Give renewable energy standard a closer look before passage

Lance Brown Contributor
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According to Democratic leaders in the Senate, the 60 votes needed to pass a climate bill may be a lot more difficult to come by than they originally thought. Last weekend, Sen. Jeff Bingaman (D-N.M.), chair of the Energy and Natural Resources Committee, said, “If you actually have a bill that puts in place a cap-and-trade system or a limit on greenhouse gases and a mandatory reduction in greenhouse gases, I think it’s difficult to see where we get the 60 votes to pass that legislation.”

Given the impact that cap-and-trade could have on energy prices and jobs, it’s easy to see why Congress is hesitant to enact it. However, the alternative to cap-and-trade—a federal renewable energy standard—could be even more detrimental to consumers and businesses.

The most recent energy bills proposed in the Senate do not contain a renewable energy standard, but it’s extremely likely that one could be added in. The American Clean Energy and Security Act (a.k.a. the Waxman-Markey Bill) that passed the House contained a 20 percent renewable energy standard by 2020. Recently, Sen. Byron Dorgan (D-N.D.), a member of the Energy and Natural Resources Committee, touted the need to produce more energy from wind, solar, and biofuel sources and pledged to offer an amendment for a 20 percent renewable energy standard if the bill with a 15 percent standard gets to the floor.

As I’ve written before, any renewable energy standard—especially a 15 or 20 percent standard—would be an unwise policy for the country as we are just beginning to recover from the recession.

It’s important for us to incorporate all sources of energy, including renewable sources, as we develop a viable energy plan for the country. However, a one-size-fits-all standard simply won’t work given the geographical variety of our states. Requiring each state abide by the same energy standard is no fairer than requiring each state to grow a certain federally mandated amount of oranges. Sure, California and Florida might do well under the regulation, but New England and the Pacific Northwest would face severe hardship in trying to meet it.

Even in the most optimal conditions, wind and solar energy are far more expensive than energy generated by coal or other fossil fuels. According to recent research by the Heritage Foundation, a 15 percent federal renewable energy standard by 2020 would raise electricity prices by 36 percent for households and 60 percent for industry.  The cheapest source of renewable energy—on-shore wind—costs nearly double the price of coal per megawatt hour, and off-shore wind and solar cost even more.

Further, these prices do not account for the cost of transmission nor do they factor in the reliability of these energy sources. In fact, even in states where renewable sources are viable sources of power, energy companies are finding more and more that issues with transmission and reliability hinder the ability to effectively use these sources. In Colorado, it was recently reported that Xcel Energy—one of the solar power leaders in the country—is reducing its solar acquisition targets by 48 percent. Karen Hyde, the company’s regulatory vice president, noted that they “cannot guarantee the ability to move power to the grid when these solar resources become available.”

With so many energy options on the table, Congress should not enact a federal renewable energy standard just for the sake of passing a climate bill. Instead, they should closely examine all energy options and consider cost, reliability, and cleanliness of all available sources.

Otherwise, they can count on a struggle to get those 60 votes.

Lance Brown is executive director of PACE.