that rates could change and go up, and that this is
not a good way to get votes in recession," said Christine
Tezak, senior energy policy analyst at Robert W. Baird and Co.
A positive for renewable energy
Wind and solar producers still will benefit from the
mandate if it becomes law, said Kevin Book, an energy analyst
for ClearView Energy Partners.
"Despite appearances to the contrary, this is a positive
for renewable energy because, like the Renewable Fuel Standard
for biofuels, this is a real backstop," Book said.
Almost 30 states have already set targets for renewable
energy production, and many exceed the House bill's proposed
While this may seem to make a watered-down national goal
unnecessary, Book cautioned that many states already have
altered their mandates when they became inconvenient.
"Even if the federal standard did nothing but hold states
to their own targets, it would be considerably stronger than
the status quo," Book said.
Even with a national mandate, renewable energy companies
would face major hurdles, including competition from cheaper
forms of power and lack of a modernized transmission grid.
"Targets below 25 percent by 2025 reflect a shade of
realism regarding the scale of capital investment needed to hit
such an unrealistic target," said Ken Medlock of the Baker
Institute at Rice University in Houston, Texas.
Renewable boosters look to the senate
The House legislation tries to put a cost on greenhouse gas
emissions by requiring major polluters to acquire permits.
But more than 85 percent of permits will be given away to
industries. An Environmental Protection Agency analysis of the
bill concluded permit prices will not be high enough in the
short term to "drive a significant amount of additional low- or
While the national standard would be an important symbolic
move, it will not significantly increase pressure to boost use
of renewable energy, said Rob Gramlich, senior vice president
for public policy of the American Wind Energy Association.
The bill could weaken demand for wind power and other
renewable sources by expanding the definition of renewable
energy sources, and requiring that power providers reduce total
energy use by 5 percent through efficiency gains, he said.
The House bill will not "deploy significant new renewable
energy above what states are doing and (it won't) keep
development going at current levels well into the future,"
AWEA supported passing the House legislation, but Gramlich
said the group hopes to lobby the Senate to boost its target.
That will be no easy task. The Senate Energy and Natural
Resources Committee recently approved a comprehensive energy
bill that would set a 15 percent renewable power goal, but
states could meet up to a quarter of the mandate through energy
Several Senators have said they hope to strengthen the
standard before a full chamber vote, but it will be hard to
gain support of lawmakers from states without many renewable
resources, who worry their constituents will face higher
"Industry lobbyists are certainly trying to strengthen the
mandates, but they're up against fundamentals," Book said. "The
major obstacle the sector faces is the obligation to become
cost-competitive on its own merits."
Both chambers will have to agree on a final version of the
measure before it is signed into law.
(Reporting by Ayesha Rascoe; Editing by David Gregorio)
Copyright 2009 Reuters